Crane builders rush onto the road to Oz

21 October 2011

It is hard to think of a significant maker of mobile or crawler cranes not presently active in the Australian market. Viewed from Europe or America, Australia’s economy, stability and prosperity look pretty wonderful. Stuart Anderson reports

Near South of the Far East
Australia has always been a favorite market for Asian manufacturers looking to get a first experience of a market with Western standards of product quality, regulatory compliance and product support. In the 1960s and 1970s the Japanese ‘used’ Australia to learn about customer expectations. They did it well and produced top quality products and were rewarded with a domination of the market for mainstream truck cranes, RTs and crawler cranes that largely endures today. The phenomenal success of the 55t Tadano GT-550EX swept everything before it, with well over 100 units sold in Australia before its discontinuation in 2009. Kato, traditionally a very strong brand in Australia, has not been able to emulate Tadano’s success with its 55t NK 550VR, which is mounted on a Chinese FAW carrier. Consequently this category, at the heart of the Australian taxi crane market, is begging for a strong new entrant. The new Tadano 60t GT 600EX may be the answer but doubts have been expressed about its ability to meet Australia’s stringent road regulations in full taxi-crane mode.

For the past five to six years, the Chinese have sought to follow the Japanese. They were warmly welcomed by local distributors and customers to the extent that from 2006–08 some 150 new Chinese truck and crawler cranes were imported and sold.

Despite the best efforts of local importers, the success of Chinese manufactuers has not mirrored that of Japanese. Australian distributors who blazed the trail for the Chinese cannot be criticised in their attempts to fully inform their manufacturers of local customer expectations and market demands.

Some of these distributors have gone to extraordinary lengths, none more so than Australian Crane & Manufacturing (ACM). The Melbourne-based distributor was the first to introduce Chinese cranes to Australia in the shape of the XCMG truck crane line. Few independent Australian distributors have more imports experience than ACM having pioneered the import of Liebherr ATs back in the 1980s, represented Tadano and established itself as the market-leading distributor of crawlers through its Kobelco franchise.

Over a two year period ACM imported about 100 25-65t capacity XCMG truck cranes, working closely to communicate Australian needs. Soon afterwards Brisbane-based Dellgale began importing Zoomlion cranes, and in 2007 James Equipment began importing Sany crawler cranes. Despite some significant early quality problems, the crawlers generally faired better than the truck cranes.

Over the past two years ACM has gone to extraordinary lengths to ensure the cranes meet the needs of Australian users. Prior to delivery, each new or reconditioned crane spends up to eight weeks in ACM’s Campbellfield workshops. Original engines and transmissions are replaced with new UK-built Cummins diesels and US Allison automatic transmissions. Also original electrics are replaced with Australian electrics, including the replacement of Chinese-licensed PATs with locally-made Robway LMIs, along with numerous hydraulic circuit changes and improvements.

As a display of ACM’s support for the product, the dealer offers extended warranties of up to two years. The result is a product that costs as much as a staggering AUD100,000 more than the original, but the distributor has proven its long-term commitment to the market and the product.

In the meantime, the original Sany distributor, James Equipment has been wound-down by its parent company Boom Logistics while, for wholly different reasons, the original Zoomlion dealer, Dellgale, has also left the field to be recently replaced by Melbourne-based Gleason Cranes. Chris Logan’s Gleason (no connection with the iconic Chicago-based Grove distributor) has its foundations as a used crane dealer as well as currently representing Furukawa-Unic, Ormig and Galizia. The Zoomlion truck cranes did not suffer as many issues, but during the past two to three years their sales have slowed significantly.

Chinese crawler cranes have been better accepted probably because there are fewer hydraulic and electrical parts on a crawler crane, not to mention lack of an automotive power train. Sarens has bought a number of 80t and 180t Sany SCC 800 and SCC 1800 crawler cranes for its Australian fleet. Sarens’ local country manager Gerd Hendrickx believes that remaining customer resistance is largely due to earlier problems, but concedes that there are reliability issues, and for the high-profile major projects contractors will pay for the leading brand products.

