At this year’s CICA, the delegates and exhibitors all agreed that the mining industry would remain vital to Australia’s economy and lifting industry.
Anthony Lazenby is managing director of WATM. His company sells a range of equipment, including Manitowoc mobile and crawler cranes, and Hiab knucklebooms. He says, "Our Western Australian business heavily benefits off the mining industry, particularly iron ore and energy. It’s all based aorund the commodity price [see table overleaf]. As long as the commodity price keeps up, things will keep going.
"Mining’s strong, but manufacturing, toursim and all the rest, are really flat. Retail is exceptionally flat. If iron ore stays up, FMG (Fortescue Metals Group), BHP Billtion, RioTinto, Atlas Iron, and a couple of other juniors, will keep going. When the other Asian economies come on stream, they’ll take up some of the slack from China."
Mark O’Donoghue is managing director of Finlease. His business arranges finance for capital intensive private businesses, like crane firms. He says that, when dealing with companies with expensive assets, but small administrative staffs, he aims to act as an advocate.
O’Donoghue has seen the impact resources extraction has had on the Australian industry. "Quite a number of our customers are in mining services and related industries. They might be doing shutdowns, they might be doing rectification work, or they might be doing prep work.
"There’s a lot of infrastructure work being done, there’s a lot of cranes in that civil area. We’ve had a bit of a hiatus for the last three-to-four years on construction development, and that’s started to open up now, so we’ve started to see an increase in the number of projects coming on line.
"Part of that was basically stymied by shortage of supply in funds. Banks were seeing construction finances as a little high risk. When it’s cold, your blood goes to your core organs, and when there’s not a great supply of money, it goes to the core areas. Where we’re starting to see a loosening up of construction finance, that will drive a fair amount of crane work in its place. As well, we’ve talked about the normal infrastructure, like roads and refurbishment of wharves.
"When you look at the numbers, there’s $137bn in slated projects due to go ahead, from coal seam gas, through to major projects being set up, like Gorgon. There’s also a lot going on in our energy space, whether that’s wind farms, desalination plants, additional transmission, solar, there’s craneage in that area as well.
"I think you can’t underestimate the knock on effect of things like resources. When you look at some of our regional towns, the mining produces the oxygen, the workforce and the revenues for the workforce, and then the community benefits."
The dominance of resources can leave local economies, and crane hirers, hostages to fortune. Marc Sergi is managing director of WGC Cranes. The Wollongong-based wet hire [rental with operator] firm saw its growth threatened by changes at local steel company BlueScope’s Port Kembla plant.
Sergi says, "The Wollongong area is really based around steel works. BlueScope steel in Port Kembla shut down one of their blast furnaces, which had a big roll on effect on all the welding shops, so that prompted our focus change. We want to keep our presence there, but we want to look a bit further afield to diversify more.
"BlueScope used to be like the mining industry is now, so if you’re in the mines now, you’re comfortable, you don’t need to look for anything else, but when it starts to slow down, that’s when [you have to make changes]."
Sergi’s response was to bring in Rob McInnes to set up a dry hire [equipment-only] business. McInnes says, "In the last 12 months we’ve looked more to national projects. We’ve gone from having cranes in Sydney and Wollongong, to having machines in North Queensland, Newcastle, and Western Australia.
"At the moment, all of the work outside the local area is dry hire, but we’ve also put tenders to a couple of clients for fly out work. So, we’ve got half an eye on that, but it’s not our main focus. If the right project comes up, we’ll send crews in and out.
"The dry hire work is on a lot of coal and LNG terminals, predominantly they’re for a minimum of 12 months, and sometimes roll into 24 months or longer."
By looking to the rest of the country for dry hire work, Sergi and McInnes have found work for four new crawlers and a new all terrain, bring the WGC Cranes fleet up to 30 cranes. Sergi says, "There’s a few jobs coming up in our area, our work hasn’t dropped off, and every year we’ve seen it grow by a couple more cranes, but to maintain our expansion, that’s through the dry hire."
