Not long ago, images of tower cranes standing proudly among buildings under construction were a familiar symbol of Soviet propaganda. The government boasted of the efficiency with which it was building new housing and cranes were a potent symbol of its success.

Then came industrial recession in the 1990s which affected Russia and the other former Soviet republics, as did the demilitarisation of the economy. In addition, there was an over-production of cranes during the last years of the USSR. According to some estimates, by the early 1990s Russian industrial enterprises had an inventory of new and unused cranes amounting to annual crane output.

Today the crane is a rare sight in Russia. Many construction sites have been left empty – reminders of ambitious projects abandoned in hard times. With construction and heavy industry at a standstill, most of Russia’s crane factories are idle.

Tower cranes

Perhaps the most graphic illustration of this decline is the Russian tower crane market. In 1990, there were 2,526 tower cranes manufactured in Russia. By 1997 this had dropped to 31, a decrease in output of 98.7%.

Hit by a sharp drop in demand, many companies diversified into other products. These are now their main revenue earners. The Moscow-based Bakra company (former Severyanin plant), purchased by Germany’s Wirtgen in 1996, switched to production of road-construction machinery. The new products earned the company 90% of its revenue last year and it produced only nine cranes from 1998 to 1999. The St. Petersburg crane manufacturer, AO Mekhanicheski Zavod (mechanical plant), has been earning its money mainly through production of heating equipment. It produced eight cranes in 1998 and 14 cranes in 1999.

According to Bakra’s marketing department, the company’s crane business now relies on production of the KB-210 tower crane, used mostly by bridge builders. It has a load capacity of 10t, a 21m lift height and 2.5m to 30m jib length. Last year Bakra began a joint project with Liebherr and started production of the 180 EC-H10 high-rise slewing tower crane. Its price makes it inaccessible for most Russian construction companies. The price of a comparable crane produced by the Rzhev plant is about 66% lower. At present, Bakra will lease the 180 EC-H10 crane and it is hoping to receive orders from the Moscow City company, which is trying to implement an ambitious, but poorly financed, project to construct a large business centre in downtown Moscow. Bakra is also preparing for production of the KB-415 UHL crane, which will take advantage of Liebherr’s technical expertise. This crane will have a load capacity of 12t and 62m to 83m lifting height. It will be cheaper than a Liebherr crane, according to Bakra.

Bakra’s competitors say its crane production continues to decline, opening up opportunities for others. Hoping to find new niches are the Karacharovo plant (Moscow), Mekhanicheski Zavod (St. Petersburg) and the Rzhev crane plant (AO Vysota) which was formerly the largest enterprise in the Russian crane-building industry.

The Karacharovo plant, which specialises in elevator production, now produces several versions of the popular KB-504 crane (10t capacity, 39m to 92.6m lift height and 35m to 50m jib) and the KB-411 crane (5t to 10t capacity, 59m to 72.5m lift height and 25m to 50m jib). The St. Petersburg plant largely produces versions of the KB-503 crane (12.5t capacity, 53m to 73m lift height and 30m to 45m jib).

Moscow has about 3,000,000m2 of housing under construction annually and it is still the main market for tower crane manufacturers. According to Victor Tolstov, director of Mekhanicheski Zavod (St. Petersburg), his company has not been able to sell a single crane in its home city in the past 11 years. Most of its cranes were sold to customers in the Moscow region.

Despite poor sales, tower crane manufacturers are beginning to see light at the end of the tunnel. According to industry sources, the service life of many cranes currently in use in Russia will expire in 2000 through 2002. Construction companies will no longer be able to delay purchases of new machinery.

Mobile cranes

The market for mobile cranes responded to production growth in Russia faster than other markets. However, not all the companies managed to use the favourable conditions to increase their output. For instance, Ivanovo-based AO Avtokran, Russia’s largest manufacturer of truck cranes, began 1999 in bad shape. According to some sources, last summer the company was on the verge of bankruptcy and it had to reduce its output because of disruption of component supply. However, the company has managed to remain a leader in the market. According to the Russian State Statistics Committee, in the first 11 months of 1999 Avtokran produced 336 truck cranes, a 20% decline in production compared to the same period the previous year. Avtokran produced 479 truck cranes in 1998 and 1,123 truck cranes in 1997.

According to Yuri Maneshin, commercial director of the Ivanovskaya Marka company, which is Avtokran’s leading dealer, it has a huge amount of orders but demand exceeds supply. Avtokran is unlikely to meet this demand in the near future. According to Maneshin’s forecast, Avtokran will stabilise crane production at 900 to 1,000 cranes in 2000 and 2001. Such an output is still 82% lower than Avtokran’s 1985 output. He says Avtokran is preparing for the production of a new model with a load capacity of 50t on a chassis with improved cross-country capability (8X8 wheel arrangement).