Having purchased Perth Crane Hire two years ago and since ended its joint-venture with Universal Cranes, Sarens Australia has built up a significant presence with yards in Yatala, Queensland; Tuggarah, New South Wales; and Perth, Western Australia. Its fleet now counts almost 50 mobile cranes as well as 40 axles of Kamag SPMTs, with everything from 20t Frannas to Liebherr’s 800t LTM 1800 mobile and 550t LG 1550 lattice boom truck crane. Sarens’ local crawler fleet includes 350 and 400t Liebherr LR 1350 and LR 1400 crawlers, as well as 450t and 600t Terex CC 2500 and CC 2800 crawlers. In 2012, it will add two more TC/CC 2800s and two more LR 1350s.

Currency curses
Despite Australia’s economic resilience through the global recession, the dramatic skid in the value of the Aussie dollar precipitated by 2008’s global financial meltdown resulted in a 2009 spike in the cost of imports, reaching as high as 40%. After 2008’s records, total crane imports dipped significantly in 2009, with just 68 ATs and 10 RTs imported. The rapid recovery of the Aussie dollar combined with the strength of underlying demand saw last year’s crane sales remain steady, with 68 ATs imported while demand for RTs strengthened significantly with 40 large units imported.

Key sectors of the AT market remain the 100t and 200-250t classes (with 25 and 20 units sold respectively), supported by eleven 130-tonners and eight 350-tonners. In the RT market, 70–80-tonners were absolutely dominant, accounting for over 75% of total demand.

Through the first half of this year, demand momentum has accelerated. Compared to H1 2010, sales of ATs increased 20% to 58 units and was again dominated by 100, 130 and 250-tonners while the strength of mining-industry demand propelled RTs sales upwards by 62% to 26 units, again dominated by units of 70t and greater capacity. While Liebherr remains the AT market leader, followed by Grove and Terex, Tadano’s GR 700 and Grove’s RT 890E dominate as the most popular RTs.

Relatively new entrants to the Australian market include Link-Belt and Sennebogen. A year ago former Liebherr distributor Baden became the local distributor for Link-Belt telescopic truck cranes, telecrawlers and RTs. The first batch of Link-Belt cranes arrived a few months ago and Baden has already sold 12 RTs and two telecrawlers. For the first time Link-Belt and Baden displayed at the CICA Conference at Surfer’s Paradise, Queensland this year, showing a 120t RTC 90130 Series II (since sold to Monadelphous), a 70t TCC 750 telecrawler (the second purchased this year by Western Australian piling contractor Wagstaff) and an 85t HTC 80100 truck crane. The latter is the only Link-Belt truck crane to meet Australian road regulations as well as boom reach requirements, thanks to its five-section 42.7m (140ft) boom. It’s a bit of a gamble for Baden to pursue this strategy since the Australian truck crane market demand has long been rooted in 50–55t capacity taxi-type truck cranes rather the 80–90t class. But Baden has found that the booms of the smaller Link-Belt truck cranes are simply too short for local demands.

The distributor, trading as Ben Baden Services, recently re-occupied its extensive 14,000 sq m service and workshop facilities in Arndell Park, Sydney that it had leased to Boom Logistics after Liebherr decided to go direct in Australia. This provides Baden with the capabilities to re-establish the excellent reputation for product support it earned over the preceding 12 years.

Link-Belt and Hitachi-Sumitomo have been unwilling to afford Baden with access to the crawler crane line. This is represented in Australia by Tutt Bryant, the local division of Singapore’s Tat Hong. Tat Hong is probably the world’s largest distributor for Hitachi-Sumitomo/Link-Belt lattice crawler cranes, but in Australia, Tutt’s activities seem to be focused on crane hire rather than new crane retails.

