Feature – AWPs: Pushing the boundaries

Powered access equipment is well established in a number of key markets, notably Europe and North America, but has some way to go in many parts of the world before it is considered standard on construction and industrial worksites.

There are a number of reasons for this, most of which are related to safety. Access equipment, in its capacity as a safer option compared to more rudimentary solutions in emerging markets - such as bamboo scaffolding - often grows in line with the development of safety standards.

Other key factors are also vital ahead of the adoption of powered access equipment, including a rise in the cost of labour and the development of a rental market.

Hence, an emerging nation for access equipment is often far more established when it comes to other construction equipment like excavators and cranes where there are no cheaper alternatives.

If there is one country that embodies these conditions, it’s China. The powered access industry has been waiting patiently for an explosion in the country and many still expect this to happen despite the recent slowdown in the construction market.

“If you compare and contrast from a couple of years ago access has really grown in China. You can feel the exponential growth starting,” said Alan Loux, vice president of global marketing at JLG.

“The construction business in China is down, we are not. We are underdeveloped.”

After all, China has the biggest aerial work platform manufacturing base outside Europe and North America, with as many as 80 domestic producers. However, a more general view is that exponential growth is unlikely, with the sector growing at a high percentage rate, albeit from a relatively low base.

Putting that in to context, the International Powered Access Federation’s (IPAF) latest rental reports show The Chinese AWP rental market grew at a rate of 25% to 30% in the past two years to reach approximately 9000 units.

That compares to the world’s biggest aerial work platform market the USA, which recorded an expansion of 7% in 2014 to exceed 500000 units.

Different markets

Some of the most positive voices can be heard from the two biggest access manufacturers, JLG and Genie, both of which have production plants in the country.

As Mr Loux pointed out, every market is different, potentially requiring unique products in those markets. “We should look at each market and see what it needs, some products will be similar and some very different.”

For example the manufacturer’s R6 and R10 RS (Rental Spec) scissors, with working heights of 19 ft and 32 ft respectively, now have the addition of active pothole protection for the Asian market.

Terex China president Ken Lousberg, speaking at last November’s International Rental Conference (IRC) Asia, said there are three factors influencing the region’s ability to deliver high levels of growth within construction. This includes the promotion of a workplace safety culture with regulations that are enforced to improve operating environments.

Secondly, construction job efficiency and productivity would be enhanced through companies adequately investing in equipment such as aerial work platforms over basic scaffolding, which would also have a positive effect on standards within the rental sector. The final element is ensuring availability of products.

Haulotte also sees the China market moving in the right direction. “We see in the last few years there have been a lot of newcomers,” says Alexandre Saubot, the company’s chief operating officer. This has led to 30% growth in the country for the Haulotte in the past year, a similar figure to the previous 12 months.

In addition, Haulotte Group’s subsidiary in Shanghai has become the first IPAF training centre established in China.

Tim Whiteman, IPAF chief executive officer, said it was a key step towards greater safety standards in China and would help with “the promotion of a workplace safety culture with regulations that will improve operating environments.”

Skyjack is more tentative in its approach to China and the region and has chosen not to open a factory there. Brad Boehler, the company’s president, cited the challenging rental model and ‘difficult payments’ as two reasons why progress in the country is slow.

“All this needs to come together for it to work. And when the government decides it wants something to happen, it does.”

If demand suddenly rises and machines are required then Skyjack will bring them in, explained Mr Boehler. The plan for now is to place equipment in the market and be seen as a viable alternative.

Will Skyjack introduce a plant there in the future? The fact is, said Mr Boehler, the higher the labour rate goes, the less attractive it becomes to manufacture in the country.

“There are lots of manufacturers relocating back to the USA or other parts of the world because of the labour rate. Perhaps we will manufacture in Australia or somewhere like that and bring the products in.”

