Crane market hot spots

25 April 2008

iC asked crane manufacturers from around the world which markets are the 'hottest'. James Verrinder reports on where crane makers consider the best areas to do business are to be found.

Before speaking to crane manufacturers around the world about the most active markets, it would be fair to assume a list of countries, headed by China, would feature heavily in their reports. This proved to be true, but there were surprises in store with some of the areas that crane makers are enjoying success in.

UK & Ireland

The UK was mentioned by several of the manufacturers surveyed for this article as a 'hot spot' both now and in the future. Italian loader crane manufacturer Autogru PM's marketing director Alessio Nannini says that the UK was one of the busiest markets for his company during 2005 and, “We think that the English one will remain one of the busiest markets for us in the next two or three years.”

Sander Gesink at Hitachi Construction Machinery, who said that “the booming construction market” was fuelling crawler crane sales in the country, echoed this sentiment.

The UK was also singled out by Liebherr Werk-Ehingen (LWE) and Tadano Faun as one of the strongest markets for their all terrain and other wheeled mobile cranes. LWE's marketing director Wolfgang Beringer forecasts that the market in the UK will remain buoyant for the next two years at least.

Tower crane manufacturer and rental house Wilbert Kranservice in Germany, which recently sold its 25th in-house built crane, cited Ireland as one of its strongest markets, with two sales into the region. The strong construction market and preparation for the 2012 Olympics in London, coupled with the recent Arcomet/Potain dealership agreement should ensure that the UK tower crane market remains one of the most buoyant in Europe.

Elsewhere in Europe, Spain and Italy are often cited as strong markets but the most pleasant surprise was positive feedback about sales Germany. LWE's domestic sales were boosted by German companies renewing their fleets and Terex-Demag claimed a 10% rise in 40-49 tonne capacity city class cranes for 2005 compared to the previous year. Marketing manager Christian Schorr said that the company was expecting a similar increase during 2006. Five-axle cranes are also expected to sell well in Germany this year, according to Schorr, “The new AC 120, 140, 160 and 200 are state-of-the-art, high technology machines; they will achieve a strong market penetration in 2006.”

Tadano Faun also cites fleet renewal in Germany as the reason for good trading conditions there and expects the trend to continue in 2006.

The Spanish market has been very healthy for several years, so it was no surprise to see it mentioned in the feedback from people contacted. Wolfgang Pfister at Liebherr-Werk Nenzing said, “Spain has been an extraordinary vital market for crawler cranes (duty cycle and lift cranes) over the past few years. There has been a real boom in crawler crane sales due to huge investments into the infrastructure (also as a result of high EU subsidies). Consequently, there has been a huge demand for crawler cranes, especially duty cycle crawler cranes (HS-Series) for foundation works.”

Pfister cites the construction of projects like the Madrid M30 motorway, which involves complete refurbishment and re-routing of major sections through tunnels under the city areas as the reasons for the steady demand for crawlers.

Christian Schorr at Terex-Demag says that four-axle wheeled mobile cranes are selling well because of continued development in tourism-related and infrastructure construction. He says that the AC120-1 is proving popular, and 300 tonners, he claims, are also selling well in the country because of continued investment in wind farms for power generation. Looking at 2006, Terex-Demag says that this investment in renewable energy will continue and market share in the four-axle category will increase.

There was a hint that the good times will not last forever though, as Wolfgang Herzog pointed out, “We expect a natural saturation due to the fact that most crawler cranes are quite new and do not need to be replaced immediately.”

The construction market in Italy is another European hotspot in recent years with long term projects such as the Milan-Rome high speed rail link and the Tremonti tax break on the purchase of new machines. Announced last year was the Messina Bridge project, which will link Sicily and southern Italy, that is being touted as the largest construction project in Europe since the Channel Tunnel that links England and France.

However, excitement is muted over the Messina project, according to the UCoMESA (Association of Italian Equipment Manufacturers), which says the bridge is a project favoured heavily by president Sergio Berlusconi and may be scrapped if he loses upcoming elections.

