The Middle East remains one of the world’s most active construction and infrastructure markets. Governments continue to invest heavily in transport, utilities and ports, and are making efforts to diversify their economies beyond their reliance on hydrocarbons. There will be enormous demand for lifting and specialized transport services.
As the construction market grows in the Middle East and there is an ever-growing need to cranes, it begs the question to look into the crane market deeper. In global markets and in the Middle East, second hand cranes have always been used and there seems to be a steady demand for them.
There is such a growing demand that many trading websites have emerged to bring together supplier and demand for second hand machinery. For example, KHL launched a dedicated business unit under the name KHL Crane Market (http://www.khlcranemarket.com/) to create a market place for buyers and sellers of used cranes.
Basically, this market place is solely for supplier, brokers and crane dealers to place their products there by driving the right demand to this platform. This begs the questions of how big is the market for used tower cranes? It is actually extremely challenging to extract such data, but we can see the increasing demand to second hand cranes.
Other third-party traders include: MachineryZone, CraneNetwork, CraneTrader, Cranes4Cranes, Alibaba and a more local trader: Al Mawkaa.
But what are some of the key factors you should consider when you’re deciding to restore or replace a crane? Of course, the cost if a major factor; depending on the scale of work expected from a crane and the amount of money that needs to be spent on the maintenance or repairing a crane could sometimes even be higher than purchasing an entire new crane. However, the key point here is the timeframe that is expected from a certain crane to operate at a reasonable capacity.
Once you’ve reviewed the financials and maybe you’ve decided to maintain the crane, another important point is the availability of the spare parts and how quickly you need them. Some parts may not be found and not be manufactured.
Therefore, when purchasing a new crane, it is always important to remember that the manufacturer will offer OEM (Original Equipment Manufacturer) services; meaning that you can always go back to them (or their partners) and ask for spare parts and services if necessary. When we discuss repair and refurbishment, the technical aspect of refurbishment seems to be a more important factor for crane owners rather than the reconditioned and painted cranes. According to Liebherr, their most common repair and refurbishment jobs are on main components such as cylinders, slewing bearing, engines, transmissions.
EnCore programme: Potain’s second hand market
According to a report by International Cranes and Specialized Transport, USA-headquartered crane manufacturer Manitowoc has a dedicated rebuild, repair, remanufacture and exchange program for all models of Manitowoc, Grove and Potain cranes. It’s called the EnCORE program and it has been running since 2011. EnCORE refurbishment services are located in the Charlieu, France Potain Towwer Crane manufacturing facility. Each refurbished crane is rebuilt with genuine Potain tower crane parts. These are then painted using the same advanced paint technologies applied to new production. All refurbished cranes and parts are covered through Potain’s warranty programs and supported by the global Potain network, with all technical documents in the language of choice to support the refurbishment.
Through the EnCore programme Manitowoc offers various levels of refurbishment and, depending on the condition of the crane, crane owners can choose either an entry, standard or premium level of refurbishment. Standard across all levels is: a full inspection and calibration of all controls; the repair or replacement of slewing ring bolts; the repair replacement of hoisting steel wire ropes; finish painting and mechanisms and safety device overhaul; and a final functional test report with six- month warranty.
At the premium level the entire crane structure’s surface is shot-blasted, cleaned and repainted. The control system is overhauled, all mechanical and electrical components are repaired or replaced, and a full set of safety and function tests are completed. The crane then gets an EnCore accredited plate indicating the date of refurbishment. The premium level comes with a twelve-month warranty.
Here in the Middle East, NFT, a Tower crane specialist to use new 300,000sqm facility to increase stock, refit used equipment and improve customer service. The yard is now home to NFT’s growing stock of 1,800 tower cranes of which 200 are brand new models. It also contains 500 hoists and 35,000 pieces of spare parts. NFT has dedicated 2 facilities for reconditioning used tower cranes. The first one will be handling all the welding and painting while the second one will be focusing on mechanical and electrical work. The 2 facilities are joined together like an assembly line whereby each part of the used tower crane is checked and improved step by step until finishing with painting. The yard has enough space for testing as well. Considering the increase in demand for used tower cranes as the market becomes more price sensitive, NFT has invested heavily in this in-house solution of tower crane reconditioning in line with being the one- stop supplier for all lifting needs.
