It has not always been cranes for the Galich Mobile Crane Plant in the Kostroma region. The plant was established in 1945 to repair tractors and trucks and to produce spare parts for agricultural machinery. In 1961 the plant began making excavators and had produced 36,332 of them by 1982 when the plant got the order to realign its production to hydraulic truck cranes.
Like most Russian crane manufacturers, the Galich Mobile Crane Plant was a small part of the massive industrial manufacturing sector of the former Soviet state which has now been largely privatised.
But unlike most, the Galich Mobile Crane Plant now has relatively solid financial control through Kudesnik, a trading company which is the biggest stakeholder and has five of seven seats on the board. Kudesnik aims to increase production levels and quality at the factory and to expand the range of Galichanin models, as the cranes of the Galich plant are known, says Yaroslav Sokolovsky, commercial director of Kudesnik.
In 1990 the plant produced almost 600 cranes, but by 1998 the recession saw that drop to below 200. Many of the cranes made in 1998 did not sell and went into stock. Historically, Russian buyers would only buy from readily-available stock, but with demand picking up in 1999 and the company’s stock cleaned out, customers are now more open to placing advance orders. All the cranes made at the plant within the past few months have been for orders 100% paid in advance, Sokolovsky says.
Another good sign for the plant is the number of customers starting to come back to experienced crane manufacturers, he says. Ten years ago there were fewer than 10 mobile crane manufacturers in the whole of Russia. But after the break-up of the USSR previous managers of the plants sold the design documents, which led to a huge number of crane makers.
The new plants were former machine engineering factories and military factories which had been left without regular orders. But the poor quality of cranes produced has meant that customers are now coming back to Galich and its more experienced competitors. While these ‘ad hoc’ crane factories still exist, they now make only a few cranes which are largely for barter or for reducing debt to their suppliers.
The Galich Mobile Crane Plant produces 11 models of mobile crane with capacities ranging from 15t to 25t. The Russian market tendency is for 15 to 25 tonners, but this year the plant plans to produce a 30t model, although Sokolovsky does not think it will be a big seller.
Last year the plant began producing the PL-95, a knuckle-boom loader crane designed for timber handling. Galich made 15 of these, but the market capacity is around 1,800 a year, which again illustrates the need for an increase in production capacity.
Nevertheless, Galich is still the second biggest mobile crane manufacturer, behind Avtokran. In the past six years it has supplied mobile cranes to the Kremlin Security Administration, the Central Bank of Russia, the Ministry of Finance, the Interior Affairs Ministry, Defence Ministry and Emergency State Ministry. Other major customers include the oil companies of Russia.
Export accounts for 5% to 10% of its cranes. Most exports are to other former Soviet countries and to Mongolia and Vietnam. Recently the company concluded contracts for export of 28 cranes to Iraq, says Sokolovsky.
The prices for Galich’s cranes in export markets are higher than in Russia. This is not because of the cost of transporting them to overseas customers, but largely because Russian customers are simply not interested in paying for any guarantees or warranties – they just want the bare crane with no strings or additional costs attached.
However, the cranes are still very low priced, says Sokolovsky, with distributors able to make anything from 20% to 100% on every crane. “Therefore we have very optimistic plans to enter other countries’ markets,” he says.
Last year Galich sold two cranes to Verschoor Kranen of the Netherlands. The Dutch crane trader says that the technology of the Russian cranes is too old for Western Europe, but they are suitable to sell or rent into Turkey or Greece. They are a good, solid crane for that market and do have reasonably modern features such as load moment indicators.
Because of demand for low priced cranes from local customers, Sokolovsky admits that Russian mobile cranes are inferior to western brands in relation to chart, fault-tolerance, durability and comfort. But for the export market he says Galich does have more resources, including Italian hydraulic products and high tensile steel to lighten structures.
“Also we are able to use various truck chassis with higher carrying capacity to mount the cranes,” he says.
