Booming Emirates

The United Arab Emirates is one of the world’s busiest construction markets, with a reported $300 billion of live construction projects. Claims that 30% of the world’s tower cranes are now in the UAE are wild exaggerations. David Semple, general manager of Manitowoc Crane Group Middle East, based in Dubai, reckons there are only in the region of 1,200 tower cranes in the UAE (he estimates 800 in Dubai, 250 in Abu Dhabi and 150 in Sharjah and other Emirates). For comparison, this is less than the tower crane population of the UK, where there are about 1,500 units.

However, the UK is three times the size of the UAE (which is slightly smaller than the US state of Maine) and has more than 20 times as many inhabitants, although the UAE’s population is growing very rapidly.

In this context, it is indeed a large crane population. Dubai can stake a credible claim to have the most dense population of tower cranes, since they appear to be mostly packed along a relatively short stretch of the Sheik Zayed Highway, the major artery into and out of the city. Ten years ago, the drive from Dubai to Abu Dhabi consisted mostly of desert. Now ribbon development has expanded Dubai City beyond all imagination.

According to US business information service Rundt’s Intelligence, in August 2006 there were more than 215 skyscrapers under construction in Dubai and licenses had been issued for a further 180 residential towers to be built.

Getting around the increasingly congested city will become easier once the first section of the 70km Dubai Metro begins operations, scheduled for 2009. Construction on the $3.4bn project began last year by a Japanese-led contracting consortium. Part of the network will be underground and part will be on elevated track.

Other ongoing mega construction projects in Dubai include the three Palm Islands (artificial islands in the shape of palm trees with luxury hotels and accommodation) and the World Islands, which replicates a map of the world in the sea, with 300 man-made islands of varying shapes and size, each designed to resemble a scale version of an actual natural land mass. Both of these projects are being developed by Nakheel Corporation. Equally ambitious is the Emaar Properties’ Burj Dubai Downtown development, a $20bn project that includes what is planned to be the world tallest building and world’s biggest shopping mall, as well as a business district, a residential development, a hotel, man-made lakes, landscaped parks and gardens.

With construction of the skyscraper, the Burj Dubai, now at full speed, Emaar says that the total development is the world’s biggest construction site, with 105 tower cranes and more than 20,000 workers. Work was disrupted earlier in the year by industrial action. Conditions for Dubai’s labour force, coming mostly from the Indian subcontinent, are very poor by Western standards and so is their pay. It seems to be an issue that the authorities are slowly having to address.

Some 3,000 of the workforce is on the Burj Dubai itself, which in early September reach the 70th storey and about 250 metres in height, with a new floor being added every three days. The exact final height of the Burj Dubai is being kept under wraps, so as not to be pipped to the world record by one of the other contenders in development around the world. However, it will be more than 800 metres. Main contractor for the tower is Samsung of South Korea, under a $900m contract, scheduled for completion in 2008.

The heights of skyscrapers like these are testing the technical limits of tower crane manufacturers, says David Semple, who joined Manitowoc through the Potain acquisition. “We are regularly challenged on the ability of our tower cranes to go very high,” he says. The Burj Dubai required cranes that can lift 18t at 20m radius to a height of 600m.

For electric powered cranes, apart from winch winding capacity and speed, comes the issue of getting the power supply to such a height with no loss of current. For heights up to 400m it can be overcome by using bigger section of cable. For the Burj Dubai, Potain offered a solution to place a generator set halfway up the building rather than on the ground; or to use high voltage power supply up to the crane slewing part.

The Burj Dubai contractors shunned this option, however, in favour of diesel-hydraulic Favelle Favco luffers. There are on three on the building, a 380D, a 440D, and a 760D. The largest of these, the 760D, can lift a maximum of 64t and lift 12t at 60m radius. It can hoist at a speed of 160m/min. These are the same type of cranes that are currently building the Shanghai World Financial Centre in China and were also used to build the Burj Al Arab in Dubai, the world’s tallest hotel, as well as the Petronas Towers in Kuala Lumpur in Malaysia. While the benefit of speed and power makes them a popular choice on skyscrapers, the downside of diesel-hydraulics is that the diesel has to be lifted all the way up there for refuelling and engine maintenance is required at height.

