The New Trend in Demand for Mobile Cranes
The demand curve for mobile cranes would be on the rise. Increasing private sector participation in infrastructure, long-term commitments by the government to develop infrastructure, amid political volatilities, would be some of the factors influencing the demand figures Macro economic sentiments of a realistic forecast in economic growth, possibility of continued progress, coupled with inflation, are some of the other contributing factors.
However, the basic requirements would stay constant, essentially in the infrastructure - arena, pertaining to core construction and industrial projects, and hence the negative sentiments are likely to be neutralized, thereby maintaining the demand levels. Nevertheless, as per industry estimates, the projections are expected to be good enough, but not to the level, as witnessed during 2007-08 and 2008-09.
The mid-term and the long-term demand for mobile cranes, is expected to emerge from the upcoming industrial projects. Reveals Ms. Mythili Balasubramanian, Chief General Manager & Head, Syndication and Advisory, Industrial Development Bank of India.
"Loan off take by industrial project developers within the infrastructure space, was fair during 2009–10 but not outstanding, as compared to 2007-08. The 2010-11 fiscal maintained the same level of consistency. A similar trend is expected during 2011-12. Sizeable loan off take is expected for setting up captive power units, especially in the steel and manufacturing sectors."
A positive demand escalation, is expected in the mid-term, as the government would focus on clearing the backlog of pending projects. According to S.B. Kulkarni, General Manager, Head, Marketing & Tendering, Group-2, Bridges, Flyovers, Metro and Railways— Gammon India Limited, there has been a delay in awarding projects by the government both at the Central and State levels, during 2008-09 and 2009-10 as compared to 2007-08. There has been a delay of 6 to 10 months in some cases to award projects for bridges, flyovers and railway sectors. "Going by the long-term end user requirements, the government would certainly look at various options to execute the pending projects during the mid-term," he says hopefully.
"Many incomplete projects, have critical erection components," informs Kulkarni, adding, "The execution of these projects would require, main crawler and supporting cranes in the form of mobile tyre mounted units."
The impact of economic growth on the demand for mobile cranes
The rate of economic growth will influence the demand for mobile cranes. The pick and carry segment is likely to benefit the most from the positive forecast.
Mr. Rajesh Sharma, Vice President and Head-Marketing, Sales and Product Support, Escorts Construction Equipment Limited, elaborates, "The demand for pick and carry cranes has got a strong correlation with the country's economic growth. Positive economic forecasts, supplemented by industry estimates, the demand for pick-n-carry segment is expected to be to the tune of 17-20% CAGR in the next five years. The economic growth would create a wide range of lifting jobs across infrastructure, mining, agricultural, industrial and urban renewal sectors. With the help of intrinsic - lifting and mobile features, widespread deployment of these cranes can be undertaken, be it pole erection, or laying pipelines. Going by its traditional application, pick-n-carry crane can find its wide usage as support equipment in construction projects at job sites whether it is for moving captive power generating sets or moving steel structures. The add - on applications are, lifting and moving stone slabs, for commercial or residential projects. Significantly, the product can be widely used for intra-and inter-plant moving in the manufacturing sectors, to support a host of production activities." ECEL commands 60% market share in the pick-n-carry crane segment in India.
As per industry estimates, the demand projections for pick and carry cranes is around 8,500 units in 2011 and 13,000 to 14,000 units in 2014.
JCB manufactures two models of pick and carry cranes, they are Lift All 1253, bearing a lifting capacity of 12 tons with 3 part boom extension and Lift All 1202 bearing lifting capacity of 12 tons with 2 part boom extension.
"Multipurpose applications being the major USP of cranes, a huge demand generation would be automatic" agrees Mr. Amit Gossain, Vice President Marketing, JCB India Limited. He says, "Though lifting and moving are the main features of the equipment, it can undertake a wide range of loading and unloading functions within its permissible lifting limits, across infrastructure projects."
