Despite some challenges, China sees huge demand for cranes
By Euan Youdale14 February 2012
China remains under-constructed and continues to experience the largest scale of urbanisation in human history. A consequence is huge demand for cranes for a vast range of applications but the business is not without its challenges. Alex Dahm reports
The first quarter of 2011 saw a dramatic rise in crane sales in China and then there was a decline in the second quarter when macro economic control by the government took hold in a bid to prevent the economy from overheating. The credit squeeze slowed things down enough for even some large construction projects to stop. A bounce back came in the fourth quarter and the forecast is more positive for 2012.
The government's 12th Five Year Plan calls for 4.8% annual growth in energy supply which means that power plant construction - nuclear, thermal and wind - is a major proportion of the crane work in China.
Other work is in shipyards and in civil engineering infrastructure, including high speed railway, roads, bridges, airports, harbours and general urbanisation. This civils work requires mobile cranes mostly in the 8 to 300 tonne capacity range. Urbanisation in China is now focused in the northwest corner of the country.
In the petrochemical and medium to heavy industry sector, the demand is for medium and large capacity cranes from 50 to 650 tonnes. The demand for the largest cranes, from 50 to more than 3,000 tonnes capacity is for the construction of the above mentioned power plants.
China is the world's largest market for mobile cranes and is the fastest growing. Truck cranes are and will remain the most important crane type in China. Sales grew at a rate of 20% per year from 2005 to 2010, before a brief "lull" or, even a small drop, last year. Truck crane sales in China in 2011 were close to 35,000 units, about the same as in 2010. The forecast is to get back to an increase - to 38,000 units - for 2012. Li Yuning, vice president at Liugong, which makes truck cranes to 70 tonnes and crawler cranes to 160 tonnes, among a large amount of other equipment, forecasts 3% annual growth in truck crane demand to 40,800 units in 2015.
In value terms, 2010 sales of new mobile cranes in China exceeded RMB 30 billion (or USD 4.75 billion), says Li. That figure for cranes is 10% of the whole Chinese construction equipment market, Li says.
Revenue from manufacturer Sany's mobile crane division, which includes telescopic truck, all terrain and rough terrains plus crawler cranes, is rapidly rising. In 2009 it was RMB 1.5 billion (US$ 238 million), in 2010 it was 3.5 billion ($554 million) and in 2011 the target was RMB 5.0 billion ($792 million). Looking ahead the 2015 target is an impressive RMB 10.0 billion ($1.6 billion).
The truck crane market is experiencing a trend towards higher capacity and there has been a strong shift in the last five years. Machines below 20 tonnes capacity used to account for 58% of all truck crane sales but that has fallen to 28%. Taking up the slack is the 20 to 25 tonne capacity sector, which has grown from 33% to 64%. Above 30 tonnes capacity it has remained stable. Sany, for example, doesn't produce 8 and 10 tonne capacity truck cranes and is focusing higher up the capacity scale.
Several manufacturers continue to enter and expand in the sector. Chinese manufacturer XJCM has launched a 25 tonne capacity truck crane aimed at the domestic market. The QY25J5 has a 40 metre boom and 7.3 m jib. It uses a four axle European style truck carrier. Curb weight is 31,780 kg. In development are 8 and 12 tonne capacity truck cranes. These will be launched around April or May 2012, according to export manager Jack Zhu.
Customers tend to choose an all terrain crane when the lifting requirement is above 70 tonnes capacity, Liugong says. Increasing lifting capacity is also a trend among Chinese manufacturers in the all terrain sector. When Sany introduced its 1,200 tonne capacity telescopic wheeled mobile it only had a 200 tonner as its largest model. In three years the technicians had finished it and it has now lifted 850 tonnes at 4 m radius, the company said. One unit has been sold and delivered for work in Inner Mongolia on wind turbines. Such flagship models promote the company's capabilities.
A new all terrain for the European market is the Sany SSC 2200F. Shown at the BICES exhibition in Beijing in 2011, it is different from the Chinese market version in that its weight was reduced by 8 tonnes, to a total of 58 tonnes, for sale in Europe where the axle load limit is 12 tonnes. It is due for launch and display at the Intermat construction equipment exhibition in Paris in April. Also new at BICES from Sany was a 350 tonne capacity all terrain.
In development at Sany are 100 tonne and 180 tonne capacity all terrains. The 100 tonner is a European market model being designed at the company's facility in Germany and should be ready by the end of 2012. A prototype of the 180 tonner on five axle carrier and with six section boom has been built.
Next in all terrain crane development at Sany is a 500 tonner, which is at prototype stage, followed by a 600 tonner later in 2012. The company hinted that an 800 tonner may be next in line after that.
Zoomlion, which says there are 90 all terrains above 400 tonnes capacity in China, reports that it has started batch production of its 500 tonne capacity all terrain type wheeled telescopic mobile crane. Wind turbine erection is the primary application for this unit, Zoomlion says. Larger-tonnage all terrain cranes are under development in R&D at the moment, it says.
In 2011 there were 1,300 crawler cranes sold in China, the vast majority in the 50 to 80 tonne capacity range. The population of crawler cranes over 400 tonnes capacity in China is 400 units. While demand remains strong for small units, the demand for larger ones is increasingly being met by domestic manufacturers. Leading domestic crawler manufacturers are Sany, Fuwa, XCMG and Zoomlion.