Its domestic region is profitable for Autogru PM, according to Alessio Nannini, who attributes this to the extra investment that the company puts into its domestic market. He believes, however, that the “market is already saturated, and will become less interesting and less profitable.”

Tadano Faun also noted Italy as one of its busiest countries up until the end of Q3 2005.

Tadano Faun found other areas of Europe to be fruitful during 2005, and named Norway as one of its strongest selling regions. The company said, “The market in Norway is particularly influenced by projects in conjunction with the oil industry, predominantly in the bigger crane size. With the sales achieved through our distributor Knutsen Maskin, our ATF 160G-5 is strongly leading in this range.”

The Middle East

One of the regions we expected to see named was the Middle East, and it did not disappoint as several crane-makers pinpointed it as a top performing region over the last year.

Liebherr-Werk Nenzing's Wolfgang Pfister singled out Dubai and said that an economic boom and oil projects were driving demand for crawler cranes in the country. Notable sales in 2004 and 2005 were six 280 tonne capacity LR 1280 crawlers.

Terex-Demag points to the petrochemical industry in the Middle East contributing to good business conditions there. The company forecasts that good business conditions will continue, “especially for the very large machines such as the CC 8800 Twin mobile crane with a 3,200 tonne lifting capacity. The first CC 8800 Twin had been sold in December 2005 for delivery in 2007.”

The rising price of oil has led to a boom in oil and gas related projects across the Middle East according to Tadano. In Dubai, which relies on tourism and services rather than oil, luxury hotel and residential developments are keeping contractors busy and the demand for cranes high.

Demand for new cranes in the region has increased rapidly since 2000 when the market for new mobile cranes was 136 units. Last year it was 433 units, according to Tadano.

In addition, a large number of used cranes have been brought into the market. The trading state of Dubai and its Jebel Ali Free Zone, where Tadano's Middle East office is based, is a favoured landing point for shipments. Takuji Murakami, manager of Tadano's office in Dubai, says as many as 1,000 used cranes a year are shipped from Japan to the Middle East through Jebel Ali port. Murakami believes that sales of new cranes will continue at the current high level for a few more years at least.

Demand for used tower cranes is something that has not gone unnoticed at Wilbert. The German company says it has seen a rise in demand for cranes ranging in capacity from 120 tonne-metres to 280 tonne-metres and predicts that the region will continue to grow in the future.

Wolffkran marketing director Alexander Surhoff agrees that the Middle East, especially the UAE, is one of the busiest tower crane sectors in the world.

Auctioneer Ritchie Bros told IC that more and more customers from the Middle East are turning to buying cranes at auction because manufacturers and used dealers cannot keep up with the high levels of demand. Cedric Jandet, Ritchie Bros' marketing coordinator, has noticed an increase in internet buyers at Ritchie Bros auctions, many logging on from the Middle East and North Africa to buy cranes that they can put to work immediately.

There were other areas pinpointed by manufacturers as hot spots, the US, for example, was singled out by Autogru PM and Tadano as one of their strongest markets. PM opened a sales and servicing department there following a two year market penetration campaign. Allessio Nannini said that 2005 turnover in the US increased by around 80% compared to the previous year.

Terex and Jaso tower crane sales company Skycrane also pinpointed North America as one of its strongest markets, with sales of new machines to rental companies in Florida, California and British Columbia. Jim Howard, Skycrane president, says that recent hurricane damage and population increases across the US are keeping the demand for tower cranes high and expects the situation to continue over the next three years.

Only Tadano Faun mentioned France as a top selling country, which was surprising given recent crane sale figures in the country. After the mobile crane market collapsed in 2003, it grew by 15% in 2004 and 20% in 2005 according to organisers of the Intermat exhibition. Intermat estimates that 80% of new crane sales in France are two, three or four axle units. The show organisers predict another rise in mobile crane sales during 2006 as crane owners look to renew their fleets.

Some of the other hotspots that emerged were south east Asia (Terex-Demag) and Russia (Autogru PM) and of course China (Autogru PM). The Chinese market is the world's busiest for cranes and construction equipment, see the feature in our November 2005 issue for the complete picture.

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