Mixed markets22 July 2022
Market analysis and trend detection, for tower and mobile cranes, across the Indian sub-continent, China and SE Asia. Stuart Anderson reports.
India’s economy, Asia’s second largest, is forecast to have grown by 8.7% in 2021-22 and by 4.1% in Q1 2022. In comparison China’s economy is projected to have grown by ‘only’ 8.1% in 2021-22.
Like the economies of most emerging nations, India has been severely impacted by external shocks driven by the Russian invasion of Ukraine. In particular, the invasion of Ukraine led to reduced fertiliser imports and cost inflation.
Surprisingly, the once-booming Chinese real estate market is presently in a slump – suffering from missed debt repayment deadlines by several major developers. Like India and much of SE Asia, China too has seen its builders increasingly favour pre-fab techniques demanding larger tower cranes as well as attendant mobile cranes with greater lifting capacity and work heights.
It’s estimated that some 15% of the Chinese hi-rise market currently demands pre-fab (PPVA). Meanwhile China house prices are expected to fall by around 1.5% this year.
In contrast, India has benefitted from record wheat harvests, plus significant improvements in wheat quality – now matching that of Australia’s Premium Wheat with approximately 12% protein driving record exports helped by a weakened Rupee as wheat prices surged by almost 50%. As a result, India’s farmers are receiving the highest prices ever for their crops.
Significantly, in the wake of Prime Minister Modi’s ‘Make in India’ programme, manufacturing has emerged as one of India’s high growth sectors.
The transformation of India’s economy is illustrated by a visit to Mumbai, or in fact any of the nation’s large cities, where a building boom has continued virtually constantly for the past 10-15 years. Never have India’s skylines seen so many tower cranes.
In contrast, in what now seems perverse, back in November 1971 India banned the construction of high rise buildings in Mumbai and New Delhi. That ban also limited construction heights to 80ft and 120ft (24m and 36.6m).
It was lifted in 1977 but left a degree of unplanned consequences in its wake. Prices of real estate and the rental value of real estate appreciated considerably and related building activity was paralysed.
Since those days calls for India’s cities to ‘grow vertically’ has grown ever louder. Of 1,816 housing projects launched in 2019, across India’s top seven cities, 52% were high-rise (with ground floor plus 20 stories and greater). Mumbai topped the list with 734 projects launched, followed by the National Capital region. During the 1990s 30% of high rise construction was for offices and with heights of up to 120m but since then building heights have continued to rise with up to 45 floors and 200m heights and today 95% of new builds are for residential occupation.
The flood of India’s population from the countryside to its towns and especially large cities has only exacerbated chronic overcrowding of the nation’s urban spaces and roads. This, together with general economic growth have fuelled a construction boom and especially driven demand for tower cranes.
The past 10-15-years have seen a transformation of India’s domestic tower crane industry. Until the mid- 2000s it was an industry stuck in the 1980s with old factories making small, old-fashioned cranes. By 2005 domestic tower crane demand had doubled from a low level to 120 units per year with Shirke – then the Potain licensee – taking a 50% share.
That year, in a rather-inspired move, Action Construction Equipment (Ace) began selling imported Zoomlion tower cranes and within three years had sold almost 200 units. The success of Ace/Zoomlion and the rapid emergence of numerous Chinese manufacturers was a wake-up call that encouraged Potain to invest in acquiring its joint-venture partner in Zhangjiagang.
Since then the production and sales of tower cranes in India have gone from strength to strength and, in no small measure, driven demands for improvements in product specifications and quality. Manufacturers such as Liebherr, Electromech/Zoomlion, Comansa, Yongmao, XCMG, and Sany have joined Potain in rapidly transforming their indigenous Indian tower crane production.
This year Zoomlion has extended its ‘localisation’ policies – beginning Indian production of tower crane jib sections, having started with tower sections in 2019. Even Portugal’s SOIMA crane producer has hooked-up with its long-term partner- Delhi-based Alpha Services – to extend its local manufacturing agreement.
Fundamentally these market pressures have meant manufacturers changing from the ‘older’ hammerhead style cranes to more-modern topless models as well as adopting more modern technologies including frequency control, and more-easily transportable, locally-made towers and jibs. For reasons of compatibility and quality leading manufacturers have localised the production of key fabrications.
