Ask a crane manufacturer about Latin America and hear the voice rise slightly. The region is widely regarded as a potential goldmine by the manufacturers. There are power plants to be built, huge mining jobs and major construction projects planned over the next couple of years that will need cranes. The problem, across much of the region, is economic and political instability.
In spite of that, rough terrain crane manufacturers report satisfactory sales in the past year or two. RTs are the backbone of construction, mining and power plant projects, and the unit cost is lower than for truck or all-terrain cranes of similar lifting capacities.
As with North America, among the crane rental companies there is a growing trend towards using European ATs in preference to truck cranes. This trend is at an early stage, however, and most still opt for used truck cranes from the USA. These buyers tend to regard ATs as too expensive and too complicated. Change is definitely happening, though.
Unsurprisingly, the US manufacturers have the strongest foothold in Latin America. Grove is actively ‘increasing presence’ in the region, according to marketing director John Bittner. ‘You could say we are defending our home turf,’ he says.
In Mexico Grove is setting up a new training facility and support centre. ‘We can do a lot of business there in the future,’ Bittner believes. Grove tailors its cranes for these markets by offering Spanish language manuals and having the LMI program in Spanish.
Kyle Nape is Grove’s sales director for Latin America. He thinks that the region is a key market for Grove in the future. Nape says that the new E series rough terrain cranes are selling well in Mexico and Puerto Rico and strong RT sales have also been recorded in Brazil and Chile.
Nape also reports that the attitude towards all-terrain cranes is changing. ‘More and more rental companies are looking at them as a necessary alternative,’ he says. In fact, he thinks that ATs have already lost their image of being too complicated, and says that Grove’s AT sales are rising in Mexico, Brazil, Venezuela and Puerto Rico.
Grove has appointed a new agent for Chile, Sermatec, and is recruiting staff for positions in Latin America.
Link-Belt has also recorded ‘good, steady sales’ in northern parts of Latin America, says Corey Rogers, the manufacturer’s sales director for the region. Rogers says that Mexico and Puerto Rico are Link-Belt’s strongest markets there, with the RTC-8040 II and RTC-8050 II the best selling models. The 70 US ton rated HTC-8670 truck crane has sold well in Puerto Rico, he says.
One of the reasons for recent success in Mexico is a change in the dealership. Link-Belt’s previous dealer, Mextrac, was bought last year by Madisa, a major Caterpillar distributor in Mexico with nationwide coverage, which helps Link-Belt, Rogers says.
The same situation has occurred in Argentina, with a change in dealership from Ameco to Macrosa, another Cat dealer with greater coverage. Rogers thinks that Argentina as a market for Link-Belt cranes ‘is getting better and our new dealer will help that’. Link-Belt is having less success in Brazil than some of its competitors but Rogers believes it will improve for Link-Belt in the next year.
While most manufacturers talk of the potential of Latin America as a market for new cranes, Terex believes that it is already exploiting it. ‘It is an excellent market for us,’ says sales director Uri Toudjarov. He claims that Terex sold 30 RTs to companies in Brazil in the first six months of this year, representing 90% market share of new RTs.
Toudjarov continues: ‘We had to convince Brazilian companies that RTs were the way to go instead of all-terrains. They soon realised that they could pay half the price for a machine that does the job just as well, if not better.’ Toudjarov also reports orders for RTs from Argentina and Chile. He thinks that the economy in Latin America is ‘about two years behind the US’ and moving along quite slowly. He is confident though, that the market will pick up with major projects and mining jobs that are due to start at the end of this year and at the beginning of 2002. ‘We can see some very big things happening because of this,’ he says confidently.
While there is growing enthusiasm for ATs in many Latin American countries, it remains a challenging region for Demag and Liebherr, particularly with the ready availability of used equipment.
Walter Söth, Demag’s sales manager for Latin America, says that Demag has sold two AC 120s (120t) and an AC 300 (300t) to companies in Mexico. Söth thinks that the market in Mexico is good but is concerned that the bigger projects in the country have been put on hold because of funding difficulties.
Söth takes hope from the investment needed in the region, particularly in the larger economies. ‘Brazil and Mexico have to drastically increase the electric power supply and lay new gas pipes,’ he says.
Demag has sold seven units to Brazilian customers this year, and a further seven to Venezuela. Söth says that both markets are good, but that Venezuela is starting to decline.
Brazil is also Liebherr’s strongest market in the region for ATs, according to Wolfgang Beringer, sales director at Liebherr-Werk Ehingen.
Of the other countries in the region, Söth says: ‘Only sporadic business can be expected because they still work with old cranes.’
Junk from the north
The main problem that all the manufacturers are reporting, however, is an oversupply of used cranes in Latin America. Efren Gil, managing director of Mexican crane rental company Gruas Monterrey says that there is ‘far too much old junk from the USA’ flooding the marketplace.
Wolfgang Beringer agrees that the volume of used equipment from the North is suppressing demand for new cranes. He remains optimistic, however. ‘The market is changing,’ he says. ‘This year it is going up.’ Latin America is still being talked up as one of the coming regions of the world, but while there is clearly a market for new cranes in the stronger countries, the picture is one of only gradual development.
