Turbulent times: Rise or fall of mastclimblers?
By Patrick Hill19 June 2008
Has the current financial market turmoil and construction decline shifted the outlook for rack and pinion access equipment around the world?
From the relatively developed markets of the US and Europe where mast climbing equipment was first used, to newer markets in the Middle East and Asia, the outlook for mast climbing equipment is not consistent, but seems to be universally positive.
In the US, Mike Pitt, who leads equipment sales and rental company Mastclimbers LLC near Atlanta, Georgia, said that although the use of mast climbers in residential applications has declined because of current economic troubles, the "long-term potential for mast climbers remains huge. If it were just 10% of current scaffolding use, it would be huge".
He said, "Masons are still the biggest users of mast climbers. They continue to work with the heavy-duty gas [petrol]-powered units and to develop new ideas, systems and add-on accessories that make the product more efficient, and equally productive when used on either low- or high-level buildings alike."
"At the moment the US is seeing the predominance of new-build projects, unlike Europe, where we see mast climbers being equally used on renovation work. With more of the lighter-weight machines being introduced from Europe, we can see this sector starting to gain momentum in the US.
"North American manufacturers are moving product into Europe, with the resultant cross-over in applications invigorating both markets. Unfortunately the exchange rate and the very weak dollar have meant that some of the European impetus has been lost, but this is viewed as only a temporary set back."
Mr Pitt said that Fraco, Hydro-Mobile, Klimer and Hydek continue to dominate the heavy-duty segment in North America. Their equipment "...lends itself to masonry work on ‘big-box retail', eg Walmart Stores, which are around 12 to 18 m (40 to 60 ft) high, brick-built structures with no windows or openings. The industry is contemplating some of the challenges inherent in this kind of construction (inability to tie to structure, access to working platform, etc), while it witnesses the huge growth in this market sector."
Tuning to prospects for medium- and light-duty equipment, he said, "With Fraco, Hydro-Mobile and Klimer all coming with light-weight machines to augment the already established units from Alimak Hek, Safi, AS, etc, the medium-duty, highly flexible, mainly electrically-powered refurb and city centre market is well served as it continues to grow at pace. This is potentially the largest area for growth in the sector and other European manufacturers are lining up to enter."
Fredrik Wiking, executive vice president and head of business area construction equipment said of the US market, "General construction business has gone down, but our niche is still growing. This is partly driven by the continuous positive growth in non-residential construction as well as the increasing usage of hoists on low rise buildings. Replacement of old fleets is in addition driving the demand. We also anticipate strong growth in the transport platform segment."
Mr Pitt thinks safety is key to more quickly realising long-term prospects in the US. "The pace of [mast climbing equipment] acceptance is being facilitated by the products' impressive safety performance, and the industry move towards greater quality training will only increase exponentially the general acceptance of the mast climbing product."
Alimak Hek told AI that it has experienced "substantial growth" in Eastern Europe, India, the Middle East, and China. Strong evidence of Alimak Hek's optimism for long-term prospects in those regions is the opening of offices there.
The company recently announced it will establish a Middle East sales support office in Dubai's Jebel Ali Free Zone to serve the Middle East and North Africa. The office's managing director, Mr Tarek Adel Al Gazar, said, "The 12 million square mile Al Zorah Development project and other projects are worth more than $2.4 trillion. The UAE alone currently has $35.6 billion invested..."
Also, the company announced in May that it will establish a new operation in India. There it will initially focus on the construction market and on the industrial market. Product offerings will generally be the company's entire range of rack-and-pinion products, as well as a complete array of after market services.
Also looking east for prospects is Martí Roca, who is responsible for the marketing department at Spanish manufacturer CAMAC. Mr Roca said, "In general I think in the following years will be medium growth because there is the possibility to open new markets.
"There are still new markets to open or to promote more intensive use of this equipment. For example, "...in the refurbishing sector the rack and pinion technology is rarely used.
"In Europe the eastern countries are the most interesting markets and where the industries expect the biggest growth. Southeast Asia and India are markets for passenger lifts, twin-caged equipment, equipment that is more than 100 m high, has high speed and low price, and for Chinese low-priced and Indian products.