The resources focus of the Australian economy, and the country’s vast scale, presents challenges and opportunities for manufacturers. David White is sales manager for Tadano Oceania. The Tadano subsidiary was established in 2011 to allow the Japanese manufacturer to sell into the region directly.
White says, "We started just over two years ago in Brisbane. We’re now in Brisbane, WA, we’ve opened a branch in Sydney, a small branch, but a branch all the same, and we’re about to open up in Karratha, in North Western Australia up in the mining district, the oil and gas is enormous. Gorgon is just off the coast, and there’s a lot of iron ore mines in from Karratha.
"It’s an expensive place to be. That’s what the mining industry does to a place, it makes things terribly expensive, but we decided it’s an important place for us to be. I don’t think any of the other manufacturers are there, as a dedicated crane facility."
Chicago Bridge & Iron Company (CBI) are the lead contractor on Gorgon and a Tadano client, White explains. "We’ve managed to successfully get a lot of cranes into the Gorgon project. CBI are a very big supporter of Tadano. One of our promises to CBI in the first place was that we would open a branch there.
"Service is always an issue, because of the size of the place. To drive your car from Perth to Karratha, still in one state, would take two days or more, so that in itself is the biggest challenge in Australia. Tadano is developing the product too, so some of our models can be investigated via the internet. That’ll help us in Australia. As far as our growth in Australia and our support in Australia, that’s the hardest part, the distance involved."
Troy Hand is director of B&N Crane Cranes. The company is a dealer for Kobelco and Robway, and offers a range of services from repairs through to 10-year major inspections. He agrees that datalogging has a vital role to play in a market like Australia. He says "We’ve been extremely busy. When we first started in 2003, we were just kicking off with three blokes, now there are 15. We do a lot of work with coal mines, general repairs for taxi hire type machinery, and obviously oil and gas.
"Datalogging’s getting big too. From there, you’ll be able to take that information, see what the machine has actually done, and ask, ‘Why do I have to strip it down at ten years?’. And the opposite, you can say, ‘Your machine’s done that much work, here’s where you should be looking for cracking.’"
Tadano saw a lot of success in the 2000s with its GT550 truck crane, selling as many as 150 units. However, with increasingly tight engine emissions standards, the crane, based largely on Nissan components, was no longer suitable for the market. At CICA, Tadano showed the GT600, a new 60t truck crane based around speciallydesigned components.
White says, "The GT600 arrived for us about May, and since then, we sold six units. For a new product that’s excellent.
"It’s meant a bit of effort, because there was such a long time gap between the GT550 and the GT600, up to four years. At the same time we had this gap, was when the Chinese cranes started to try and make headway in Australia, so it’s taken us a little bit of effort now to reintroduce them."
Tadano is by no means the only truck crane manufacturer in the market. With the Japanese manufacturer out of the market, Ben Baden, son of G M Baden founder Gerhard Baden, saw the opportunity to bring Link-Belt truck cranes to the country. Now, working with brother-in-law Anthony Davis in a new business, Crane Connection, he is seeing good sales for Link-Belt’s high capacity, 70-85t truck cranes. These cranes, Baden says, offer the company an edge over other truck crane manufacturers.
Brook Logan, of Gleason Cranes, also sees an opportunity for truck crane imports. His firm, however, is taking a different route, bringing in cranes from Zoomlion. He says, "We’ve had the deal with Zoomlion for around 18 months, they’ve been going quite well. We’ve got a full range, truck cranes all the way from 25t up to 50t. [At CICA we have] the first 30t right hand drive, we drove it from Melbourne to Adelaide for the show.
"We’ve sold the truck cranes to the regional centres. Crawler cranes, we’ve sold mainly to North Queensland. They use them for all different things: we’ve got one on a barge at the moment; others are just doing general construciton work."
While mining and other resources will continue to dominate, Finlease’s O’Donoghue still sees need for more residential construction. "We are something like 132,000 homes short of supply, so, our supply demand curve around housing in Australia is way under." With many predicting mining and energy demand will continue, and latent demand for homes, Australia’s industry will continue to grow.
