Between 2004 and 2006 we saw a major increase in construction activity” in South Africa, Van Breda says. “After the award of the 2010 Football world cup the trend was bolstered by projects to construct new stadiums and hotels around the country.
“Many of the listed construction companies and even major second tier firms owned tower cranes that were over 15 years old. Due the fact that the industry was so subdued prior to 2002, the major owners of tower cranes made do with the older cranes. We at SA French supplied service and maintenance to these customers, only selling the occasional crane when a project would in fact pay for its purchase. Our own rental fleet was modest at 10 units.
“With the increase in demand these companies could no longer use the older cranes due to a number of factors: mostly the frequency of breakdowns, low cycle time, and rising cost of older spare part as well as the availability of those parts. Unfortunately the lead times for new cranes got worse at the same time that demand went up-which meant we had to pre-order up to a year in adVance to secure cranes to supply to these companies.
“On another level there was also a significant increase in demand for cranes from second-tier contractors that started picking up jobs that the listed companies did not have the resources or time to take on. Due to the fact that many such contractors did not have experience using tower cranes, we took the decision to increase rentals to cater for first-time users. This usually results in a conversion from rental to purchase within a 12 to 18 month period.”
Until recently, Potain distribution in South Africa was split between SA French, covering the north and east of the country, from Johannesburg, and Ernie’s Tower Crane Service, covering the west of the country from Cape Town. In June 2007, Manitowoc ended its distribution deal with ETCS, leaving SA French the only Potain distributor in southern Africa. It also sells to Namibia, Zimbabwe and Botswana.
The company listed on the stock exchange in November 2007. Van Breda explains the rationale. “The decision to list was informed by our need. We wanted additional capital to expand our inventory and to mitigate the impact of long deliveries. Remember that the backlog issue is twice as difficult for us in South Africa, because we also face major shipping delays after we have finished waiting for the crane to leave the factory. We also wanted to raise the profile of the company with both suppliers and clients, and to be in a position to affect an acquisition should a favourable deal present itself,” he says.
At the same time, SA French opened its first depots in South Africa’s second and third cities, Durban and Cape Town, to offer a nationwide service with about 30 tower cranes. “Before we opened our branches we relied on several subcontractors to service our clients at the coast. This meant that we could not guarantee the standard of service and took the decision to open in our own right. Most of the sub-contractors were more than happy to be incorporated into the branches, so we also retained skills.”
Van Breda says that 55m-jib cranes are popular. “The 55m-60m jib cranes, such as the Potain MDT98/MDT178 are popular. There is a trend toward longer jib cranes (up from 40-45m) while still being relatively lightweight and easy to erect and dismantle in a city. Topless 50-55m jib crane s, like the Potain MCT88, are also popular. They’re ideal for rental to a first time user or a listed company that needs additional coverage without needing more than 5t lifting capacity.” He says that Liebherr, which operates a wholly-owned subsidiary, is the biggest competitor in new cranes.
