Wheco carries out a service life extension project on a 10-year-old Link-Belt LHSP-8040 rough terrai

Wheco carries out a service life extension project on a 10-year-old Link-Belt LHSP-8040 rough terrain crane. The work includes repowering with a Tier III engine

Companies in the repair and refurbishment field continue to think ahead with expansions and investments. IC spoke to two of them, based in Europe and the USA.

Bert Avezaat, director of Netherlands-based Avezaat, says new building projects are significantly down on two to three years ago but repair work has increased a little. "Since we work a lot for foreign countries we normally do not just depend on Holland, but now the whole world is suffering so, of course, we also feel this," Avezaat explains.

"What we see in mobile crane and aerial working platform rental is that customers are not renewing the machines as fast as they used to because the value of their used machines is so much less. For this reason, most of them work with their machines for longer, which is good for companies like us."

Jay Shiffler, vice president business development at USA-based Wheco, which focuses on accident repair, shares that sentiment. For example, Wheco is also carrying out a service life extension project (SLEP) on eight rough terrain cranes for one customer. The company decided it made more sense to update the existing fleet rather than attempt to sell them back into the market and replace them.

High price

The increasing price of new cranes is also a factor. "Crawler cranes have always had a long service life - you refurbish them and put them back into action. But now people need more service life out of hydraulic cranes. A company cannot spend US$2.5 million on an all terrain and then dispose of it after seven or eight years," says Shiffler. "Right now there is not an after market for that and you need to generate revenues. We have done a lot of work on ATs in the last couple of years."

Wheco specialises in the repair of large capacity cranes. "For us $500,000 to $700,000 dollar turnkey projects are a lot fewer and further between now. But we are doing service life projects and some Tier III projects, including some re-power projects."

While the future is uncertain, Avezaat believes that a resurgence in oil-related projects, along with others requiring heavy equipment, will provide opportunities for the company. "We want to develop more activities related to the repair and building of new heavy equipment, besides the mobile crane market. We have already started to work on these markets and have several ideas in this area."

Shiffler is also uncertain about the year ahead but sees business opportunities on the horizon. "As the economy changes and picks up, although I'm not sure that's going to happen in the next year, people will be required get their cranes ready and put back into service. That will happen before the new crane sales pick up.

Changing marketplace

As the economic landscape changes, so does the customer base, says Avezaat, with large companies buying out smaller competitors. "I think this will continue because it is difficult for smaller companies to keep their costs at a reasonable level, and rental rates have been under pressure for a long time."

Avezaat has also noticed a change on a regional level. "We are getting more work from the few growing markets like India, China, parts of the Middle East and Africa. In the last 10 years we have seen that the percentage of turnover from our international customers has grown from approximate 5% up to 60%."

The relationship with manufacturers has also changed over recent years. "There has always been competition from the manufacturers. For the last five to 10 years our relationship with the manufacturers has improved and we even sometimes use each others' services," Avezaat continues. "The world is getting smaller due to improved communication channels and the customers know how to find us and we know how to find them. In the end we all try to do the same: find the best solution for our customer and help them the best way we can. The customer does not want to get the feeling that they are put under pressure by us or a manufacturer."

According to Shiffler, third party repair companies offer services manufacturers sometimes cannot provide. "We are carrying out a project for a company in Chile. They had a structural problem which would normally take the crane off the job, we were able to go in there and do a structural repair, which, in theory, can last the life of the crane," explains Shiffler.

"They will probably bring it back here once the job is done and we will do a more thorough repair. But we were able to keep them running and get them through the project without having to ship a crane all the way to Santiago and ship the other one back. These are the types of value that a third party service and repair company can provide.

Investment

Repair and refurbishment companies are investing in new facilities to keep up with the increasingly complex machines produced by manufacturers.

Over the last five to 10 years Avezaat has invested in a temperature- and wind-controlled workshop to aid the welding procedure. It has also introduced plasma pipe cutting machines, faster welding equipment and materials and jigs.

Stocks of high tensile strength steel pipe and plate have also been increased. The company keeps 2,000 - 2,500 tonnes of plate and pipe materials from S 355 up to S 1100 at any one time.

"When new parts or materials come on the market we do our own testing and studies to be sure about what has changed and how we need to adjust our procedures to this," says Avezaat.

The company also invested in its steel cutting company Avezaat Staal and installed new Messer steel cutting machines. It also bought a 50% share in paint facility Unicum Schiedam.

"This way we control the complete chain from keeping our own material on stock, cutting, building, machining and painting of the boom sections and cranes," Avezaat explains

Expansion

Wheco has expanded too. In August 2009 it opened a new service centre in Houston, Texas to meet the demand from south central USA. The 38,600 square foot (3,600 square metre) site accommodates the company's full turnkey repair and restoration capabilities.

This is the fifth Wheco service centre in North America. The company plans to add a rapid response field service section to the workshop that will focus on computer and electronic repairs.

Electronics are becoming increasingly complicated. "We are obviously getting more involved in the electronic side, including being able to repair and put together the LMI systems for cranes.

"They are certainly more challenging and require more technical expertise. On some of the older cranes we are asked to take the systems off and replace them with aftermarket systems like LSI," says Shiffler.

Future

In the future Avezaat hopes to develop further in the offshore area. "We do have some customers in this field but we do want to grow in this market and this is part of our plans."

"Avezaat will focus on steady growth as well as building new components for heavy equipment, beside the mobile crane market. We have been working on this for the last two to three years and we can see the results."

Shiffler adds that demand for third party repairs always has the potential to grow. "It could be a lot bigger if people knew about us and what we do and they were not jaded by misconceptions and myths.

"The misconception is that structural components cannot be repaired by independent third party companies and requires the approval of the manufacturers and it simply doesn't.

"We have been doing this for 30 years and each one is an OSHA and ANSI complaint repair."

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