For ten-tonne capacity flat top tower cranes Manitowoc/Potain has completely localised its tower and jib sections, cabs and counterweights but continues to import gearboxes, hydraulic cylinders, winches, wire ropes and electronics from France and China.
The company locally manufactures cranes of 5,6,8 and 10-tonnes capacity but continues to import 12, 14, 16 and 20-tonne cranes from France, Portugal and China. Potain had announced that it is presently planning the local manufacture of larger cranes – the 12-to-16-tonne classes. Today Potain Pune offers its cranes in compliance with EN 13001 along with FEM safety standards.
While 5-6-tonne capacity cranes remain the most popular, occupying 80-85% of the domestic market, the construction industry is witnessing a fast-increasing demand for Prefabricated Prefinished Volumetric Construction (PPVC). PPVC was introduced on the Singaporean market in 2017, on projects with pre-fab exceeding 30-tonnes in weight. This quickly led to increased demand for tower cranes of 1,000tm capacity and greater.
Petro-chem is another core market segments that continues to demand stronger tower cranes (there are presently 300 tower cranes on the Reliance Petroleum Jamnager Refinery project alone).
In addition to driving demand for higher-capacity tower cranes, this has naturally developed demand for larger truck and all terrain cranes used to erect the tower cranes.
India’s loosely-regulated real estate and construction industries have long-attracted developers and contractors willing to ride rough-shod over safety and other regulations, often in cahoots with the connivance of corrupt local officials. Largely because of the endemic widespread corruption, efforts to make tightened regulations ‘stick’ have not had the desired transformative impact.
For as long as many residents can remember, every city in India has witnessed regular devastating collapses of concrete buildings and highway bridges.
In November 2010 67 died and 150 injured when a poorly-constructed residence for migrant workers collapsed in Delhi. In March 2019 an under-construction building in Kumareshwar Nagar in Dharwade collapsed killing 19 and injuring over 100. In 2021, 11 (including eight children) died when a building collapsed in Mumbai.
For example, every year before the monsoon, development authorities such as that responsible for the Maharashtra Area, release lists of dilapidated and dangerous buildings and issue eviction notices which, regrettably go largely-unheeded as their poor and powerless residents see no viable relocation options. For decades, the problems have been exacerbated by the floods of tens of thousands of migrant workers relocating from the countryside as agricultural wages fail to keep pace with rising costs. Oft-times illiterate and easily-exploited, such workers neither have the education nor basic equipment to work safely.
Although the over-crowded financial centre Mumbai is the epicentre of such accidents, the situation is no better elsewhere. Neither is the problem simply limited to low-end accommodations.
In January 2020, in the deep south state of Kerala, local government resorted to employing controlled-explosions to destroy the brand new H20 Holy Faith and twin Alfa Serene palm-fringed apartment complexes. This drastic action was the consequence of local authorities being unable to resolve disputes with the builders. Their action was described as ‘a slap in the face of the 'Real Estate Mafia' that rampantly constructed buildings violating environmental laws'.
In 2012 Liebherr CMCtec India Pvt was established as a tower crane manufacturing base in Pune with the 85ec.b.5i flat top as its first model. Since then Liebherr CMCtec has added its NCB Series of topless tower cranes of six-tonne and nine-tonne capacity with 62m jibs and most-recently the line was broadened with the 12-tonne capacity NC-B 12-70 exclusively-produced in Pune.
As demand for stronger tower cranes has matured, India’s manufacturers have gradually expanded their product lines and increased their ‘localisation’ efforts. In 2018 Potain opened a new 9,760m2 plant in Chakan, near to the site of its former plant in Pune. Initially Chakan produced the MCT 85 and MC125 models
Since opening its new 56,000m2 Potain plant in Zhangjiagang west of Shanghai in 2006, Manitowoc has continued to expand its Chinese product line. In 2020 it added its largest model to date – the ten-tonne capacity MCT 278 and this year added the MCT 805 flat top with 80m jib and in 32 and 40-tonne capacity versions primarily intended for export markets.
In 2021 Potain introduced the MCT 135 flat top at its Zhangjiagang plant. Available in six and eight-tonne capacity versions the MCT 135 flat top featured Potain’s Optima hoist system and offered free standing heights of up to 50.9m and capacity of 1.5-tonne to 60m jib tip. At this year’s Excon in Bangalore this new model was added to the Indian production line and announced that it planned to replace the MC 125 saddle jib model.
