Potain in China

In the December issue we reported on how the People's Republic of China has become the world's number one growth market for construction equipment, and on the success that various international crane manufacturers were having there. Kobelco, Kato, Tadano, Demag and Liebherr are among the big names that enjoy sales success in China, but it is Manitowoc Crane Group - led by the initiatives of the French tower crane division Potain - that is establishing the strongest presence in China.

Manitowoc has one of its most senior executives based in China. Eric Etchart joined Potain in 1995 as managing director of its Italian operations. Two years later he moved to Singapore to set up a regional headquarters for Asia (just as the Asian tower crane market disappeared). He remained in charge of Asian operations after Manitowoc took over Potain, but with additional responsibility for the Manitowoc product line. When Grove joined Manitowoc Etchart became one of three regional executive vice presidents of Manitowoc Crane Group, alongside Marty Lakes in the Americas and Jean-Yves Bouffault (previously Etchart's boss at Potain) in Europe. In June 2002 Etchart uprooted his young family and moved from Singapore to Shanghai to follow the action. 'It's probably the biggest market in the world for tower cranes, in terms of numbers, although not by value,' he says.

Potain tower cranes have been produced in China since 1984, through licensing agreements and joint ventures. Problems relating to control, coupled with the obvious demand for good quality cranes, prompted Potain to establish a wholly owned manufacturing operation. Helped by the Zhangjiagang municipal authority, it bought out the local manufacturing company that is now called Zhangjiagang Potain Construction Machinery, in Jiangsu Province.

'Our goal is to build cranes specifically tailored to the local market while at the same time reproducing the high standards of quality and control we have at our other factories around the world,' says Etchart, who also acts as managing director of the factory.

The Zhangjiagang Potain plant produces models ranging from 40tm class up to 320tm. Models produced are the MC 50, MC 80, MC 120, MC 170, MC 200 and MC 300. Added to these is the new MC 230, which was officially launched (though not exhibited) at Bauma China in November 2002 (see box story). Jib lengths across the range begin at 40m and go up to 70m. Maximum capacities at jib end range from 1t to 3t. Crane structures are all fabricated in-house, but other parts are imported from Europe. Potain is now offering cranes to the Chinese market with its LVF Optima frequency controlled hoisting technology and the rounded-style Vision cab.

The 11.5ha factory site in Zhangjiagang includes a massive 60,000m2 (6ha) of production facilities. The plant also acts as a structural steelwork subcontractor for other Manitowoc Crane Group factories and can turn out 500t of processed steel a month working just one shift. More than 200 people are employed at the facility, only four of which are not Chinese.

As well as the factory, Manitowoc has a sales headquarters in Shanghai and branch offices in Beijing, Xi'an and Guangzhou.

Etchart says that there are about 200 tower crane manufacturers in China, many of which are state owned enterprises making small cranes. Most sell only in their own region. For bigger cranes there are 'only' about 10 players. 'We have a niche market strategy,' he says. Potain is aiming at that 10% or 15% of the market that is prepared to pay a price premium of between 30% and 50% for better quality. This market niche seems to be growing. 'Slowly, the concept of safety is gaining ground in China,' Etchart says.

After finding initial market resistance to Chinese-built cranes, Zhangjiagang Potain has now begun to export. 'This year Korea has been a good market,' he says. 'We invited customers to see the factory and immediately there was a big change and the rental companies started buying.'

Etchart speaks with pride about the advances that have been made in the factory. Tidiness and cleanliness are now watch words. A place for everything and everything in its place, is how he describes the philosophy there. He claims that the quality of Zhangjiagang Potain's cranes is 'getting close' to that of Potain's cranes built in Europe, although there is still a gap in worker education.

'It is just a matter of about three years, I would say, before you will see no difference between Chinese built cranes and European ones. That's my goal, anyway.'

And then, just maybe, we will see the tower crane manufacturing industry go the way that the dockside container crane industry has already gone - to Chinese-dominated production.