Besides the wide range of applications, and catering to a wide spread deployment of the equipment, there is another major factor, element manufacturers' perceive, that would continue to keep the demand for pick and carry cranes, stable, is pricing. Elaborates Rajiv Kumar, Divisional Manager-HED, Action Construction Equipment Limited, "It is the competitive pricing factor that would keep pick and carry cranes at an attractive buying proposition for potential buyers. Competitive pricing in its designated capacity class, would continue to make the machine attractive for rental companies and small time hirers which constitute its major buying segment. Affordable pricing would also make the cranes attractive for first time buyers as well as contractors." He further adds, "Competitive pricing will ensure that the machine is commercially viable, in a price sensitive market. This is especially applicable in the current contractual situation with severe pressure on margins."
Wide modifications and the shift in product - demand
Interestingly, led by the existing potentials on the wide range of deployment, the future demand for pick and carry cranes would be seen at a much higher capacity range. pick and carry cranes are manufactured by ECEL in the range of 5-23 tons.
While pick and carry cranes with a capacity range of 9-20 tons are made available by ACE, 12 and 14 ton capacity, by Voltas Limited. Manufacturers expect a good demand for higher capacity pick and carry cranes, from infrastructural, industrial, and manufacturing sectors; especially at factory warehouses, for stocking and moving of engineering equipment.
Though the equipment suffers certain technical limitations with permissible axle loads at 10.3 tons and certain safety concerns, manufacturers have been carrying out modifications, to bypass the limitations. Modifications carried out include, slotted boom, rope compensation, higher winch capacity, dragging winch without triggers, to provide enhanced stability. Features for long distance transportation have also been added. Modifications in the areas of safety features, lowering down the centre of gravity to prevent toppling of machines, safe load indicators with audio visual warnings, improvement in the visibility of the operator's cabin, have been carried out. Roll over and fall over protection have been added to the operator's cabin.
The major share of mobile tyre mounted cranes will continue to be dominated by pick and carry cranes. However, going by the emerging features and applications, there would be a great demand for rough terrain (RT) cranes. Mr. Aniruddh Moharir, Divisional Manager-Cranes, Voltas Limited, throws light on the increasing demand for RT Cranes, "Going by the project applications, there is a great demand for RT cranes, involving a capacity of 20-110 on the higher side, in India. RT cranes will find its future applications in road construction, water pipe laying, refinery, power, bridge construction and mining. Voltas manufactures RT cranes bearing lifting capacities, from 20-45 tons."
According to Moharir, the demand for RT cranes in the country, would be essentially propelled by its potential to provide higher economic returns and competitive pricing factor in the class above 20 tons. Moharir expects the market to grow at the rate of 15% CAGR in the coming years.
A major shift in the demand from mobile cranes to All terrain cranes (AT), is also expected. Demand for all terrain cranes would be generated from thermal power projects, wind mill power and cement plant projects. Endorses Mr. A.K.Somani, Representative Director, Liebherr India Private Limited, "AT are ideal support equipment to crawler cranes for wind mill and power plant projects. The cranes are mostly required to unload from the transportation system, handle the equipment and parts required for power projects, which are then lifted and placed by the main crawler cranes. And going by the project volumes, demand for ATs is expected to be healthy." He informs, "As most of the wind mill projects in the country are located at sites with poor connectivity links, AT with their multi axle features and high mobility, would facilitate easy access to the job sites."
Liebherr is laying focus on promoting its 50-400 tons, 'used all terrain cranes' in the Indian markets. Terex may also tap the All Terrain market, shortly. The company is looking to promote 250 -350 tons cranes for the Indian market.
The shift in demand is expected from tyre-mounted cranes to truck- mounted mobile telescopic boom cranes. There are a few players aiming for their share in the emerging truck–mounted crane market. Terex will focus on 70 -130 tons mobile truck mounted cranes. ACE will focus on its 23-70 ton cranes through its Ashok Leyland mounted chassis. On the other hand, Voltas will bank on its recently introduced 25 ton truck crane, mounted on AMW chassis. The product is currently in its prototype stage, and hence the company expects to commence commercial production in July 2011.