However, Mr Roca notes that, "To sell to South America there is the problem of the Euro cost."
Looking even further East, Chinese hoist manufacturer GJJ told AI that it plans to make 2000 units in 2008; half of those will go overseas. It said its US market has fallen, but its prospects in the Middle East are rising.
The company has also invested in a new factory to expand its hoist production, and a new Xijguan factory will be ready to run this year. It will become the company's northern fabrication centre of hoists, as well as distribute them to the northern part of China, to Russia, and to other neighboring areas.
"There is a strong underlying market in China," says Fredrik Wiking of Alimak Hek. "Safety and productivity issues are becoming more and more important. One example is the regulations adopted by one Chinese province."
Fujian Province has passed legislation that from the 1 July all people and materials that must be raised above 20m on new buildings must be lifted on rack and pinion based (not traction) hoists. From 2010 this regulation will apply to all buildings not just new ones.
Fujian province is on the south west coast of China and closest of all the provinces to Taiwan, it is expected that once one area adopts tighter safer rulings other parts of the country will be quick to follow and the demand for rack and pinion based lifting platforms will grow even more rapidly.
Mr Pitt of Mastclimbers said that in the US probably 60 - 70% of all sales of mast climbers are to end users, in marked contrast to the UK. One consequence is increased requirement for training, and he notes the efforts of Canada's Hydro-Mobile, with their "...hugely successful Hydro University that they regularly put ‘on the road' and travel across America offering in-depth training on all models within their product range."
Alimak Hek too sees the importance of training, "The last years' transition from conventional technology into more electronics is requiring us as a supplier to be at the forefront of supplying services and training," says Mr Wiking. "We are constantly developing our Alimak Hek Service Academies, which we, at present, have established in Sweden, Holland, England and USA, and soon also in Singapore, Australia and China, with India and the Middle East to follow thereafter."
Another characteristic of the North American market, says Mr Pitt, is that, "other than manufacturers, most distributors are small independent companies, often with limited resources. We don't have an [industry-leader, such as] SGB yet, but we are working on it. Also, he says, "Most dedicated mast climbing rental companies only cover a limited number of states."
Distribution in the future is on GJJ's mind, too. The company recently set up a subsidiary rental company in Guangzhou, which it says is profitable and has been successful during its first year of operations. Although the rental venture is operating only domestically now, "we will have overseas rental joint venture in the future," says Mr Wang, president.
Alimak Hek has clearly pinned its prospects on its new lines of modular equipment, and the heavy-duty line, to be released later this year, extends the concept of standardisation and interchangeability yet further. Ernst von Hek, president of Hek Manufacturing, told AI that "...heavy-duty hoists offer the greatest potential for growth" and that there will be applications for them no one yet anticipates.
Looking, too, for product line growth, GJJ said, "We are also expanding our market for platform and transport platforms. We are adopting the same sized mast section for hoists and platforms, so GJJ hoists and platforms can be used on the same mast tower."
Current development of GJJ's hoist products includes: electronically linking on-site equipment to remote locations for real-time status, control, and diagnostic purposes and the generation of electrical power during hoist descent.
Mr Pitt of Mastclimbers said, "Transport platforms are carving out a new market in the US and Europe", although there are "differences in the operational characteristics which clearly set it apart from...hoists. The transport platform is essentially bridging an important safety gap between passenger and goods hoists and more traditional methods of access and lifting mechanism combinations."
CAMAC's Mr Roca said, "Probably, in the near future the material hoist will disappear, replaced by transport platforms."
Standardisation, safety and emerging and expanding markets are all driving the adoption of mast climbing platforms. Fredrik Wiking of Alimak Hek says "Safety is a growing concern in many countries...the rental market is growing everywhere both in established markets, where rental dominates and in emerging markets such as China." Globally the market looks healthy with plenty of scope for expansion, how quickly this happens will depend on whether traditional markets continue to thrive and the speed at which new markets develop.