The other new entrant, Sennebogen, recently scored a success, with its distributor, PACE Cranes, selling the first 608 Multicrane to the Department of Public Works in New South Wales. The compact crane that was displayed at the CICA Conference is a very versatile crane, and has been mounted by PACE on an Australian-designed hi-rail system for road-rail mobility. The customer has chosen the entire suite of attachments including the 8t capacity winch and 800kg capacity 2–4m extendable 360° rotation aerial platform, as well as 5.5t capacity lifting forks. Other standard features include a five-section boom offering a 20m lifting height and a hydraulic elevating operator’s cab.

Firmly established at the heart of the Australia crane hire market remains the iconic Franna articulated frame AT pick-and-carry cranes in the 15–25t classes. Terex chose the occasion of the latest CICA Conference to celebrate the sale of the 3,500th Franna. Significantly, this landmark unit—sold to Lee Crane Hire— was not the 20t AT-20 that has long sustained the manufacturer, but its big brother, the 25t Mac 25. Franna has long been aware of the capacity barriers of its two-axle 24t crane concept but, possibly with a little German influence, has unveiled an ‘SL’ (Super-Lift) version of the crane featuring a 2.16t additional rear counterweight that boosts capacities in some areas by up to 30%.

Over recent years, demand for the larger Franna has steadily increased to the point where its production volume is now close to parity with the 20-tonner. Last year sales dipped about 10% to around 260–270 units but this year will likely reach a record of some 310 cranes. Such is the sustained popularity of this most versatile of cranes that when deliveries extended to 18 months during 2007-8, prices of production slots and young second-hand cranes soared into the stratosphere.

Today, the only domestically-produced challenger to Franna remains the DRA ‘Humma’ line produced in Perth, Western Australia. Certainly the Humma employs high-quality components including Cummins diesels, Allison automatic transmissions, ZF transfer cases, Kessler planetary drive/steer axles and Robway LMIs. Fighting an ‘icon’ like the Franna is never easy but the manufacturer has been innovative with its designs incorporating a 4-camera operator aid system, air bag suspension for smooth roading as well as longer full-power booms and higher lift capacities.

Competition also continues from ACM with its 22t capacity ARC 22, built by XCMG, and a successor to its predecessor, the ‘Panda’. After a long and rather rocky beginning, ACM are hopeful that its latest articulated crane offering will find increased acceptance against the higher-priced domestic competition.

Troubled times in town
While the mining industries get all the global attention, economic activity in New South Wales and Victoria—and indeed in all of the country’s main metropolitan centres—has been anything but booming. Amongst the established crane hire firms to fail have been Huntingdale Cranes and Campbell Crane Services, both of Victoria.

In New South Wales, after 16 years of Labour Government, the incoming Liberal Government has sought to address a budget deficit forecast at $718m by slashing public service jobs, cutting projects planned by the previous administration and seeking massive efficiency savings. Also, just as the Queensland Government addressed its deficit issues by selling off its Railway assets, the New South Wales Government announced it will sell state assets including Port Botany.

The resources boom continues to drive Australia’s economy, further strengthening the behemoths of BHP Billiton and Rio Tinto. Take away the mining industries and Australia’s exemplary banking sector and a completely different picture emerges. The major mining companies and the four big banks generated 99% of the profits made by Australia’s 50 largest companies during the past fiscal year. The remaining 42 companies contributed only 1% of profits.

With a market cap of AUD193.2bn, BHP Billiton is now ranked above Wal-Mart and GE. Throughout the global recession, commodity prices proved remarkably resilient with iron ore trading near record highs, encouraging a consensus forecast for BHPs 2011 earnings to increase by 24% over last year’s record annual profits of USD23.6bn. Though analysts presently expect flat earnings in 2012 and 2013, key to BHP’s future remains demand from China and India. Already, ‘The miner’ has committed to spending a record USD20bn on growth, which, together with dividends, will consume all its projected cash flow for the next five years — much greater than that of its rival Rio Tinto which plans to spend 55% of its cash generation on growth.

Amongst BHP’s projects are the Olympic Dam project in South Australia mining gold, copper and uranium; a new iron ore port in Western Australia; new port and rail facilities for coking coal in Queensland; the development of nickel deposits in Ravensthorpe; and the Worsley aluminium expansion. Meanwhile in North America, BHP is building a potash business in Canada and recently acquired a shale gas business in the US.

