Chinese crawlers on verge of a boom

Over the last 20 years, China has been transformed from a poor, centralised and predominantly rural nation into the world’s next potential economic powerhouse. However, these changes have come at a cost, in terms of demand for energy.

Electricity demand is expected to increase 12.5%, to 3.18trn KWh in 2007, says the China Electricity Council. Last year, official statistics in the People’s Daily said the country increased power generation by 20.3% year-on-year to reach 622m kW. In 2007, the council expects installed capacity to increase by 14%.

Under the government’s current development plans, installed capacity will reach 800m kW by 2010. On the ground, these statistics are translating into flat-out power plant construction. In Guangdong, for example, supply was 4,500 mW short of demand in 2006. This year, the region will spend RMB25.1bn ($3.35bn) on 26 energy and power supply projects.

The demands of large power and transportation projects, often in rural regions, and major projects such as the Olympics, is making crawler cranes increasingly attractive to end users. The country’s manufacturers are approaching the task of meeting this demand from a small base.

At the China-Japan-Korea Asia Crane Safety Symposium in Beijing, held at the same time as BICES, Shen Yongming, secretary general of the hoist branch of the China Construction Machinery Association, presented figures showing Chinese manufacturers had sold more than 500 crawlers in 2006, up 111% on the previous year’s figure of 237 units. In the first half of this year 387 crawlers were sold, with around 775 units expected to be sold by the year end.

So far, Shen says, the country’s manufacturers have concentrated on smaller and mid-sized units, with 14 series covering capacities between 35t and 600t. This year though, the first 900t and 1600t units have been developed.

At BICES, Chinese interest in this sector was apparent. While the show was dominated by truck cranes (p17), the country’s most popular sector, many manufacturers were keen to demonstrate their investment in crawler production. The show offered a chance to see what is on offer, and the challenges the country’s manufacturers face.

Zoomlion is an established crawler manufacturer, with a market share last year of 6%. At BICES, the company was showing a 70t QUY70, with 57 maximum boom length. The company makes eight crawler models in all, ranging from 55t to 600t capacities. Cranes Today spoke to Wang Zhouzheng, the company’s Beijing sales manager.

Wang explained that the company sells crawlers in every province. Foreign markets are South America, South Asia and Middle East. January to October 2007 total sales for all Zoomlion crawlers were RMB600m ($80m). As well as power stations, demand for larger crawlers is coming from oil and gas refiners PetroChina and Sinopec. Other sources of demand are contractors, road construction, railways, oilfields, nuclear power stations and wind power.

Zoomlion expects to sell 300 units next year. Productivity is limited by component supply from foreign manufacturers, such as the hydraulics manufacturer Bosch-Rexroth. Boom steel is imported from SSAB in Sweden. Other imported components on the cranes are rope, engine, motor and valves. Because of the worldwide demand for these components, buyers can expect an eight-month wait for larger models: cranes ordered in October will arrive in July.

Foton Lovol Heavy Equipment makes tractors, wheel loaders and other agricultural, construction and road machines, based in Shandong Province, eastern China. Song Shengzhong, track cranes business department deputy manager, explained that since 2006, it has been researching the market for crawler cranes. It has seen that construction methods are changing. The government is emphasising rural construction, and the crawler market is developing rapidly.

The company has developed designs for 320t and 1,200t crawlers, and plans to make 500t, 600t and 800t models in future. Some users are demanding foreign parts and others are happy with Chinese. Shengzhong says Lovol is working on a long-term strategy for component supply with Japanese and European partners.

Tower crane manufacturer Fushun Yongmao (not to be confused with unrelated crawler builders Fushun Excavator Corp and Fushun Excavator Ltd) is also looking at a move into the crawler business. General manager Tian Ruo Nan told Cranes Today that the company has bought a new factory, in Fushun, which will be used to manufacture 55t and 80t crawlers.

Zhenchong Anli Engineering Machinery is a truck crane manufacturer based in Bengbu, Anhui Province, and has recently started manufacturing crawler cranes. The company has recently formed a joint venture with a private investor based in Yuejin to start a new 24,000 sq m crawler crane production facility in the city. The venture will be based on a 50:50 stock share, and will be called Tiandi.

The company's established factory produces around 1,000 truck cranes per year, and had built 860 by the time of BICES this year. The new Tiandi factory will make crawlers in the 50t–400t range. Zhang expects it to build around 200 units per year, starting in June 2008. The company plans to use local components on cranes with capacities up to 100t, and some parts will be manufactured by the firm itself. Motors will be bought from a local supplier, as is the boom material.

Initially, Tiandi will be selling only in China. However, Zhang said that once production is stable and the product is more established, it hopes to export.

Fushun Excavator Corp was China's biggest crawler manufacturer last year. Zhang Jian, assistant general manager of the sales department, told Cranes Today that the company expects crawler sales of RMB1bn in 2007, double its 2006 figures. Its most important product is a 50t crawler; 80t and heavy 250t crawlers lead its export sales. The company exports to India, the Middle East and North America.

Its largest current model is 350t capacity, and it has just completed the design of a 500t model, for sale in 2008.

For mid- and small-capacity crawlers, the company is using local components. For higher capacity crawlers, the company is using imported engines and hydraulics.

While the companies at BICES demonstrated that the Chinese crawler manufacturing base is broadening, one that was absent from the show demonstrated how the country is entering the heavier end of the market. Sany, last year’s third ranked Chinese crawler builder, has signed an agreement with Guangdong Power Engineering Corporation for a 900t-capacity crawler crane. This is the second agreement for 900t crawler crane for Sany.

Before this, Sany signed a deal with Shandong Electric Power Construction No.2 Company, for the same model. According to Sany, the first 900t crawler crane will be completed from the assembly line in December, and will be delivered to Shandong Electric Power Construction No.2 Company in March 2008 after completing a ‘type test’. Sany is now cooperating with Guangdong Power Engineering Corporation to develop an even larger 1,600t crawler.

Sany’s crawler crane market share in the the domestic market was 25.5% from January–August 2007. A Sany spokesman said its output is expected to reach RMB93m in 2007, and the firm hopes to achieve RMB1.8bn next year.

Currently, the company’s main focus is the domestic market for crawler cranes. But, according to comments from Sany overseas offices and dealers, Sany expects export to take half of its sales in 2008. This year, its crawler cranes were exported to South Korea, Singapore, India, the UK, Netherlands and China’s special administrative region of Hong Kong. Among them, customers in the Netherlands ordered 10 units of 100t crawler at the beginning of 2007, and four units have been delivered by October. One was on display in van Adrighem colours at this year’s Bauma, in Germany.

Sany uses a mix of foreign and local products on its 50t crawler, but relies entirely on overseas suppliers for parts on larger cranes. To avoid supply problems, Sany makes sure different brands’ components can be used for its products when they start initial development. For example, if Rexroth can’t supply valves during the producing period, they will seek to ensure they are able to change to another brand. Sany says that, for their established products, delivery times will be no more than three months.

So far, China’s new heavyweight crawlers look likely to be used only by local customers, both because supplies are short, and because foreign customers are reluctant to use newly developed products from the country. However, the country has demonstrated an ability to compete in flourishing Middle East construction markets: how long will it be before its crawler manufacturers are also competing in the region’s petrochemical sector?

Additional reporting by Lucia Wang

BICES 2007 saw a surge of crawler launches by Chinese manufacturers Chinese crawlers and flag Lovol's two new crawler prototypes at BICES 2007 Lovol crawlers BICES 2007 Zoomlion's QUY 70 crawler at BICES BICES Zoomlion QUY 70 Crawler cranes at BICES 2007 BICES crawlers