In times of recession, investment is usually shelved as belts are tightened and capacities are cut back to match market demand. This has been evident in the crane industry, with thousands put out of work and production volumes in decline as factory doors close and orders dry up.
The market has swung from a record breaking boom at the start of 2008 to a seldom-seen slump that has made every company, from multinationals to local specialists, cautious about their markets and what the future holds.
Cash flow
But for those with the financial muscle to maintain a healthy level of investment, the rewards when the market returns could be massive.
Graham Booth, managing director of the UK’s BPH Equipment, says his company has kept up its investment programme, which has seen it invest around GBP10m (USD16.4m) in new equipment over the last couple of years.
The need to maintain investment can be put down to one simple reason, Booth says. “You can’t wait for the market to support investment, as when business returns manufacturers’ lead times increase and you’re left waiting.”
Through this investment programme, Booth says BPH is keeping abreast of product and technological developments, as well as keeping the age of its fleet down.
“We look to maintain a low age profile across our fleet, which opens up opportunities to invest. We aim for between 8-10 years; 10-12 for the large crawlers.
“We’re also looking at the latest technologies in the crane market when investing. Fuel economy and fuel emissions are big issues, with the green influence extending to biodegradable oils.
“Load instrument control is another area where there have been advances with better load moment limiting improving safety, which is another big issue.”
Ainscough Crane Hire has certainly not shied away from investing in crawler cranes. The heart of the company’s business has always been mobile cranes, but earlier this year it announced it had invested in its own fleet of crawler cranes to supplement its mobile division.
Ainscough has ordered six 500t-plus capacity crawlers from Terex and Liebherr: two 500t CC 2500s, two 600t CC 2800s and a 1,250t CC 6800 (Terex), and a 600t LR 1600/2 (Liebherr)
This, it said, was to fill a hole in the supply of large crawlers in Europe. Two of the crawlers, a CC 2500 and a CC 2800, are now in Ainscough’s possession and working around the UK. A third is to arrive by the end of the year with the rest delivered in 2010. The latter models will not be delivered until there is work for them (“so we’re not suddenly up to our ankles in crawler cranes in the yard,” Partridge says), thanks to an agreement it has with the manufacturers.
The CC 2500 has been working on a waste-to-energy plant since it was handed over, while the CC 2800 has worked on a number of jobs, including the recovery of a container crane that collapsed at Southampton dock in July, power station construction and projects for the London 2012 Olympic games.
Six months on, is the decision to invest still proving to be the right one? Partridge points out it are still early days for the crawlers but Ainscough is actively seeking work for them and already has a number of jobs lined up.
“I’m very happy with what we’ve achieved so far,” says Partridge. “It does help us secure larger projects. We already had success on larger projects with mobile cranes, but we’re now able to offer a more rounded product portfolio to customers.”
This rounded offering has been further supplemented by the addition of a pair of 300t Liebherr LR 1300 crawlers, which Ainscough has bought. These are both on long-term hires, which Partridge says tends to be the nature of crawler cranes. Ainscough is also continuing its long-standing cooperation with Select Plant Hire, which sees Select hire mobiles from Ainscough and Ainscough hire smaller capacity crawlers from Select.
Partridge says the market for the larger crawlers remains modest, and that Ainscough will continue to be primarily focused on the mobile crane market; it has over 500 mobiles on its books compared to less than 10 crawlers.
Nonetheless, he is confident of the market opportunities that the crawlers offer. “It improves our offering and is another string to our bow. It is a relatively modest string but I’m happy with where we are at,” he says.
“Our belief that there would be consistent call for heavy crawler cranes has been proved correct; demand from the energy and infrastructure sectors is most promising.
“I think our customer base who use these crawlers is happy to see Ainscough investing.”
Model 31000
Manitowoc’s Model 31000 is edging closer to the finishing line, with both Bulldog Erectors’ and Crane Rental Corporation’s cranes working their way down Manitowoc’s production line.
The 2,300t capacity crane, Manitowoc’s largest, features a lift enhancing mechanism that eliminates the need for a counterweight wagon. This new innovation, called the VPC (variable position counterweight) never touches the ground and extends or retracts as needed by the crane’s lift.