Among the larger manufacturers the competition for building the largest crane seems to be fiercest in the crawler sector. The largest model XCMG has sold so far is a 2,000 tonner. Zoomlion says that its 3,200 tonne capacity ZCC3200NP crawler crane has passed testing and is ready for delivery. Sany has shown the biggest crawler crane so far, the 3,600 tonne capacity SCC86000TM, primarily aimed at power plant construction.
In addition to the ubiquitous truck crane, big crawler and all terrain cranes, Chinese manufacturers in the last three years have turned their attention to developing the rough terrain crane. This type is traditionally a stalwart of the US market and of oilfield applications worldwide. US and Japanese manufacturers are market leaders.
XCMG started with RT cranes in 2011 and reports sales of 10 units in China, all in the north of the country. Exports might start in 2012 and a target market will be the Middle East but not the USA, the company says. On offer are 60 and 100 tonne capacity models. The technology is German rather than American or Japanese, according to the company.
At Zoomlion, August 2010 saw the Chinese manufacturer partner with Global Crane Sales in the USA to develop a range of RTs for international distribution. The cranes are engineered by Global and built by Zoomlion in China. The four model range - 35 tonne (40 US ton) capacity RT35, the RT55, RT75 and RT100 - has been available in the USA since November and international distribution begins this month. Cost is 40% less than standard rough terrain cranes already on the market, Global says.
Sany's RT project is owned by Sany America. Its goal is to build machines with competitive price and high capability, not high tonnage, according to the company. Offered are 35, 55 and 75 tonne models. Research it conducted into large rough terrains did not achieved goal so a 100 tonne capacity model is not planned, the company says. Around 50 units have been sold worldwide in the three years that they have been doing them. Most popular are the 35 and 55 tonners. The 55 is available in two versions - with a four or five section boom.
Rough terrain cranes were one of several highlights at the 2011 BICES construction equipment exhibition in Beijing, China mid-October. On show were the 55 tonne capacity Sunward SWRT 550; the 100 and 60 tonne capacity XCMG RT 100 and RT 60; 30 and 55 tonners from XJCM; and the 100 tonne capacity Zoomlion RT 100. It is the largest number of RTs seen at a Chinese show.
The new Sunward SWRT550 rough terrain is part of the Chinese manufacturer's first foray into crane manufacturing. Capacity is 55 tonnes and maximum lifting height, with jib, is 61.7 metres. The maximum load moment rating, on the 41.5 m main boom only, is 1,850 tonne-metres. Jibs are available from 10.5 to 18.5 m.
On pick and carry duty the capacity on the Sunward's chart is 18.1 tonnes and, at 10 m radius on 36.7 m of boom, the manufacturer's capacity chart shows 2.1 tonnes. With fully extended outriggers and main boom (extended to 42.5 m), at 32 m radius, the chart shows a capacity of 790 kg. In the same condition at 10 m working radius capacity is shown as 10 tonnes with 36.7 m of boom.
The Sunward's 41.6 tonne curb weight is distributed 21.6 tonnes on the rigid front axle and 20 tonnes on the hydraulically suspended rear. Power is from a 216 kW Chinese WeiChai WP 290 diesel engine and it has an Allison transmission. It has an electronic control and monitoring system with colour graphic display made by 3B6 in Italy.
Also at the BICES show was Chinese manufacturer XJCM, which has been making RTs for three years. It builds around 100 units a year, according to Jack Zhu. Between 65 and 70% of them are exported, Zhu says. Primary destinations are Brazil, South Africa and the Middle East. Three models are offered, in 30, 55 and 70 tonnes capacity.
All manufacturers are focusing strongly on developing their export business. XCMG, for example, generated US$500 million in 2010 from exports of its crane, earthmoving and road building equipment and for 2011 the forecast is for that to have doubled to $1 billion. The crane division is 25% of the total, which puts a figure of $250 million on wheeled and crawler crane products. Key export markets are the Middle East, South East and mid-Asia, and Latin America.
Sany says that around 500 of its mobile cranes were exported in 2010. The major markets are Brazil, Saudi and UAE, followed by India. The first two of these countries accounted for RMB 0.6 billion ($95 million), with RMB 200 million of that from Brazil alone. A recent major export order for Sany was for 132 truck cranes (102 x 75 tonners and 30 x 100 tonners) to the Middle East, worth RMB 260 million (US$ 40 million).
For export business to be successful, after sales service, including care and maintenance, spare parts supply, and so on, is fundamental. Sany's strong focus on parts and service, it says, is the reason for the rapid development of the company. Good service is the biggest concern of customers but technology is also nearly as important, Sany says. It is a similar story at XCMG where the emphasis is on developing after sales service, maintenance and supply infrastructure, even more, perhaps, than on developing big cranes.
Li Yuning at Liugong says manufacturers in China have experienced a price war, a service war and a financing war. For future success in China, manufacturers must develop competitiveness in all three of these areas. As the market matures, manufacturers' competitiveness will depend more and more on product quality instead of quantity, Li says.
Manufacturers will complete their product ranges by developing more high capacity cranes and they will put more R&D effort into core component technology. More advanced manufacturing technology will help improve the performance and reliability of Chinese cranes, Li says. Another important improvement area is the ability to maintain the products.
Chinese manufacturers will reduce the gap between themselves and world's top producers.