Despite the concentrated forest of tower cranes in Dubai, it is not as big a market for new tower cranes as might be imagined. Many came in as used equipment; and an increasing number of the new ones come from Chinese manufacturers. Despite this, Western producers have still benefited from a significant growth in demand for new cranes. In 2002 Potain sold just 13 tower cranes in 2002 across the whole of the Middle East, and 35 in 2003. Last year it sold more than 130 and this year expects to sell 200 or more. It does not declare how many of these went to the UAE, but David Semple confirms that the UAE, along with Turkey, is its largest market in the region.

Fewer than half the tower cranes in the UAE, Semple estimates, are directly owned by contractors. When the construction market slowed in the late 1990s, many contractors began renting cranes instead. Three major rental companies developed their fleets in response. The Potain distributor, Nouman Fouad Trading (NFT), started renting machines in 1997 with a fleet of 30 cranes. It grew steadily to 180 units by 2003 and today has approximately 250 units. One might expect that it would have grown more, except there has been a return to contractors buying their own equipment again, confident that the work will continue for such assets. Close behind NFT is Modern Emirates Heavy Cranes, which has built up a fleet in the region of 200 units, mostly used Liebherrs.

The third major tower crane rental company is Al Rana, operating out of Sharjah. It has been buying Chinese cranes and is believed to own more than 70 units.

Semple says that there is a trend in the region for contractors to purchase a tower crane of a standard height and then rent additional mast sections when extra height is needed. This has led tower crane rental companies to invest in tens of kilometers of mast section for hire, he says.

Mobile cranes

The Tadano distributor, Al Hamid Group, estimates that the total mobile crane population across the UAE may be in the region of 3,000 units. However, it is not enough and demand outstrips supply, possibly by as much as two to one currently. Most distributors report that they could have sold double what they actually sold last year, if only more equipment had been made available by the factory.

While demand for tower cranes in the UAE appears to be met with the help of the used equipment market and Chinese producers, the same cannot be said for mobile cranes. Though sales of new mobile cranes have increased significantly over the past couple of years, actual demand is even greater and buyers are frustrated by long lead times, just like the rest of the world. In the late 1990s mobile crane sales in the UAE averaged around 70 units a year before falling back to fewer than 30 in 2000. Last year 130 new cranes were delivered to the UAE, excluding those from China, which may have numbered several dozen. This year the total is expected to reach 200 units. Approximately two out of every three new crane shipped to the UAE is a rough terrain model, with Tadano of Japan the clearly preferred brand. The remainder are increasingly all terrain rather than truck-mounted models.

The two biggest buyers this year have been Al Faris, Dubai’s leading mobile crane rental company, and Ejar, a new rental company being set up by a consortium of companies led by the international contractor CCC.

A total of 25 Liebherr all terrains and 35 Tadano RTs have been purchased by Al Faris for delivery between January 2006 and March 2007. This will take its total fleet to close to 300 units. The Liebherr order includes 10 of the new 200 tonners and 10 of the 90 tonners. Al Faris will also take the first unit of Liebherr’s upcoming 1,000t capacity mobile crane with its record-breaking 100m telescopic boom. Managing director HW Pinto says that this crane, in Al Faris colours, will be displayed at Bauma in Germany next year, prior to shipment. Al Faris already has three Liebherr telescopic 500 tonners and finds jobs where even these, with their 84m booms, are not big enough.

Al Faris has also moved into crawlers in response to customer requests. It started with two Liebherr LR1280s and now has an LR 1400 on order, as well as the LTR 1100 telescopic crawler, which will be a new concept for the Emirates.