However keeping pace with Zoomlion has proven a daunting challenge for the rest of the world’s tower crane manufacturers.
In 2019 the company hit revenues of RMB 433b ($61b) – an increase of 151%. Profits increased 58% to RMB 39,74b ($5.6b) while overseas sales declined slightly to RMB 3.7b ($504m). Of this total, tower crane revenues were RMB 10b ($1.43b).
In January 2020 Zoomlion broke ground on Phase 2 of its new ‘Intelligent Plant’ at Changde City and introduced its new ‘Cross Generation’ W Series tower cranes. The new plant had 16 new production lines with 150 robots and 10,000 data sensors.
Another of India’s major challenges has been to improve its road and highway network which at 5.89 million kilometres is already the world’s largest, but is far from being world-leading in terms of quality and safety. Highway construction investment increased at 17% CAG from FY 2016-2021 and the government’s current aim is to build Rs. 5.35 lakh crore ($741.5b) of new roads this year. But, like building construction, the nation’s highways have not avoided the quality issue. The dilapidated condition of much of India’s roads and the damage they cause to vehicles has long limited demand for new truck cranes and indeed for new highway trucks and vehicles.
Certainly, in the short term Indian market demand for tower cranes is expected to increase. Sany India’s senior vice president Sanjay Saxena is particularly bullish. "We anticipated a sustained market growth across India and the South Asian markets."
In particular, Sany also expects strengthening demand for crawler cranes of 80 to 300-tonnes capacity. Their optimism no doubt fuelled by their recent success in selling an 800-tonne SCC 8000A crawler crane for wind farm work to Dwarkesh Transport Corp in Anand, Gujurat.
Meanwhile pick-and-carry mobile crane market leader Ace has declared that it sees an increase in demand of 25% as well as a continued shift to larger capacity models. Ace is a company with an enviable track record and few mis-steps. It’s ebullient mood indeed may well be reflected in its bold development plans which now extend to developing its lattice crawler line from the current 40 and 75-tonne models to new models of 120 and 150-tonnes capacity. For a company founded on small pick-and-carry ‘tractor’ cranes, that’s quite a jump.
For some the Indian crawler crane industry has proven something of a minefield. The mighty Tata held on for many years producing and attempting to update its line of old P&H mechanical crawler cranes until it finally gave up. Similarly TIL found it difficult to give-up on its old diesel-electric Coles.
Nevertheless Ace was very early in recognising the coming tower crane demand and partnering with Zoomlion. They seem to have concluded that such larger crawler cranes will need higher tensile steel booms and improved cabs. Nevertheless many more challenges lay ahead and they would do well to learn from the lessons of ABG/Tusker Cranes.
Schwing-Stetter India, which now handles the sales and marketing of XCMG mobile cranes in India sees demand increasing from refinery expansion, metro projects and wind farm projects. In 2020 XCMG broke ground on a new tower crane factory in Foshan, Guangdong province which will have a planned production capacity of 600 units per month of cranes of up to 600 tm. It was scheduled to start production at the beginning of this year. The new plant had a designed size of 177,500m2 and a budgeted cost of RMB 2 billion. Once completed production of tower cranes of over 600tm capacity will be produced at Xuzhou, as well as at a plant in Chongqing with a capacity of 300 cranes per month. Subsequently the Xuzhou plant would be expanded by a 53,000 m2 addition with the main focus being on the production of personnel hoists.
XCMG also remains China’s largest overall truck crane manufacturer but that status is no longer as broad as it once was. XCMG’s dominance is based primarily on its huge domestic sales of smaller-sized truck cranes of up to 25-tonnes capacity.
Competition from Sany and Zoomlion in the larger classes of truck cranes has continued to undermine XCMG’s once all-powerful status. Recent years have been something of a rollercoaster ride for China’s entire construction industry. Although the production volumes and sales remain gigantic by global standards, the ups and downs have presented enormous challenges to the domestic industry. 2016 and 2017 were economically challenging for China.
In 2016 the market softened by some 36%. However, aided by government subsidies, demand quickly recovered and in 2019 worldwide truck cranes sales reached 39,000 and then rocketed to over 51,000 in 2020 before falling back to around 48,000 last year.