For its share of the pie, Palfinger may promote its newly developed stiff boom crane of 8 meter-ton capacity. Product- assembly has begun. According to the truck mounted knuckle boom crane manufacturer, the 8 meter ton capacity crane would well synchronize with 7–11T GVW trucks. Palfinger has plans to launch 12 meter-Ton and 17 meter ton cranes during 2011. The products will be manufactured at its Chennai plant. As per Palfinger, Indian customers are mainly opting for small and medium size cranes that can handle 1 to 5 Tons, at a distance of 4–8 meters. However, on the basis of its past experience in other markets, the company perceives better results in the Indian markets with a demand for higher capacity truck mounted knuckle boom cranes. Palfinger is in the process of establishing its sales and service network in India and aims to sell at least 200 units in the current fiscal year.
Says Rajeev Kumar, Divisional Manager-HED ACE, on a positive note, "Truck mounted crane, is in its concept selling stage in the country. However, the product will soon foray into refinery, power, cement plants, industrial projects and in many more sectors of the infrastructure industry as well, by virtue of its versatility."
His views were echoed by Mr. Subhamoy Ghosh, Managing Director, Palfinger Cranes India Private Limited, "Truck mounted crane is a new concept of integrated transportation in India, where the truck is able to load, unload and perform the task of transportation as well. Currently, in India, the loading-unloading and transpor- tation, is done by two equipment – where different types of equipment / or manual labour does the job of loading-unloading and the truck barely transports. With the new concept, a truck does not wait to get loaded and unloaded, since the power of the crane installed on the truck, enables it to do that by itself. Therefore, the truck that made multiple trips in the past for short lead distance, benefits on better turnaround time, due to reduced waiting time on loading and unloading."
According to him, the sectors creating a sizeable demand for truck mounted cranes, would be the utility sectors comprising Electric Industries (Transformers/Cable Drum handling/Pole erection), Municipal sectors, Brick block manufacturing and Timber log handling industry. However, he strongly feels that the infrastructure projects may adopt and benefit more from the new and versatile truck mounted cranes, as their transportation needs are mostly shorter lead distance.
Besides this, the versatile features of the truck cranes, render them suitable for hydraulic clamping, grabbing, and drilling sectors too.
Demand for Crawler Cranes Stable
Robust development of power sector projects by private and government sector utilities, would keep the demand for crawler cranes stable. Reveals Somany, "A healthy demand from power sectors would lead to positive demand correction for crawler cranes, unlike in the past."
As per senior lifting executives of the industry, the market for 350 ton-600 ton crawler cranes, is estimated to be seven to eight cranes during 2011. For 1000 tons, the demand is estimated to be two-three cranes in India.
Taking a cue from the power sector demand, Liebherr may promote 600 tons and more capacity of crawler cranes. Somany informs, "Liebherr has supplied a 1,350 ton crawler crane to Nuclear Power Corporation of India. We are very optimistic about the demand for 2500ton crawler cranes from the thermal power sector. However, in India the demand from the wind power sector, may remain modest, as compared to China but not too low either."
Says Somani, "To win the race, we do not intend to cut down prices of our products. Instead, we would focus on offering a complete value-rich package, to our discerning customers in India—superior quality product, uncompromising customer service, timely spares availability and high equipment resale value."
Mr. Nilesh Bhorkar, Manager–Product Sales and Marketing updates on Kobelco's product highlights and sales figures, "To take on pricing competition, Kobelco, initially would be manufacturing hydraulic cranes of 100 tons, at its upcoming plant at Sri City in Andhra Pradesh , while 150 tons and 250 tons would be taken up at a later stage. Approximately 50-60% of the components would be indigenous, consisting of crawlers and fabrication parts, while 40-50% of the components—engines and boom would continue to be imported. We would also strengthen customer support for our cranes, through our distributor, Voltas.
