Hong Kong is a place of contradictions. It is so busy and bustling that it seems at first to be chaotic, yet its public transport system is unrivalled anywhere in the world and its ability to keep its construction industry engaged on a steady sequence of infrastructure projects is testimony to rigorous organisational discipline. As one big project comes to end, it seems, there is another starting up to take its place.

Today, the structures of the West Rail extension of the Mass Transit Railway are now completed and the track is being laid, so groundworks on the Kowloon Canton Rail Corporation’s East Rail extension are now underway. And as one 420m-high office block progresses towards top-out by Central Station, foundation work begins on a 490m-high, 100-storey building at Kowloon Station. Then there is the Disneyland theme park being built on a 158ha site on Lantau Island. Three years of land reclamation began in May 2000 and infrastructure works have now begun.

The downturn in crane activity in most of the Asia Pacific region remains acute, with a second dip in 2001 because of the continuing problems among the Japanese banks that used to fund so much private sector construction. In Hong Kong, however, there is still much work to be had as construction continues frenetically.

The problem is that although there are big projects, they are not as big as the massive works associated with the construction of Chep Lap Kok airport on Lantau Island in the 1990s (which included the Tsing Ma suspension bridge and Kap Shui Mun cable stay). Overall, construction output is down about 20% on what it was in 1997 before the financial crisis. There is still an active crane industry in Hong Kong, but there is a restructuring taking place and rates are down.


As ever, it is one thing finding work for your cranes if you are in the rental business, but it is quite another thing to make money out of it. While utilisation is important to cashflow, rates are the key to profitability. Before 1997 in Hong Kong a 100t crawler crane without an operator could be hired out for HK$160-170,000 a month ($20-22,000). Today HK$140-150,000 a month ($18-19,000) ‘is a good price for us now’, says Martin Tse, assistant general manager of Proficiency Equipment.. A more realistic price, say others, is HK$100,000 ($12,800).

The daily rental rate of a 50t truck crane today is about HK$2,500 ($320), compared with HK$3,500 ($450) in 1996/97.


Frank Chan, director of Continental Equipment, estimates that there are about 500 crawler cranes in Hong Kong, of which 50% are probably still under finance, making them less than five years old if bought new, or three years old if bought second hand.

The only sales of any volume in Hong Kong over the past three years have been crawler cranes for foundation work. Japanese cranes from IHI, Hitachi and Nissha are a common sight there but the preferred cranes seem to be Liebherrs and Kobelcos. Kobelco’s fortunes are traditionally tied to those of its biggest customer, the contractor Gammon. Liebherr has a wider customer base.

Kobelco’s crane sales in 1999 and 2000 were not helped by Gammon’s failure to win any contracts on the West Rail extension. Contractors from neighbouring Asian countries such as Korea, with little or no work at home, bid for Hong Kong contracts with prices that local companies could not match. Sales of new foundation cranes went the way of Liebherr, assisted by favourable exchange rates which made them 75% the price of the Kobelcos, according to Kobelco’s chief representative in Hong Kong, Shigeki Kikuch (although others report that Liebherrs are still more expensive). In 1999 and 2000 Gammon bought no cranes, and so Kobelco sold no cranes. Liebherr, in contrast, had ‘an excellent 2000,’ according to Gerhard Frainer, managing director of Liebherr (HKG).

Gammon has, however, won work on the East Rail extension and so 2001 was a different story. Kobelco claimed about 80% of all sales, selling 16 units of the BM series to Gammon, plus two or three to other customers. The Gammon sales were made directly by Kobelco at a time when it was reorganising its distribution. Jardine Engineering, a sister company of Gammon, used to be Kobelco’s exclusive dealer but last year Shriro was also made a dealer. Shriro sold two 7090s and two of the Japanese version 7080/2s, to Chim Kee and to Tapbo Civil Engineering.

‘The Kobelco agency is very important for us,’ says Albert Yu, joint managing director of Shriro. Shriro is also Liebherr’s dealer for mobile and tower cranes. ‘We have tower cranes, mobile cranes, and now crawler cranes,’ Yu adds.