India’s mobile crane manufacturing industry has also evolved at a rapid pace. In particular Sany has been refreshing its truck cranes line. Last year Sany upgraded its popular truck crane series with longer booms. The new 50-tonne STC 500C has a five-section 44m boom while the 25-tonne STC 250C now has a four-section 33.5m U-shaped boom. Sany also introduced a ‘small’ multi-purpose/duty cycle lattice boom crawler crane – the 45-tonne capacity SCC 450A with a 40m boom.
In addition Sany introduced its E-Vision GPS system while, at Excon, it placed considerable emphasis upon its so-called new ‘biodiesel compliant’ models ranging from the 20-tonne STC 200 truck crane to its new 200-tonne SCC 2000A crawler crane.
Sany’s latest range of truck cranes – from the STC 250C, to the STC 450C, 600C and 800C, plus the SRC 400C rough terrain – feature ‘biodiesel power’ options that comply with CEV IV emission standards. At the opening of Excon, Sany India managing director Deepak Garg emphasised the industry impact of the fast-rising cost of diesel fuel and declared that his company had been working with various engine manufacturers on biodiesel options and said that several Sany products are now capable of B5 biodiesel.
Meanwhile Zoomlion India introduced the 110-tonne capacity ZTC 1100V truck crane (India version) rated 110-tonnes @ 2,5m radius. This 8x4 four-axle truck crane is equipped with a six-section 58.5m U-shaped boom plus optional 17.5m lattice jib. Zoomlion will be hoping that the new 110-tonner can emulate the success of its 80-tonne capacity ZTC 800V532 which has been selling like hot cakes. In recent times the 80-tonner has been Zoomlion’s market leader in India with sales of approximately 20 units/year.
While sales of all terrains continue to significantly trail those of truck cranes, Zoomlion has been achieving success with its ZAT series ATs in India. Amongst buyers are the leading crane Indian rental companies Amrit (200-tonne ZAT 2000) and Tara Chand Logistics (450-tonne ZAT 4500H and in 2020 a 400-tonne ZAT 4000 was sold by Zoomlion’s Qingdao-based dealer Maxizm to their Malaysian customer. In 2020 XCMG sold ten 1,600-tonne XCA 1600 all terrains to domestic customers.
Wind farm construction remains a huge market in China as well as most recently Vietnam where Sany has sold some 58 large crawler cranes. In China, XCMG has long held the lead position in the market for large crawler cranes, aided no doubt by its state-ownership. Their 1250-tonne XGC 16000 and XGC 15000 have proven particularly popular. While Sinopec has led the way with purchases of several landmark cranes up to XCMG’s top model of 4,500-tonnes capacity, other rental companies such as Shanghai Longji and Shandong Haiwan Hoisting Co have also added XCC 16000s to their fleets. Increasingly stiff competition, however, continues to be exerted by Sany who in 2020 sold a 800-tonne SCC 8000A for the Luanhekon wind farm.
In addition, XCMG’s near monopoly of sales to the State-owned energy giant Sinopec was again breached in 2020 with the sale of two 400-tonne Sany SCC 4000As as well as two 280-tonne SCC 2800A and five 130-tonne SCC 1300TB tele crawlers.
At this year’s Excon International Trade Show in Bangalore Sany India presented some 20 new machines including the 60-tonne capacity SCC 600TB tele crawler crane, 20-tonne capacity STC 200C truck crane, 110-tonne capacity STC 1100S truck crane with a six-section 63m boom, SRSC 45H1 reach stacker, SH 500 hydraulic grab and SCM 1000C-8 crawler milling machine.
MALAYSIA & SINGAPORE
Zoomlion entered the Malaysian crane market in 2009 with the appointment of Trans Elite Group Snd Bhd back in 2009. By 2013 they had sold over 100 truck cranes in the country and by 2015 had clocked up 200.
Within five years they had delivered almost 300 tele boom truck cranes commanding a market share of up to 65%. From the start Zoomlion truck cranes of 25-55-tonne capacity were employed on the landmark Bandar Malaysian transit development project connecting hi-speed rail with Singapore. The Zoomlion truck cranes were equipped with right-hand drive in the chassis and uppers as well as fly jibs that erect via a vertically-hinged system to limit their width during erection.