In India, Kobelco Cranes, with a current work force of around 150. CKE 2500, 250 tons crawler cranes, is the prime selling segment. We have been able to sell 86 units. 17 numbers of CKE 2500 were sold to Bharat Heavy Electricals for its power plant construction and also to rental companies. Kobelco sells hydraulic cranes with capacity variants from 60 tons-550 tons, in India. Our focus is on crawler cranes, bearing capacities of 250-180-135 tons. Kobelco has sold capacities from 80 tons-550 tons to EPC contractors in India."
Terex concentrates on Hydraulic crawler crane segment. Mr. T. R. Badarinarayan, Executive Director, Terex Cranes, Terex India Private Limited, shares, "We plan to promote our 600 tons plus capacity cranes in the Indian market."
The company has well designed plans to establish and consolidate its market presence in India, which includes localization and customer support. Mr. Kevin Bradley, President Global Marketing and. Mr. Francois Jourdan, Vice President, Terex Cranes, jointly share the company's immediate plans, "We are looking for long-term investments in India that would focus on increased localization of some key products. We plan to start the process for local vendor development for procuring components for our cranes. The thrust would be to offer products that befit the Indian market, by seeking a regular customer-feedback. However, no product-modifications would be carried out at the cost of safety features. Terex would be offering direct sales and service support to customers in India. However, a dealer network would be set up, only for any value addition."
Terex has set up its plant at Hosur near Bangalore as well as its Engineering Center in Bangalore. ABG Cranes is all set to make its presence in the market through different crawler crane product offers. Having developed and commenced production of its 80 tons cranes ABG 1080, the company is now in the process of developing its 35 tons and 160 tons hydraulic cranes. Post-testing of its production, prototypes of the cranes would follow.
Mr. R.B. Pandey, General Manager, ABG Cranes Private Limited, shares the demand projections by the company "Demand of 40-50 machines is expected for the 35 tons class. While for 160 tons, it is expected to be 20-25 units, for ABG 1080 it is expected to be 50 machines during 2011-12. To meet enhanced demand, the production capacity of our plant has been increased to three machines per month."
While power and refineries, essentially remain the prime sales area for crawler cranes, other emerging areas include mining or simply for loading and unloading functions. ABG has supplied one of its ABG 1080 to Chennai Port Trust, for loading and unloading of break bulk cargo in vessels. Interestingly in India, bigger sized projects, demand crawler cranes with higher lifting capacity and longer reach, supported through luffing, and fixed jib arrangements, demand for high capacity crawler cranes and longer reach are led by critical load requirements. Critical load requirements, are the maximum load lifting requirements at a particular radial height. Critical load requirement factor is critical, in power plant projects when the crawler cranes have to lift ceiling girders and also for lifting and placing of boilers and turbines. With higher capacity power plants being planned in the country, critical load requirement plays a pivotal role.
The Rental Market Scenario
The future of Rental market for mobile cranes may be bright, as it has been in the past, when there was a good supply of sparingly used cranes both from the domestic and construction markets. Mr. Prakash Shah, Director, Samarth Lifters Private Limited, explains "These are critical and trying times with project requirements becoming more complex and specialized. Long-term experienced players equipped to offer quality customer service by ensuring high equipment uptime and ensuring successful lifting operations may stay on."
"Samarth rents out its crawler crane to EPC contractors, executing liquefied natural gas projects and power projects. The company has very recently acquired a new CKE 2500, 250 ton crawler lattice boom crane from Kobelco", he reveals.
Similar views are shared by Mr. Mitesh L. Sethia, Managing Director, Shethia Erectors and Material Handlers and Mr R. Ozarkar, Sangvi Movers Limited. says Ozarkar "There would be a sustained requirement for competitive, pricing, quality and value added service from rental companies, especially from contractors executing valued projects."
However, despite the projected percentage of demand for mobile cranes looking bright with the market rebounding, major factors influencing demand would be government's long-term policy in developing nuclear power projects, followed by the reactions of the Catastrophe in Japanese nuclear plants. Feasibility of the detailed project reports for green-field power plants, financial health of oil refining companies are critical factors, besides those in various sectors of infrastructure.