Bobby Shirey, president of Bulldog Erectors, was the first to put pen to paper and sign up to buy a Model 31000, which was formally introduced at ConExpo 2008 in Las Vegas. He says the decision to invest came after the company had watched the crane take shape on the drawing board. “Our mindset here is that it is an untapped market with manufacturer-backed ultra heavy lift machines,” says Shirey.
“We followed the process all the way from the initial stages and it seemed like the right thing to do.”
Manitowoc’s Model 31000 cranes are expected to be primarily used in the power and oil industries. Bulldog has signed a number of confidentiality contracts relating to upcoming work, so is unable to be specific about exactly which project the crane will travel to first when it is delivered at the end of 2010.
Shirey says he believes the decision to invest remains the right one, as the market for ultra heavy lift cranes hasn’t changed greatly during the global economic crisis. Larger investments also make it easier to manage company overheads and assets, he says.
He adds that Bulldog may have already made money on the Model 31000 as the crane’s value has increased in the 18 months since Bulldog agreed to buy. Moreover, he says higher end capacity cranes, above 300t, are better holding their value in the marketplace than lower capacity cranes.
Further crane investments, “on the upper end of the crane scale,” according to Shirey, are in the pipeline for Bulldog, both crawler and otherwise.
LR 1600/2
Liebherr’s LR 1600/2 has been a popular choice for many crane companies investing in crawler cranes. Particularly in Germany, where Maxikraft and Breuer- Wasel have both taken charge of one of the 600t crawlers.
Maxikraft was the first German company to take charge of an LR 1600/2 when it received the keys to its crane at the end of June. It has been used extensively in the installation of wind farms since the summer, including 2MW Enercon E-82 turbines at the wind farm in Gross Schacksdorf, near Frost. Other work planned for the LR 1600/2 includes industrial construction and bridge building.
Maxikraft said it had been planning to invest in its crawler crane fleet, which already consists of a Liebherr LR 1350, three Terex CC models (1500, 2400, 2800) and a Sennebogen Star Lifter 3300, as they can move under load and can be moved quickly around job sites. With the LR 1600/2, it said the weight and dimensions of single components allow economical transportation.
“The development in [wind power] shows that the investment in the LR 1600/2 was a good decision,” said a spokesperson for Maxikraft. “With a hook height of 148m it is possible to setup wind towers up to a height of 138m.”
Breuer-Wasel’s LR 1600/2 is also being used to construct wind farms, as well as other power installations in Europe. It supplements an existing crawler fleet consisting of two CC 2800s, an LR 1280 and three LTR 1100s.
Matthias Wasel says crawler cranes are an important part of the company’s future and that it plans to invest further. It is to order an LTR 11350, and possibly a further LR 1600/2, he says.
He adds the company’s decision to invest in the LR 1600/2, taken at the start of 2008, has been vindicated as it has work for the next 12months for the crane.
“We believe that crawler cranes will get more important to our long-term future. Europe and the east will be a great market for crawler cranes to erect wind power and power stations.”
Fellow German firm Wiesbauer has also built on its crawler fleet by acquiring two Sennebogen Star-Lifter models: a 5500 and a 3300. One of the first jobs for the 5500 Star-Lifter was the construction of a new logistics centre for pet products company
Fressnapf Tiernahrungs in Feuchtwangen. The 180t capacity crawler was used to lift and position solid walls, main girders, frost barriers, supports and other components during construction.
Working hard
There are many examples of how the continued demand for crawlers is providing crane companies with important business opportunities.
Terex says demand for higher capacity crawlers remains buoyant as global infrastructure projects and energy-related projects continues.
Dutch firm Mammoet has used crawlers to help prepare South Africa to stage the 2010 FIFA World Cup. At the Moses Mabhida Stadiumin Durban, an LR 1400 lifted and placed 105 60t concrete columns for the frame of the stadium, and at the Green point Stadiumin Cape Town, it lifted and placed 4,215 pre-cast elements, including 1,560 seating units.
Mammoet has also used a Terex- Demag CC 2400 to assemble, lift and lower a boringmachine into place at a power plant in Flamanville, France, as well as a CC 4800, two CC 1800s, a CC 2400 and an LR 1350 to install eleven columns at a petrochemical plant in Singapore.