Growing awareness

In India, there are just over 5000 units. Almost one third of them belong to end users for maintenance jobs while the other 70% belong to rental companies supplying the industrial, infrastructure and commercial residential construction sectors.

Growing awareness of the equipment’s effectiveness has resulted in increasing demand, Enthused by this emerging demand rental companies are starting to buy large amounts of used platforms - a sure sign of an emerging market.

T Mohanraj, business head, TV, Sundaram Iyengar & Sons, JLG and Palfinger dealer for the south and east Indian market, said: “Unlike India, the global AWP business is driven by rental agencies through new equipment. In contrast, in India rental companies have generally preferred to acquire used equipment.”

As a result, rental companies across Asia are growing in size and numbers. There is now a good number of rental companies - certainly in double figures - with fleets of more than 1000 units in the likes of Singapore, China, Hong Kong, Taiwan, Malaysia and South Korea. They will all tell you that local knowledge is key to success and encourage competition in their countries to stimulate awareness of the sector.

One of those, AJ Networks is based in Seoul, South Korea, one of the most established markets in the region. It has about 4000 aerial work platforms in its fleet.

The rise of access platforms in South Korea is not just down to an increasing recognition of safety and the expected rise in the cost of labour, there is also one key issue: “Our society is aging, so the labour power is growing old, therefore AWPs will be used more and more,” said Sam-Dal Son, AJ Network’s head of rental and executive director.

“Secondly, however, our government is thinking about safety and regulations will become stricter.”

He estimates there are around 35000 aerial work platforms in South Korea.

In Vietnam that drops to about 3000, although the market there is set to grow quickly.

Mr Son said that more than 90% of all the machines in South Korea are owned by rental companies.

“The reason behind this high percentage is that the rental industry is creating the market. It’s the rental companies who introduced AWPs into the market.”

European contrasts

Asia has great potential. An area with starker contrasts can be found in Europe where the difference between established markets to the western side is considerable compared to those in the centre and east, for example, Croatia, Czech Republic, Hungary, Poland, Slovakia and Slovenia.

Certainly, from the perspective of the AWP industry, Poland is by far the most mature compared to its eastern European counterparts and is moving closer to the countries on the western side of central Europe. Its rental sector is growing between 20% and 25% a year.

Rental giants Riwal and Prangl have signed a five-year framework agreement across Austria and eastern Europe. Part of it is a three-year rental deal for 79 JLG platforms and telehandlers. Prangl will rent the machines to customers in Hungary, Romania, Bulgaria, Slovakia and the Czech Republic.

Turning to manufacturers, Co.Me.T, for example, is active in Poland and Romania.

“We are trying to develop that market and looking for a dealer there,” said a spokesperson.

Vehicle mount manufacturer France Elévateur shared a similar story and has major plans for the region. It is making a concerted effort in Poland with its new distributorship partner Kobcrane.

“This part of central Europe is not easy because of the price level,” said Laurent Leclerc, special equipment department manager.

“So, the idea is to design machines for this market.”

This will culminate in a new range of van mounts on a3.5 tonne chassis aimed at central Europe.

Despite such valiant attempts in the region, the challenge remains significant.

Daniel Duclos, owner and chairman of French manufacturer ATN, said: “What we produce is more for a mature market.

“It will take a few years for these markets to change, but it will take less time to educate these markets than it took to educate the established markets as the products already exist and can be seen to work.”

Phil Graysmark, vice president of sales at Genie Industries, said there are two main issues in the eastern area.

Firstly, it is not used to the rental model and, more fundamentally, there is a lack of understanding about aerial work platforms and their use.

The second major issue is funding. Again, finance companies in these countries often do not have the knowledge and understanding of the equipment from a rental and asset perspective and therefore don’t want to fund them.

This is a feature from the June issue of IRN. To read the full article, including stories on Niftylift’s 30^th anniversary and an International Powered Access Federation report on the European and US AWP markets, please subscribe to the magazine at www.khl.com/subscriptions