There is a widespread perception among customers, rightly or wrongly, that Liebherr crawlers are better for foundation work while Kobelcos are better for lifting and general duties. Both Proficiency Equipment, a rental company with 16 crawlers, and its majority shareholder Tysan, a foundation contractor with more than 30 cranes, both favour Liebherr for foundation applications, according to Proficiency general manager Martin Tse. ‘They can provide bigger winch capacity on single line pull,’ he says.

Liebherr claims to have sold a total of 270 units in Hong Kong, all but one of which were from its HS series of duty cycle machines. Its best seller in Hong Kong is the 120t rated HS 883 HD, which is liked for large diameter piling work.

The foundation crane market in Hong Kong it is going through changes. Since the so-called ‘short pile scandal’ of the late 1990s, when high rise buildings were torn down after it was discovered that contractors had put in piles that failed to reach all the way down to hard rock, driven H piles are specified on Housing Authority projects rather than bored piles. A lot of companies went out off business in the wake of the scandal as payment chains were blocked. Another side effect was that in 2000 some 128 Japanese-built used pile drivers were imported into Hong Kong. Engineers generally regard driving H piles as an old-fashioned solution, but it has the merit of being harder to cheat on workload.

In most Hong Kong fleets the biggest crawler crane is likely to be a 150t Kobelco BM 7150. Albert Yu reckons there are only about six or seven 200t crawlers in Hong Kong. Gammon has two 7200s, rated at 200t, and it is likely that demand for this size of crane will increase. Ultramill has ordered a 7200 to rent to contractor Hyundai on the Container Terminal 9 project, and in November 2001 Continental took delivery of a new 200t Sumitomo SC 2000-3 Pax from distributor Tat Hong. Yu believes that demand will grow for the bigger machines and there will soon be 250t machines working on foundations.

For all the activity of foundation contractors, this does not make it a good rental market. Contractors have enough work for their own machines but not quite enough to use up those offered for rent. A visit to Tat Hong’s yard in the New Territories, for example, reveals that nearly half of its 50-unit fleet there is idle.

Wheeled mobiles

Some believe that the only crane companies making money in Hong Kong today are the bigger mobile crane companies, such as Sunshine, Lik Ying and Chim Kee.

Sunshine managing director Kenneth Kwok agrees, He has 15 crawlers, mainly Kobelcos of 50t to 150t, but says this market is down. He is making his money from his 47 mobile cranes and is looking to buy five more mobiles in the 100t to 150t range. ‘In this range it is easy to mobilise and you can find work for them,’ Kwok says.

What demand there is for new mobile cranes in Hong Kong seems to be for the bigger machines, but even here demand is down. Shriro, the Liebherr dealer, sold one new mobile crane this year, an LTM 1160/2 all-terrain to Kam Tong. In 2000 it also sold only one unit – an LTM 1500 to Lik Hung/Kanson, the biggest wheeled mobile in Hong Kong. In 1997, in contrast, Shiro sold five Liebherr all-terrains.

Yu says that he has lost out on a couple of 300t sales to Demag in recent times – one to Sunshine and one to Kam Lee – because the customers were concerned about the way the operator’s cab on the LTM 1300 stows away to the rear when travelling. ‘They are our customers,’ says Yu, ‘but they couldn’t be persuaded that the cab on the back corner wouldn’t hit buildings when turning.’

The new 250t-rated LTM 1250/1 has the operators cab at midway along the crane, because there is only one cylinder under the boom. Shriro has two sales under negotiation, Yu reveals.

Demag also sold an AC 200 to Kam Tong last year and a used AC 155 (50t) to the same customer in a bid to promote the concept of the German all-terrain over less expensive Japanese truck cranes in lower capacities.

Up until about 1994, says Henry Luk, managing director of Tadano South China, the Hong Kong market was mostly truck cranes of 25t, 30t and 50t capacity. A few 70t to 130t cranes would come in used from Europe, he says. By 1997 the 25t to 50t market was saturated and sales dried up. Buyers began taking 160t to 300t machines – or bigger, in the case of Lik Hung, although Luk estimates that there are no more than 25 units in Hong Kong of 100t capacity or above. Tadano’s big Japanese-built mobiles cannot compete for price with the German manufacturers, Luk says.

‘Today we are waiting for the market to digest the old cranes, and waiting for the market to turn up,’ Luk says.