Second life: Used machinery market gets a lift
‘Whenever the construction market faces a slowdown economically, the demand for used equipment starts to increase,’ says one expert. With an atmosphere of cautious optimism pervading the region on the back of low oil prices, equipment manufacturers and dealers will tell you that machinery sales are not what they used to be a year ago. However, this does not mean that machinery is not being bought or sold. What has been built has to be maintained and, despite the caution, some projects have forged ahead, especially those that involve public spending on infrastructure. Enter the second hand or used machinery market. “Whenever the construction market faces a slowdown economically, the demand for used equipment starts to increase,” says a spokesperson from Mohamed Abdulrahman Al-Bahar LLC, a Sharjah-based distributor of Caterpillar products in the region.“During such scenarios, we have noticed that purchase of used machines falls within the budget for those customers who still have projects to run.” According to Al-Bahar, in addition to offering cost-effectiveness, used machines also come with lower risk. Since the investment is considerably lower, having the equipment lying around idle in between projects does not impact the bottom line as much.
At auctioneers Ritchie Bros., the biggest seller of used equipment in the world, Karl Werner, chief operations support and development officer and managing director, Middle East, Africa and India, is quite clear about the challenges in the market and how to meet them.
“We have the ability to transcend local challenges in any market by bringing in buyers from outside to create more liquidity and help maintain pricing levels. Dubai is one of 44 auction sites we have around the world and when we have an auction event, like the one we had in May, we get bidders from every corner of the globe, letting equipment as an asset flow around the world and effectively offsetting the downturn in one place with buyers from another,” Werner says. Of the 3,477 total registered bidders for Ritchie Bros.’ Dubai auctions in 2015, 54% were from outside the UAE, representing 84 countries around the world, he reveals. And they bought 42.9% of the equipment on sale. In total, the auctioneer sold $138.7 million worth of equipment from Dubai last year to a total of 1,429 buyers, which establishes the importance of Dubai as a used equipment hub. Helping Ritchie Bros. to broaden its reach is its wide online presence. The company saw a record 51% of its global sales come from online buyers in the second quarter of this year, which included a multi-million-dollar auction in Dubai in May, Werner says.
“The biggest Dubai auction we have had was around five years ago, which netted total sales of $57m.” Speaking about the prevailing conditions, he adds: “Last year we saw significant growth in our business here in the GCC, and the region has provided us consistent growth. There are strong markets in the GCC, but we’re also reaching out into Africa, Asia, Europe and the Americas to pull buyers in.” Over at Al-Bahar, the association with Caterpillar forms the backbone of their used equipment business. “All the used machines we sell are originally from our on-campus Cat Rental Store (CRS). Al-Bahar has invested hugely into the rental business, so all these used machines were used under our supervision and by our operators,” says the spokesperson. “We’re seeing customers for our used machinery from the contracting and transportation sectors and the machines in greater demand at the moment are medium wheel loaders, tele handlers, skid steer loaders and backhoe loaders.” The demand hints at maintenance operations and small jobs, rather than big projects, but Al-Bahar supports customers of all sizes, he adds. “Al-Bahar ensures that all used machines we sell are in good working condition and ready to work prior to delivery, as we offer warranty for our used machines.” Elaborating on the benefits customers derive from buying used, he adds: “With a proven track record of unmatched service, Al-Bahar is a trusted brand that not only sells used machinery, but offers unrivalled support to our customers with the warranty, parts availability, field service on call and a variety of other solutions for used machines.” For its part, Ritchie Bros sources its inventory from a variety of places, and Werner says: “We do the majority of our business with end users, whether it’s large construction companies or smaller ones that own just a few pieces of equipment. We also do a significant amount of business with dealers, brokers and OEMs. So you’ll see in some of our auctions, manufacturers from Asia shipping things here to sell into this market. Whether it’s going to stay in the GCC or go outside, we don’t know. But we can create that market for them where they feel comfortable sending their assets here to be sold.”
Machines consigned to an auction can be refurbished at Ritchie Bros.’ on-site state-of-the-art facility in Dubai, Werner adds. “Sometimes it is worth investing a certain amount of capital into a machine to bring a higher return. And we help our customers with that, first by machine evaluations and recommendation, and then with painting and refurbishing the machines both before and after an auction.” With the right resources in place and strategies on the table, there is little doubt that the used machinery sector in the Middle East will continue to supply the region and the world market with the used machines and equipment it needs to keep the wheels turning and the projects growing.
