The interview – Magic man

Absorbing the content of presentations within Cranes Asia’s state of the market section, or exchanging stories with fellow delegates, you would be forgiven for concluding that it will take a magician to get us out of this.

Actually, it will take more than that, says Mike Maruo, who has been practicing magic for 25 years.

“I sometimes get phone calls from customers overseas asking me to solve their problems with my magic, but of course that doesn’t work. I just try to solve them with my factory and administration staff etc. I guess that’s another form of magic.”

Having summed up the state of the market in Japan in his presentation on the first morning of the conference, Maruo mystified fellow speakers from Terex and Manitowoc, among others, with a trick or two during the lunch break.

“I’ve learnt my magic in many places. Once you share your tricks, people will introduce you to others. I don’t practice much because I do very simple tricks and, actually, it’s something that everyone can do once they know how.”

Seriously though, the global market “will see a further drop in demand in 2010 in comparison with 2009; my guess will be about 30%,”Maruo says. “We are trying hard to adjust production capacity in accordance with market demand.”

The second half of the past decade will be remembered for the insatiable demand for lifting equipment, a state of market that we may never see again, then the rapid decline. Maruo is cautious about predicting any short term upturn. “The next decade will not follow the same path. There’ll be no over-heated market conditions and not such high demand, like we saw in 2007 and 2008. We will see a small recovery from 2011.

“2010 will be very slow, especially for rough terrains. Customers will remain in a wait-and-see mindset. There is hesitancy over public construction investment plans, with budgets still under review. This situation is the same all over Japan as well.

“There are no real signs of recovery but once the government starts approving public projects, the mood will improve.

“Towards the end of the decade, say, 2007 and 2008, the Japanese market was growing, just like pretty much everywhere else, but since late 2008 it started to slow, again, in sync with overseas markets.

“My job was to fairly distribute limited, available machines to each areaor distributor—and to apologies for longer lead times. Manufacturers did not want to expand facilities to accommodate more production with fears of the big drop, which became reality. We had to try to make more cranes by increasing efficiency, but not increasing our facility.

“Demand at one point was such that even three-year-old cranes were higher in value than brand new machines because of earlier delivery.”

Maruo points at trends that will shape the future, including increasing demand for larger cranes, wind power and Chinese crane makers coming more into the market. “Mineral resources (oil, gas, metals) prices have also become key factors for crane demand,” he says.

Maruo’s presentation at Cranes Asia explored the peculiarities of doing business in Japan, including the need to cope with challenging environmental conditions, for example, landslides and earthquakes. The Japanese landscape, with mountains separating cities, has led to big companies working in tight geographies, often around one, big city.

“Additionally, fuel consumption and noise are certainly major issues, as is complying with increasingly stringent road regulations.

“We are selling machines with bio-oil for some markets (such as Europe) but there are even requests here for bio-energy, in other words, to enable a crane to operate with mixed fuel, including cooking oil. There are no solutions yet but some of the local government cars are already using such methods. Additionally, some banks are offering better interest rates, if a company is using eco friendly machines.”

Maruo can measure the level of planning sometimes involved in getting a crane to a site by his other hobby: golf. “Living in the Tokyo area, it is a rather big job to go to a golf course. It takes, on average, two hours to get to a course and three hours on the way back due to the heavy traffic. And it’s very expensive.

“In fact, I’d rather spend more time in the driving range at the weekend and limit the frustration at getting a bad score and sitting in traffic. This is better for my family— and my dog. My average score at the course is 90-95.

“I have other hobbies, including playing the piano; actually I was a member of a blues b and consisting of local musicians in Houston, when I was working as president of Kobelco Cranes North America [2004-2006]. But I am still, say, only halfway to being as good as I’d like to be. I started taking lessons when I was about 30 years old. I also enjoy farming and growing vegetables.”

Maruo is not alone in predicting that the industry may have to endure another barren harvest or two before it can feast on the fruits of truly favourable market conditions.