Brighter shores

In the run up to 2007, the Spanish economy was booming, driven by construction of housing. The Economist stated that at the time, construction in Spain was accounting for twice as large a share of the country's GDP than in other large European countries.

So when house prices started to plummet, the economy was hit hard. In 2008, figures estimated the number of newly-finished but unsold homes at anything from half a million to more than 900,000.

July of 2008 saw a five-year record of 70,691 homes completed in a month, exacerbating the problem.

Construction groups had been hit - Habitat and Martinsa - Fadesa filed for administration, while Metrovacesa and Colonial were partly in the hands of creditors - along with the national economy, with unemployment up 40% year-on- year to almost 3m people.

Spain's crane manufacturers were directly affected by the recession after the boom. Dick Huitema, export area manager at Jaso, says: "The Spanish economy stopped because the boom was based on the agricultural, housing and services sectors - there was no strong industrial sector except in Madrid, Catalunya and the Basque Country.

"In the east and south of Spain, too many residential projects took place, building second houses that did not get bought. In the north, people couldn't get mortgages to buy properties. In the last eight years, the middle class in Spain has almost disappeared.

"In 2007 we had around 1,100 cranes in Spain -- this is now around 400. The Spanish market accounted for 50% of the global market for cranes, excluding China, with around 1,000 cranes joining the market each year."

Juan Ballester, in the sales department at Saez, says: "Between 2008 and 2010 was a tough time for everyone -- in 2008 most market collapsed and we relied on our rental business until 2010. The most rental business came from Spain, where contractors were fulfilling contracts signed before the economic crash. Our rental business covered not just tower cranes but also climbing platforms, hoists and construction equipment. Even with this keeping the business going, we still had to let go around 800 employees."

Away from home
At Linden Comansa, the export market proved key at the time, and continues to be integral to the company's business.

"We have a division in China, Comansa Construction Machinery, where we produce flat-top cranes," says Ralf Hagestedt, area manager at the company. "These cranes were designed by Linden Comansa in Spain and transferred to the Comansa CM factory.

"The Chinese factory provided a very useful push during the economic downturn. There was a sharp drop in sales in Spain -- we used to sell lots of cranes into the country. Now both companies, Linden Comansa in Spain and Comansa CM in China, are doing well.

"We are currently fully loaded with work - it's been a good year.

Our turnover is more than 60% of our most successful years, 2007 and 2008, and growing.

"The USA in picking up, as in London. There has been a good response in central Europe - we are represented in Scandinavia, Germany and Switzerland. Russia had dropped off but is now ordering larger cranes. When we opened the China facility, the largest market in Asia was Singapore, but that has now dropped away -- now there is no one leading market, but lots of countries buying some cranes.

Demand for larger cranes is growing in Hong Kong, Singapore, China and India."

For Saez, the need to focus on non-domestic markets provided inspiration for the company to expand its range of cranes and step up to the next level as a manufacturer.

"In 2007 we had an export business, but the issue for us was that we didn't sell to all the markets worldwide, and didn't have a full range of cranes such as luffing jib models, or cranes of more than 8t capacity," says Ballester.

"From 2010, sales of cranes started to pick up, mostly secondhand units from our rental fleet.

There are now very few secondhand cranes left, with particularly the large and medium-sized units having sold. Many markets have started to buy new cranes.

"After 2010, with the business being driven by selling second-hand cranes, our main focus turned to selling new cranes. We needed to prepare ourselves to compete with the big manufacturers, and in 2010 we launched the 16t flat-top model TLS 75. Until now, we weren't playing Champions League - because we didn't have a full range of cranes.

"We will have completed our full range of cranes in the next few months, to introduce at Bauma.

As well as the flat-top models launched this year, the TLS 65B 10t and the TLS 70 12t, we have added the luffing jib cranes SL 240 and SL 320, and before Bauma we will also add the SL 510 to our range. This big luffing jib crane will have a 110 kW hoist package to meet the hoist speeds required in the US market. And soon, we will also launch the Saez SL 710, as well as two self-erecting cranes of 40m and 42m jibs respectively, and a small hydraulic luffing jib crane, the Saez SLH 80.

"We are already selling cranes into markets where we didn't before. We have sold a few cranes into mining projects and refineries, but 99% of our business is in construction.

"Central and South America are very strong for us - we have branches and rental fleets in Uruguay, Paraguay, Chile, Brazil and Peru, dealers in Mexico and Ecuador, and also sell into Bolivia and Columbia. In Africa, we have branches in Morocco and Algeria.

"We are currently in the process of hiring a salesperson for Germany, northern Europe and Scandinavia. The German market is difficult to break into but we believe to be a global player, we have to be present there. It's just a matter of time before we start selling more cranes into Germany - we are continuing to grow steadily and word will spread of the benefits of our cranes.

"We will also appoint a salesperson for Asia, and plan to concentrate on South East Asia - particularly for our small and medium-size luffers."

Jaso has also expanded its portfolio and is doing a lot of work in overseas markets, says Huitema: "Before the recession took place, we had already diverted some of our business to the export market. Now, we have recently supplied cranes to projects across the world, including one in Sydney, Australia; a project at the Panama Channel which required 30 of our cranes; work at Reforma, Mexico City; and a major project in Turkey.