Zoomlion has been enjoying similarly impressive performance with its tower cranes in Malaysia. Two of their L500 luffing boom cranes were employed in the construction of the Kuala Lumpur Signature Towers. Featuring 60m jibs, 32-tonne capacity and 57.13m free-standing heights, these cranes have stepless speed regulation by frequency-control for trolley and slew.
China’s Bridge & Road initiative has also been widely welcomed in Malaysia with several of China’s mega state-owned corporations, such as China Railway Construction Corp., contributing to China being Malaysia’s largest trading partner for ten consecutive years.
Recent years have seen a rapidly increasing demand for tele boom crawler cranes both in China as well as in SE Asian markets like Singapore, Malaysia, Thailand and Indonesia. Sany has become the market leader with sales of several hundred cranes of 25-to-40-tonnes capacity often working as support cranes on foundation projects.
In 2021 Sany Heavy Industries registered a 6.82% increase in sales measured in US dollars to $ 16.02b with net reaching $1.82b. As usual Sany’s excavator sales were outstanding – at $6,3b (+11.25%0 while sales of cranes of all types totalled $3.3b (+12.62%).
As Covid wreaked its toll around the world, by early 2021 most of China’s Belt & Road projects across SE Asia had stalled. While major railway projects represented significant international projects involving Chinese Government investment the range of work was very broad indeed. This included several mega projects in Indonesia, Philippines, Korea and Malaysia with local national governments intervening on public health safety grounds.
The first XCMG tower crane was sold in Indonesia in February 2013. The following year the 50th unit was sold – two units- an XGT T200 and a QTZ2200. In 2017 XCMG opened a branch in Jakarta. In 2019 XCMG shipped 100 of its XE 215 excavators and 22 mobile cranes including 11 55-tonne QY 55KA truck cranes and 11 x 75-tonne QY 75KA truck cranes to Indonesia’s largest nickel-iron mining project.
With the significant aid of China-funded projects in the country, for the last five years XCMG has been the market leader in Indonesia in sales of mobile cranes, tower cranes, loaders and drill rigs.
However, in 2020, Sany won contracts for some 500 pieces for the Jakarta-Bandung high-speed rail project including mobile and crawler cranes as well as concrete pumps and road machinery.
In 2014 XCMG supplied a 650-tonne capacity QUY 650 crawler crane for the construction of a drilling platform. Soon afterwards XCMG won an order for its 1,250-tonne capacity XGC 16000 crawler crane to work on Batam Island. In the interim, XCMG had supplied units of this model to a wind farm in Zhangjiakau in Hebei Province where it hoisted 5mw wind turbine and a similar model was contracted to do similar work on a wind farm in Inner Mongolia.
Indonesia’s fleet of tower cranes mainly consists of somewhat ‘dated’ hammerhead cranes supplied from China and including former licensed Potain HS/36B and FO/23B saddle jib models produced by Sichuan Qiangli Construction Machinery Co. and others. More contemporary models such as XCMG models have found success on hi-end projects including the luxury apartment Resistance -8 SCBD complex at Senopati where they operated to heights of 280m.
In 2021 a $3.5b project to build a 10m tonne steel plant was agreed with Panhua Steel and led by the Chongqing Municipal Government for the City of Davao in the Philippines that involved the supply of some 70 Zoomlion truck and crawler cranes.
Corruption is endemic in Kazhakstan which remains a major market for Chinese machinery, with XCMG being the major crane supplier. The principal issue is the volume of products that ‘go missing’ on the border between the two countries.
On 3 June the UZXCMG construction machinery plant was officially opened in Urgench. A joint venture between XCMG and Uzbekistan State Railways the new plant will produce a broad range of XCMG construction machinery. XCMG has established itself as the leading supplier to the Central Asian republic.
Local production includes natural gas, gold and cotton. However stiff competition is being offered by Sany which has a contract worth over RMB 200 million with ENTER – the Uzbekistan Ministry of Energy and Road & Bridge Bureau. This involves the supply of some 44 crawler cranes up to the 650-tonne SCC 6500 for nuclear power plant construction.
Breaking the Chinese stranglehold on crane sales in the region, Liebherr Werk Nenzing supplied two heavy duty HS 885HD and one HS 8130HD crawler cranes equipped with deep foundation grabs and oscillators on piling duty on a housing project for Vibro (H.K.) Ltd.