The outlook for the mining services business is looking particularly healthy with several of the leading contractors issuing bullish forecasts. Underlying the optimism is the volume of recent contract announcements combined with that of early framework agreements to lock in contractors over extended periods as well as the strength of tendering activity.

Amongst the leaders is the Monadelphous Group with a market cap of AUD1.63bn. During the six months to June, Monadelphous reported revenues of AUD1.4bn, net profits of AUD95.1m and EPS of AUD1.09. With low gearing and impressive cash generation, Monadelphous has generated ROE of 55.4% per year over the past three-years—more than double its nearest sector rival.

A new arrival on Australia’s shores is the Spanish Grupo ACS, which last year acquired the famous German contractor Hochtief along with its 54% share of Australia’s leading contractor, Leighton Holdings. With debts of €9.8bn (AUD13bn) ACS is now looking to see close to 70% of its 2011 revenues to stem from international business, to compensate for the downturn back home. Currently Leighton has AUD1.5bn in mining contracts on its books as well as the AUD470m job to build the new Royal Adelaide Hospital. In the wake of the acquisition, iconic Leighton boss, Wal King, retired to be succeeded as CEO by David Stewart, until he quit at the end of August to be replaced by Hamish Tyrwhitt. This follows criticism of the AUD907m write-down that Leighton took early this year that precipitated an investigation by the ASE (Australian Exchange Commission) and a class action lawsuit.

Meanwhile Bechtel continues to build upon its long-established presence in the Australian market. Bechtel’s H E ‘Skip’ Livermore, a perennial attendee of CICA Conferences, explained the extent of Bechtel’s latest three LNG contracts in the Gladstone-Curtis Island area of Queensland. The first of these started up in April, the second is just commencing and the third will get under way at years’ end. All are of 30–36 months duration and represent a total value of around USD20bn. 2013 will see the start of the Wheatstone project, which is larger than all three of the above. In Australia, Bechtel owns a fleet of about 100 cranes: that includes Frannas; Grove and Terex RTs; and Liebherr, Link-Belt, Manitowoc and Terex crawler cranes topping with two 500t Demag CC 2600s that will soon be joined by a 600t CC 2800-1.

Boom begins to bloom?
It’s been a very difficult last few years for Australia’s leading crane hire company. But, in reporting the results of its last fiscal year ending in June, Boom Logistics was able to provide a positive vision of the long-term future of the business with crane logistics (hire) at its heart. In discussing the company’s recent performance, Boom’s non-executive chairman John Robinson drew attention to the negative impact on crane utilization caused by the extensive flooding of Queensland’s Bowen Basin coal mining region and the cyclonic activity in Western Australia’s Pilbara region. Robinson further explained that Boom’s capital expenditure program had stalled due to the slow-down in its Metropolitan markets, causing the company to increase thirdparty cross-hires which in turn had impacted earnings.

Managing Director Brenden Mitchell said: “As we look forward we do expect to deliver a 50% or better increase in our EBIT results from our crane logistics business, and revenue increases from resources are expected to grow strongly in the new financial year and beyond.”

Net profits for the year were impacted by several extraordinary items including an AUD18.3m write-down of goodwill associated with the Boom Sherrin AWP business, a AUD19.1m impairment of assets, a AUD3.9m restructuring charge and a AUD1.4m write-down of goodwill in exiting the GM Baden business. Boom explained that the percentage of its crane logistics business attributable to resource (mining) customers increased to 53% in fiscal 2011 compared to 47% a year earlier. The rest of its 2011 business was divided by sector: at 26% infrastructure, 11% manufacturing, and 10% energy and utilities. In 2011, Boom renewed its contract with BMA (BHP Billiton Mitsubishi Alliance) for a further three years with options to serve all nine sites across central Queensland. Boom said it expected this to represent over AUD120m in revenues over the next three years. Amongst other major projects, Boom is also working with the Theiss-John Holland joint-venture airport link.