Participation in a Ritchie Bros auction starts with the registration, which is free. A refundable deposit equaling 25% of the total expected purchases, with a minimum deposit of US$25,000 or AED100,000 is required for all participants, says Karl Werner. Participants can either attend the auction in person at Ritchie Bros’ premises in Dubai’s Jebel Ali Free Zone or avail of the option to attend virtually by bidding on-line. Those registering on-line need to pay the refundable deposit by card or bank transfer, while participants wishing to attend in-person have the option of paying by cash or local cheques. However, only cash payments are accepted in case of those attending for the first time. Customers who wish to attend an auction can also avail of a special offer from Ritchie Bros. The company has a tie-up with Emirates airline that enables those registering to attend an auction to fly to Dubai on the carrier at a discount of 10% on the airfare. The discounted flights are available from five days before an auction to five days after it and, according to Werner, “is just another facility we provide that goes to show why we are the world’s preferred” auctioneer for used machinery. If the imposition of the bidding limit seems like a bit of a constraint for on-line bidders, there is a solution for that, too. “The entire inventory to be sold is up on our website before an auction, so if an online buyer knows what he will bid on, he can easily form an idea about how much it will go for. He can even view selling prices of similar items that sold at recent auctions. And then he can pre-clear his bidding limit based on his own projection of how much he will need to spend,” Werner says, adding that the management then decides how much can be approved based on the customer’s history.
The Ritchie Bros. yard is open for customers to come in and inspect the inventory up for sale.
“Many customers bring in experienced and qualified mechanics or machinery experts with them to inspect their prospective purchases,” says Werner. “We encourage our customers to freely take a look at the inventory to their satisfaction.” On-line bidders can also send their representatives to inspect the equipment on their radar. These representatives can be their own mechanics or experts, or third parties such as local machinery dealers who offer to perform inspection services on behalf of an on-line buyer. “Our processes are completely transparent,” Werner adds. “We endeavour to answer all questions that prospective buyers ask regarding the machines we sell. Whether they are in-person attendees or on-line participants, we provide them all the information at our disposal about their prospective purchases.”
Potain celebrates 90 years
Manitowoc Cranes will have a sizeable presence at Intermat 2018 in Paris, as the company’s Potain tower crane brand celebrates its 90th anniversary.
It is fitting that Potain tower cranes will take centre stage on Manitowoc’s stand. The event coincides with Potain’s 90th anniversary—it was founded in 1928 in La Clayette, in Saoneet- Loire, France—and on display will be two examples of Potain’s technological advancements: the Hup self-erecting crane range and an MDT 389, the largest of its CCS topless top-slewing tower cranes.
The Hup range includes the Hup 32-27 and Hup 40-30. Potain claims versatility and ease-of-use for these.
They have a maximum capacity of 4t and rear-slewing radius of only 2.25m, enabling them to be positioned closer to buildings – a major benefit when working in tight urban areas.
The Hup cranes are taller than the Igo 36, one of their predecessor models, but occupy the same footprint, again making them ideal for space restricted sites. Three raised positions of the luffing jib, at 10°, 20° or 30°, in addition to horizontal, provide unprecedented options for a self-erecting crane. They have two height options for their telescopic masts and an exclusive new radio remote control with Potain’s Smart Set Up software.
The MDT 389 is the largest topless crane from the Potain line-up to feature the company’s Crane Control System (CCS). This user-friendly operating system offers the highest levels of comfort, flexibility and ergonomic control, reduces installation time and provides unequalled maintenance features, particularly when using Manitowoc’s CraneSTAR Diag tool, a telematics and maintenance system.
The MDT CCS Topless concept enables complex multi-crane installations, and the assembly, erection, transport and maintenance phases are shorter than for previous generations of tower cranes. All of these features lead to a better return on investment, and CCS has been proven to increase efficiency on the job site.
There are two versions of the Potain MDT 389, with 12t and 16t maximum capacity. Both have up to 75m of jib available. The 12t version can lift 3.4t at its jib end, while the 16t version can handle 3.3t.
The tower cranes that will be shown were developed with significant customer input and participation. The cranes were developed with much more speed to market than previous generations of cranes.
“2017 has seen an uptick in construction and infrastructure activity in Europe, so we have selected a pair of cranes that we feel can best serve this region in terms of speed, efficiency and versatility, and also when working on urban job sites,” said Jean-Noel Daguin, SVP, tower cranes at Manitowoc. “We are also featuring solutions that we can provide to stakeholders of the Grand Paris Project, which will accelerate the transformation of Paris ahead of the 2024 Olympic Games.”
“The two cranes we will have on display at Intermat reflect true innovation over their predecessors and prove their value from transport to tear down.”