Unlike its main competitor, the Galich Truck Crane Plant (Kostroma region) increased production of truck cranes by 47% to 228 units from January to November 1999. Controlled by the Kudesnik trading company, this market-orientated company has shown solid growth in the last year.

The Galich plant, which produced excavators until 1982, began major production of cranes in 1984. Since then it has been steadily widening the range of machinery it produces, increasing the load capacity of its cranes from 16t to 25t. In 1999 the Galich plant began production of a mounted manipulator for timber loading. The competition between the Galich plant and Avtokran is made more difficult by the Galich plant’s dependence on deliveries of turntables from Avtokran, which is now Russia’s monopoly producer of turntables.

The Balashikha Truck Mounted Crane Plant (Moscow Region) increased production threefold in 1999, according to Nikolai Tonyshev, the plant’s chief engineer. The previous year was the worst for the Balashikha plant, which produced only 65 cranes. In the Soviet era the plant produced about 2,500 cranes annually. At present, it makes several versions of its BAKM-890 with a load moment of 8.9tm and a 7m boom. Over the last two years, the Balashikha plant has produced cranes with load moments of 4.6tm and 12tm. It now plans to begin production of cranes with a load moment of 9tm and 16tm and load capacity of 0.6t and 1.1t respectively. Virtually all production is for the domestic market.

Another manufacturer of mobile cranes, AO Gazaks in the city of Kamyshin in the Kostroma region, was bought by one of Gazprom’s subsidiaries several years ago and is now mainly producing machinery for Russia’s monopoly gas supplier.

According to Vniistroidormash, a Russian state institute for construction machinery, Gazaks is now working on a 70t capacity crane. Gazaks produced 82 cranes in 1998, compared to 106 cranes in 1997. In the first 11 months of 1999 it made 55 cranes.

Overhead travelling cranes

Before its disintegration, the USSR was the world’s largest manufacturer of travelling cranes. Its annual output amounted to 6,500 units, which met 90% of the country’s demand. The State Planning Committee planned to increase travelling crane production to 10,000 cranes annually by the year 2000. Demand for new cranes was determined by the continuous stream of new plants in operation and, according to many observers, was artificially maintained by the socialist industrial product distribution system. Since the recession that has all changed.

“Production has hit the bottom and can’t drop any lower.” That is how Andrei Zertsalov, head of the Podyomtranstekhnika Association, characterises the situation in Russia’s travelling crane-building industry. The association was established along the lines of VNIIPTMash, a Russian crane-building research institute.

Production volumes have dropped to critical levels at many plants. The best example is the Moscow-based Krasny Metallist plant, where production fell from more than 30,000 hoists a year during the Soviet era to only several hundred hoists annually in the last few years. Many crane building enterprises lost professionals who went to other, better paying, jobs. For the same reason there are few young scientists in the crane building industry’s research institutes.

During the Soviet era, which was characterised by obsession with the division of labour, crane plants had a narrow specialisation. Each plant produced only a limited number of crane types. For instance, the Bureya-Kran plant (Amur region) specialised in the production of overhead travelling cranes with a load capacity of 5t and travelling gantry cranes with a load capacity of 6t, while the Komsomolsk-on-Amur crane plant (AO Podma, Khabarovsk territory) produced cranes with load capacities of 12t and 12.5t.

When central planning ceased to exist, most crane plants had to expand their ranges significantly in order to survive. For example, the Uzlovaya plant (AO Kran, Tula Region) produced an entire range of travelling cranes with capacities up to 50t. Sibtyazhmash, which previously specialised in producing super-heavy cranes (with load capacites of 500t and 1,000t), began to produce small capacity cranes (up to 5t). Located in the far east of Russia, the Bureya-Kran and Podma plants, tripled the range of machinery which they produced.

This diversification had both positive and negative effects. The positive side included the optimum use of standard units and parts and the ability to meet demand in the plant’s region, while the negative effects included duplication and excessive competition among crane manufacturers.

The market situation was worsened as former defence plants began manufacturing cranes. Small-scale production at plants with huge production capacity and the absence of a coherent marketing policy resulted in rising production costs and prices. In the mid-1990s prices for some types of domestically produced cranes equalled international prices and sometimes even exceeded them.

Revival

The rouble devaluation in August 1998 raised imported machinery prices on the domestic market, thus helping to revive production. Exporting companies, such as Kaliningrad-based Baltkran (see box story) reaped the greatest benefits.

According to preliminary estimates, Russia’s industrial output grew by more than 8% in 1999. This growth caused an increase in demand for cranes and, as a consequence, increased crane production for some enterprises.