Who’s buying what?
Benefiting from its network of eight branches throughout the main mining regions of Western Australia as well as its significant presence in Queensland through affiliate Global Cranes, Freo Machinery has consolidated its position as the largest crane rental company in Western Australia. After adding a third 500t Liebherr LTM 1500, Freo further expanded its fleet to 225 mobile cranes with the recent addition of five 70t Tadano GR 700 RTs, a further 220t Grove GMK 5220, a second 350t Liebherr LTM 1350-6.1, another 200t LTM 1200-5.1 and a 95t LTM 1095-5.1.

While Liebherr remains the AT crane market leader in Australia, Grove continues to enjoy success especially with its 130t GMK 5130-2 and top-of-the-line 450t GMK 7450. The latter has become the best selling large AT crane in Oceania thanks in no small part to its ability to meet stringent road regulations without having to remove its boom. The first of this model to work in New Zealand will shortly augment the fleet of one of the country’s leading crane hirers. Travelling on the highway with a three-axle trailing boom dolly, over the past few years the 7450 has joined the fleets of leading Australian crane hire companies Melrose (NSW), Borger (NSW), Sergi (VIC), All State (NSW) and Boom Logistics, which operates more than ten Grove ATs of 200–450t capacity mainly in WA and QLD.

The mining companies have also long been major customers for Grove, not only for its larger-sized RTs but also for the high capacity GMKs.

Grove’s Bayswater, WA-based long-serving distributor for Western Australia, WATM, has developed particularly strong relationships with the mining companies. BHP Billiton’s fleet of GMKs tops-out with the GMK 7450 while Rio Tinto is about to take delivery of its first two units of the Grove 450-tonner to extend its fleet of GMKs of 200t+ capacity into double figures. Meanwhile Fortesque Metals recently expanded its fleet with the purchase of a new 80t Grove RT 890E and 300t GMK 6300.

While Grove has the largest population of higher-capacity RTs in Australia—topped by Freo’s fleet of three 120t RT 9130Es—Tadano’s soon-to-be-discontinued 70-tonner has also become a highly-popular unit. This model has been the bedrock of Tadano Oceania’s business over the past couple of years. Not that Tadano Faun’s ATs are without a growing presence. The most recent sale of the 220t ATF 220G-5 was to GBR Cranes, the first of this model to enter New South Wales and roadable with boom installed with a three-axle trailing boom dolly.

Both current and anticipated heavy crane demand for the massive LNG and infrastructure projects has seen significant investments in large 550–750t crawler cranes such as the Kobelco SL 6000, Liebherr LR 1750, Manitowoc 18000-MaxEr and Terex CC 2800 that have joined the hire firms of Boom Logistics, Freo, Lampson, Sarens, National Crane Hire, Tutt Bryant, Universal and Walter Wright. End-users like tilt-up concrete contractors and mining service providers are also adding large cranes, with WATM placing two 400t Manitowoc 16000s in Q4 2011. Unfortunately, given the slowness of the metropolitan economies, it seems that any significant rebound in tower crane activity will be some distance in the future.

Terex keeps Nine on air
Nine Network is one of the most watched television stations in Australia. The network has a long history as an innovator in the Australian broadcasting industry. Having recently constructed new high-tech, purpose-built studios for Melbourne, Nine Network needed a 2.8t (3.1USt) satellite dish installed on top of the 61m (200.1 ft) building to transmit from the new site.

“The task of lifting the satellite was made comparatively simple because of the planning that went into the job,” says Tim Metcalf, director of Metcalf Crane Services, who owns and operates Terex crane equipment.

“The satellite system was designed by RG Systems, and because of the parameters of the project, the building manager at Nine Network recommended RG Systems have us do the installation.”

To install the 15m (49.2ft) diameter dish on the roof, the satellite needed to be lifted 80m (262.5ft) up and over the building. Metcalf’s crew used two Terex cranes, an AT-20 pick-and-carry and an AC 350 AT, to lift the dish from the truck bed and into position on the building’s rooftop in just four hours.

