Crane owners are becoming more interested in repair and refurbishment as the world market changes its emphasis to longer lifecycles.
The call for life extension and repair programmes is increasingly popular in the west, but developing countries are becoming more interested too.
Bert Avezaat, director at Avezaat Cranes in the Netherlands has seen a "remarkable difference" in business developments over the last two years, but the effects of the economic downturn were not felt until the beginning of 2010. "The amount and scope of work changed substantially in 2010. The new manufacturing projects decreased 35% compared to 2009, while the repairs and revisions increased 20% in the same period of time."
It is forecast that turnover on new manufacturing will increase from the second quarter of 2011. "During the extreme period of 2005 - 2008 we experienced situations where machines which were economically beyond repair, had to be repaired due to extreme high prices for used and new machines.
Since then, the situation has changed, with heavily damaged cranes now being written off due to a drop in prices and over capacity. "On the other hand for more or less regular repair and maintenance activities we see that most crane rental companies are using the extra time they have to make their machines ready for the years to come," says Avezaat. "We also see that maintenance and refurbishment is increasing due to dropped prices for used machines. For this reason many rental companies keep on working with the machines and wait longer to invest in new machines."
Jay Shiffler, vice president at Wheco Corporation in the USA, says business has not dropped off that much. "I would say some of the bigger, more sensational crane accidents have diminished a little but, overall, our repair activity mainly with smaller work is still good, plus we are doing more service life extension projects [SLEP]."
Shiffler says more crane owners are enquiring about this latter service. "The price of equipment over these four or five years has escalated dramatically. People cannot just use them for a lifecycle and get rid of them. For example, this year we did six 35 and 40 tonne Link-Belt rough terrain cranes."
Avezaat feels that the rental and sales market for cranes related to the projects in the building industry will still have a hard time during 2011, but that there will be an improvement from the end of 2011. "For harbour and industrial projects we can see positive developments already from the second quarter of 2010, and we expect this will continue."
"During the last few years we received fewer orders for repair and refurbishment from Spain, Ireland, Portugal and the UK, but, particularly over the last 12 months, there was an increase in demand from Germany, Poland, Denmark, Scandinavia, France and Italy," Avezaat continues.
Shiffler is looking at the upper mid-west and north east of the USA as a potential area for expansion. "That would be a sixth facility but we are keeping our options open. Sometimes it is about partnering with two or three major crane owners and if they are going to keep us busy we will go to that area to open shop. "We did quite a bit of work for some of the bigger contractors, service life projects. For instance, we had a large contractor for which we did some Manitowoc 4100s."
An increased provision of refurbishment options from major manufacturers has worked out positively for Avazaat. "In a lot of cases, when the manufacturers were claiming that cranes, or parts of cranes, where beyond repair, we could convince the customer that besides the big differences in prices and delivery times, our knowledge, repair facilities, experience and guarantee, repair was a smarter choice than replacement."
Shiffler says refurbishment will offer the operator with more options in the future. "When the economy does open up, people who have taken the time, effort and the financial consideration to extend the service life of their cranes, those cranes are going to be more valuable in the aftermarket than a machine that hasn't had the service life done to it."
Avezaat continues, "We have noticed a development in which some crane rental companies are heavily financed by major crane manufactures. When the economics go down it can be very difficult to stay in control of the equipment and over the company itself. We see that more and more crane rental and trading companies prefer an independent and specialised company like Avezaat Cranes for repair and refurbishment of their equipment."
Concerning the independent, third party approach, Shiffler concludes, "The manufacturers are trying to get involved in this business and get their distributors more involved. Because we are set up for this, every project we take on is unique and we feel we can do a better job of saving the parts and components that can be saved and replacing the ones that need to be and get the crane turned around and back producing cost effectively."
View from a manufacturer
Tobias Böhler, Liebherr used crane sales director, says all wheeled and crawler cranes can be worked on, no matter what age. Sometimes this work can guarantee a warranty.
"Refurbishing these cranes is not just a matter of making and providing the material, but also testing, reprogramming and synchronising the parts. Usually this work can only be performed by skilled Liebherr engineers, either at our factory here in Ehingen or in our workshops around the world."
The service has become more important, says Böhler. "The reason is that many customers from countries that buy more used cranes, have raised their expectations when buying a used machine from the manufacturer."
The ability to provide this level of service in house differentiates the manufacturer from dealers says Böhler. "Due to these capabilities, we can purchase accident damaged cranes and recondition them for sales afterwards. Some insurance companies use this service."
When it comes to retrofitting the latest components to older cranes, most customers are those with high capacity cranes due to the cost advantage at that level. "A good example is the Y-guyed suspension of the LTM 1500-8.1. The modern Y3 type can be retrofitted to older models and allows, therefore, an upgrade of the load capacities. Also older crawlers can benefit when new boom configurations were introduced after the initial delivery. For smaller cranes an upgrade in technology hardly compensates the expenses of the modification or is not possible."
Refurbishment can only become more popular in the future, adds Böhler. "As the import regulations and procedures in smaller countries outside the EU become stricter.
In addition, for some banks it is a determining issue that a crane is manufacturer repaired in order to grant finance. Also, for second hand cranes, as they can assume an even longer life cycle and therefore higher residual values.
*See linked articles for information about Manitowoc's dealership remanufacturing partnership programme