Al Faris is also investing in the new Robway safety system and data logger, which is being fitted to all new and old cranes and a cost of $10,000 a crane.

Other major rental companies have also grown their fleets significantly in the past couple of years.

Johnson Arabia, a Dubai-based joint venture between Johnson Crane Hire of South Africa and the Grove distributor Kanoo Machinery, has grown from 35 cranes in 2004 to approximately 100.

Sarilar, a Turkish crane hire company, has also built up its Dubai subsidiary since setting up in 2002. It began by competing at the bottom of the market with the hundreds of owner-operators that ply their trade with beaten-up old Japanese truck cranes for a few dirhams a lift, usually below the radar of industry regulations. However, Sarilar has since established itself as a front-line player on the tender lists of major contractors and refineries. Sarilar’s fleet in Dubai comprises mobile cranes up to 800t capacity (Liebherr LTM 1800) and crawlers up to 350t (Leibherr LR 1350).

Sarilar’s growth in Dubai was led by managing director Eskani Rasool, formerly of Masters Crane Hire in Sharjah. This summer, however, Rasool left Sarilar to join Santos Crane, a new operation set up by his family. Santos has 16 cranes already, with a further eight on order.

Al Jaber, based in Abu Dhabi, has grown its fleet of wheeled mobiles from 122 units in mid-2004 to 188 by mid-2006. It placed a 20-crane order with Rigo of Italy earlier this year.

Over the same period Al Jaber has doubled the size of its crawler fleet to more than 100 units. As previously reported in Cranes Today, in March it placed a multi-million dollar order for 40 new Hitachi Sumitomo crawlers ranging from the 70t class SCX 700 to the 250t class SCX 2500-2.

Al Jaber has established itself as a world-class heavy lifting company. It was an early owner of the 1,600t capacity Demag CC 8800 crawler crane and has another on order. It has also worked with Terex-Demag on the specification of an innovative new machine – a twin boomed version of the CC 8800, which doubles the lifting capacity to 3,200t. This machine is scheduled for delivery next year.

Abu Dhabi next

Despite the continuing construction boom in Dubai, there is a general perception that the market is beginning to come to an end. The 29% growth in construction, as reported by Dubai’s Department of Economic Development, is not expected to be repeated in 2007. However, the crane salesmen are not despairing. Far from it. Abu Dhabi is primed to take over as the UAE’s major construction market, with $1.5 trillion of identified infrastructure projects waiting to be signed, according to reports. Much of this is oil and gas related, but there is also a huge amount of commercial and industrial construction as part of a drive to diversify the economy.

A study published in January 2006 by the Abu Dhabi National Exhibitions Company reported that there was more than $10bn of ongoing construction projects in roads, airports, and industrial, commercial and residential developments. This has been spurred in part by the easing of restrictions on property ownership. Spectacular luxury schemes to rival those of Dubai are now planned for Abu Dhabi.

The value of new construction projects in Abu Dhabi in 2006 is expected to be approximately $6.3bn, up from $2.3bn in 2005. In 2007 a further $6.7bn of new tenders are expected to be awarded.

According to the Abu Dhabi Department of Economy & Planning, more than $100bn will be invested over the next four to five years on major projects, including a new airport, a new sea port and mixed use developments. Over the next ten years, approximately 100 new hotels are planned, at a rate of ten a year.

With such incredible numbers, the UAE will remain one of the world’s most exciting construction markets for the foreseeable future. Little wonder, therefore, that the Arabian Peninsular has been selected as the partner region for Bauma 2007 by the German engineering federation, VDMA.

Crane manufacturers are gearing up to improve their ability to support a market that has moved from being predominantly a used crane market to a sophisticated consumer of the very newest machines on offer.

Liebherr has built a new large facility in the Jebel Ali Free Port zone in Dubai with factory engineers on hand to offer full service back-up. Manitowoc Crane Group is opening a similar facility next year just a stone’s throw away.