High winds, up to 8m/s (nearly 18mph), and the all-glass design and structure of the new GTV-9 studios, further complicated the delicate lift. “My crane operators had to closely monitor the anemometer to confirm the wind speeds and make adjustments accordingly,” said Metcalf.

Sarens bridges Myall River
New South Wales’ Roads and Traffic Authority is currently working to upgrade the Bulahdelah section of the Pacific Highway. The Bulahdelah upgrade includes the construction of 8.6km of four-lane divided carriageway on the lower north coast of New South Wales.

The project will connect the already upgraded Bulahdelah to Cooloongolook section of the Pacific Highway to the completed Karuah to Bulahdelah upgrade project.

Major work started in July 2010 and is due for completion in late 2012. As part of the project, New South Wales Roads and Traffic Authority (RTA) will be building a series of bridges, including across the Myall River. Earlier this year, the land-based ends of the bridges and foundations were completed. Now, work has begun on placing the T-girders that will form the main structure of the bridge.

The girders were made in Teralba near Newcastle. Each is around 35m long, two metres wide, 1.8m high and weighs around 80t. A total of163 girders are required for the Myall River bridges, the nearby southern floodplain bridges and Bombah Point Road bridges. More than 90 are needed to build the Myall River bridge alone.

Sarens unloaded 180 x 82t Super “T” beams into storage, reloaded them with a 250t Hitachi Sumitomo SCX2500 and installed them from 14 locations with a 400t Liebherr LR1400-2.

The work was completed by only dismantling once to relocate from the south bank of the Myall river to the north bank.

A New South Wales RTA spokesperson said: “This is a significant milestone for the project and when the community can really start to see their new bridges take form as the massive crane lifts them into place.”

Review A History of Cranes in New Zealand, John Carter
In John Carter’s From Crank Handles to Hydraulics: A History of Cranes in New Zealand, the author takes his readers from the earliest recorded uses of cranes in the country to the present day. Starting with the first known mentions and illustrations of crane structures such as the Greco-Roman Trispastos, which as Carter indicates may have been preceded by similar Egyptian designs prior to the 5th century, Carter meanders from the tread wheel crane to steam-powered models.

Beginning with the important role the crane has played in New Zealand’s maritime industry, the book covers the development of rail, derricks, loader, overhead, tower, mobile and crawler cranes, while picking out key figures as the fledgling industry developed.

Along with dozens of well-used photographs and clippings from periodicals of the day, Carter dedicates a portion of the book to the industry’s regulation, and people like Barry Dinan, of the Crane Association of New Zealand, whose noteworthy contributions continue to this day. Along with lighthearted cartoons and a technical glossary at the back, the book’s easy reading ‘coffee table’ style makes it an accessible, entertaining and eminently readable guide to New Zealand’s crane industry.

Hall grabs first Liebherr LTC 1045-3.1
Hall’s Cranes in Adelaide took delivery of the first Liebherr LTC 1045-3.1 as this article was going to press. John Hall, who founded Hall’s Cranes in 2000, says, "For us, Liebherr is the Rolls Royce of the crane industry."

One of Hall’s specialities is supplying cranes for use in cramped job sites. The 45t three-axle compact mobile crane was launched at Bauma in Germany in 2010. Liebherr says that its tight, 6.1m, turning radius makes it ideal for this sort of job.

Hall plans to use the new crane, which he displayed to colleagues at September’s CICA conference, for taxi crane work on tight job sites, and on the South Road Superway project. This project is the largest single investment in road construction ever in south Australia and is scheduled for completion by the end of 2013. A compact but powerful crane is needed to carry out the road works beside the daily flows of traffic.

John Hall (left) of Hall's Cranes, Liebherr Ehingen's Christophe Kleiner and Andrew Hall (no relation) of Liebherr Australia. John Hall (left) of Hall's Cranes, Liebherr Ehingen's Christophe Kleiner and Andrew Hall (no relation) of Liebherr Australia.
A few of Freo's extensive fleet A few of Freo's extensive fleet