"Currently there are several overseas markets that are strong for us, and Jaso is present in over 60 countries including Turkey, Australia, the UK, Russia, Poland, Mexico, Israel - and we recently moved into the US market. We have a full order book to the end of the year.

"There are good years to come - certainly they can't be worse than the past eight years. We are at the point of reaching the next level with Jaso in terms of sales and the crane types we manufacture. The market is demanding bigger cranes and we are addressing this.

"Last year we launched our hydraulic luffing cranes, and have sold 15 already, into markets including the UK, Mexico and Australia. They are a new concept, developed initially for the UK market, and provide economic operation due to weight optimisation."

Seeds of recovery
The Spanish domestic market for crane manufacturers is still small, but there are some signs of growth, primarily in construction and infrastructure projects.

"The construction business in Spain is traditional and still focused on smaller cranes," says Huitema at Jaso. "There are a few pre-fabricated projects taking place but not many. There is still little construction taking place in Spain, with just a few projects from the government using larger cranes. A few bridge and road projects that stalled during the recession are now starting up again, but growth is still slow, especially in the north of the country. In 2008-9 the recession was delayed in reaching the north, so growth here is now slower than the rest of the country.

"Spanish people are not buying houses partly because of unemployment, and partly because there are not as many people to buy the houses -- after the baby boom, there were fewer people born in the 1980s. In the next ten years there may be a need for labourers from abroad to work in Spain.

"Housing developments are now starting to grow, very slowly, in big cities - in the south it is completely dead and will be for at least ten years. Land is now being sold for a much lower proportion of the overall cost of building a residential development."

Hagestedt at Linden Comansa says: "Spain is improving overall. House prices had dropped by 30-50% but are now increasing again -- however there is still some empty housing mainly in the coast, for holidays. The overall economy is growing. Unemployment is still high but decreasing, there were record tourism numbers last year, partly due to the problems in the Middle East and north Africa and Spain offering a safer alternative.

However, there is a general election in late 2015 which may change the economic situation.

"There is investment in infrastructure, including high-speed train services. In the residential sector, luxury properties are being sold mainly to foreign tourists, but the cheap villas are not selling.

"In Spain we previously sold lots of small cranes, whereas at the moment there is more demand for bigger cranes. The biggest we currently manufacture is the 64t capacity 30LC1450, but we have designed non-standard versions for special applications with maximum loads of 90 and 125 tonnes."

Saez has been involved in a few projects, but the market remains small for now, says Ballester:

"The Spanish market is almost non-existent -- around 99% of our business is to export markets. However we have started to sell cranes into Spain, and the market will definitely grow over the next few years, although there will not be much business until 2019 or 2020.

"One recent job in Spain was in downtown Madrid, where we supplied 8t and 12t flat-top cranes. It was very challenging as the 8t crane had to be initially erected at 46.5m to operate over the antennae of neighboring buildings, and the 12t crane had to freestand at 87.5m in order to overlap the 8t crane, once erected at final height.

"We also didn't have permission to erect them on the pavement, so they had to stand within the building. There was very limited space for foundations, so we had to design very long but narrow eccentric foundation slabs. And, there was very limited access for mobile cranes to erect the 8t crane, so we couldn't erect it at the complete height from the beginning; we had to erect it initially at 46.5m, and we will have to tie it to the building once and jack it up to 75m.

"The 8t crane is now up at initial height, and the 12t crane is due to be erected in late September."

Local network
As well as some signs of growth in Spain, another positive in the market can be seen in areas such as the Basque country, where there is a healthy industrial sector supplying the crane manufacturers - including Jaso and Linden Comansa - with materials. There is also plenty of space and infrastructure for multiple facilities, enabling crane companies to develop their operations.

"We have good access to steel, as ArcelorMittal in particular and other steel suppliers such as ThyssenKrupp both have local facilities, so we don't need to keep a large stock at our premises," says Huitema.

"The local area is very industrial, and there is a concentration of crane manufacturers nearby.

"We produce towers and jibs at our Zaragoza facilty, and have a stand-by plant in Olaberria where we manufacture one-off components, and a large variety of anchor bases for different surfaces, pressures and crane heights.

"Our rental fleet is divided among three depots although the largest part is located at our Zaragoza facility and at Madrid, with some at our Idiazabal premises too. We operate a justin- time operation, so don't keep cranes in stock.

"Our factory at Itsasondo was set up to produce jibs for small cranes, and in the past manufactured six cranes a day.

Now the business focuses on producing larger cranes, which provide better value.

"While for hammerhead cranes the counterweights are made of concrete, it is quite common to use steel counterweights on our luffing cranes, which are smaller than concrete alternatives, and can therefore produce shorter counterjibs. One of the strengths of Jaso is its high-rise luffing cranes, which offer value for money and short radii.

"We used to produce our own gearboxes, but more and more we now source them from Siemens/ Flender in particular for the larger end of our portfolio.

"Our slewing motors are from Bonfiglioli, and a local Basque company called Lau Lagun supply slewing rings. Strong slewing rings are important for our semi-flat-top cranes as there is just one short tie, so there is more pressure on the ring. Lau Lagun also supply slewing rings to the windmill and aeronautical industries. The gearwheels used in our own design of gearboxes are also locally produced.

"We source electrical components from Stromag, motors from Lafert, which bought AEG. We typically source remote controls from Autec but we can use any brand. We produce our cabins in-house, but chassis and components are bought from renowned suppliers."