The fourth International Rental Conference (IRC) in Shanghai attracted a record audience of around 400 delegates.
The# audience of rental managers and owners, manufacturers and dealers were given a mix of expert rental management advice from senior rental figures in Australia and Europe as well as testimony from Chinese rental players.
China’s rental market is expanding, particularly in aerial platforms, as safety and productivity increase in importance and as business practices change among equipment owners.
Fei Xiaodong, vice general manager at XCMG Guanglian rental company – owned by Chinese manufacturer XCMG – told delegates that China’s state owned contractors represented 65% of the total construction market and that they were moving to an ‘asset—light’ operating model, relying more on rental and less on equipment ownership. He said there was “a huge reservoir of demand, and likely to remain so for a long time.”
Desmond Soh, vice president and general manager - Asia, at JLG Industries, highlighted the potential for the access industry by reporting that there are 16000 construction workers for every aerial platform in China, compared to a ratio of 12 to one in the US.
He said China’s greater focus on safety and the country’s shrinking workforce, amounted to "a seismic shift in labour trends".
Matt Fearon, president of Genie, confirmed the potential and provided an overview of lessons learned from more developed markets. He said manufacturers must avoid financing equipment to companies that cannot pay. "It will destroy rental rates and it takes a long time for the industry to get back from that".
He also used the recent example of Brazil to warn about the dangers of over-investment.
There continues to be growing pains in the industry, however. Mr Fei at XCMG Guanglian said state owned contractors continued to “put the pressure of cash flow on service providers,” and he spoke of the continuing poor payment record of contractors in the country.
Mrs Zhang Yan Na, President of the Machinery Management and Rental Branch of the China Construction Industry Association (CCIA), said, welcoming delegates at the start of the day, said; “The AWP rental sector is emerging in China and the market is yet to saturate and therefore enjoys a promising future.
“In the meantime, with more and more businesses jumping into the market and due to the varied strengths of the players, the market order is facing new challenges.” These include oversupply of machines and late payments.
Around 70% of the audience was Chinese, with the balance from the rest of Asia as well as representatives from European, US and Australian rental companies.
Rental management advice was provided by Bill Whitehouse, COO of Kennards Hire in Australia, Norty Turner, CEO of Riwal, Xavier du Boys, CEO of Kiloutou, and Gary McArdle of Rouse Services.
Next year’s IRC conference will take place in Shanghai on 31 October 2017, and will be located within APEX Asia, the new aerial platform exhibition that will be held alongside CeMAT Asia on 31 October to 3 November.