In Brazil, six Manitowoc crawler cranes are working as part of a fleet of 29 cranes to complete construction of the largest shipyard in the southern hemisphere, the Atlântico Sul Shipyard at Ipojuca. Three 750t Model 18000s, a 400t capacity Model 16000 and two 250t capacity Model 999s are working on site, alongside 23 mobile cranes.
The shipyard was established in 2005 and has a processing capacity of 160,000t of steel a year, and is able to build ships up to 500,000 dead weight tonnes. One of the most recent projects has been the erection of two 1,500t capacity gantry cranes, which has needed two of the Model 18000s to unload the components, before erecting the gantries. Other work
for the cranes on site includes the construction of ships, positioning large elements and providing support activities.
Sennebogen details a number of jobs where its crawlers have been made to prove their worth. OHF Hafen- und Flussbau used a 660 HD dragline crawler to modify a ship container bridge at the oil port of Karlsruhe in Germany to handle larger ships up to 7,000t. The 660, equipped with a vibrating drive hammer and a hammer guide, also rammed 24mlong dolphins into the foundations of the harbour in order to provide guides and mooring points for the ships. The 22t 24m-long dolphins are driven to a depth of 10.5m.
In the UK, brick manufacturer Hanson Building Products, part of Hanson plc, a leader in the mining industry, has employed a Sennebogen 6180 HD dragline crawler for clay mining. The crane, equipped with a 30m-long boom, two 30t winches and a six cu yd drag shovel, is being used to excavate clay to supply Hanson’s two clay brick works.
Mining the market
A growth in global mining activities could prove another valuable market for crawlers. A recent report from the Minerals Council of Australia has indicated that mines around the world will have to be overhauled in order to become bigger and more productive to match future demands for minerals.
The report says that by 2030, global coal production needs to grow by 45% on 2006’s production levels, iron ore by 54% and aluminum by 58%. The required ‘super mines’ will need large amounts of machinery to carry out the work to increase their production volumes, including crawlers.
The ICD Research Global Mining Industry Outlook to 2010: Buyer Spend and Procurement Strategies and the Impact of Recession and Recovery report has found that 42% of the mining sector is more optimistic about revenue growth in the next 12 months compared to the last. More importantly, almost half of the survey’s respondents are suppliers to the mining industry, including equipment, such as cranes, and other services.
However, 48% of respondents report that their biggest concern for the near future is the difficulty of forecasting, planning and investing due to continued market uncertainty, and 27% are concerned about working to, or shaping, new business models. Falling demand in core markets is a concern for 43%.
David Potter, managing director of Australian Crane and Machinery (ACM), says the Australian crawler crane market need not be unduly concerned as it is ideally placed to benefit from increased demand for minerals, particularly from ongoing growth in the Chinese economy, as Australia has a massive natural resource reserve to call on. “You name it, we have it; gas, coal, iron ore, aluminium and a few thousand sheep.”
Potter says that there is “some considerably large light at the end of the tunnel” thanks to new projects and contracts coming on stream, including the AUD50bn Gorgon gas project in Western Australia and the expansion of BHP Billiton’s Olympic Dam mine in South Australia. Olympic Dam is a multi mineral ore body. It is the world’s fourth largest remaining copper deposit, fifth largest gold deposit and the largest uranium deposit. It also contains significant quantities of silver.
The expansion of the Olympic Dam mine will require additional port developments and upgrades, coupled with new infrastructure to support these projects, says Potter.
“Cycles come and cycles go and a lot of us have experienced downturns in the past,” says Potter. “But like a cork in water, sooner or later it will be back on top.
So is ACM optimistic about the future? “Yes we are,” says Potter. “We consider that the really rough patch is behind us and now look forward to fine tuning our business for the future.”
Potter is not the only one confident for the future. Further results from ICD Research’s survey of the global mining industry finds that nearly half of respondents expect the recovery to come in 2010-26% predicting the first half and 22% predicting the second half.
BPH’s Graham Booth also reiterates his company’s commitment to the future. “You have to have confidence in the market to return to invest and to be there when there is an upturn, which is what we’ve been doing.”
