In Part I of this report, various issues were discussed in details; such as the factors to consider when employing a used crane and the importance of the after sales services of a crane manufacturer.
In this second part, we will further explore this question and also look into the EnCORE program in greater details. At the end, study and analyze the diffuse demand for UK cranes as a case study of how the demand of cranes changes in a country given difference economic landscapes.
In Part I, we discussed that besides the cost factor of repairing or maintaining a tower crane, another important point is the availability of Spare Parts. Some parts may not be found as they are no longer being manufactured. With regards to this, when purchasing a new crane, it is always important to remember that a reputable manufacturer will offer OEM (Original Equipment Manufacturer) services; meaning that you can always go back to the manufacturer (or their partners/dealers) and ask for spare parts and services if necessary. When we discuss repair and refurbishment, the technical aspect of refurbishment seems to be more important for crane owners than the retouching and repainting on an “older” tower crane.
Further look into: EnCORE program: Potain’s second hand market
USA-headquartered crane manufacturer Manitowoc has a dedicated rebuild, repair, remanufacture and exchange programme for all models of Manitowoc, Grove and Potain cranes. It’s called the EnCore programme and it has been running since 2011.
EnCore programme offers various levels of refurbishment and restorations and, depending on the condition of the crane, crane owners can choose either an entry, standard or premium level of refurbishment. In Part I of the article, the information can be found in details about the different services.
Important factors to consider before refurbishment
The level of refurbishment is dependent on the age of the crane and how many hours it has worked in its lifetime, and also a key factor is the climate in which the crane has been operating in, as this could directly affect the level of service needed. It is always recommended that a third-party expert analyzes the level of refurbishment needed.
Another important factor about refurbishment is financing. Different companies might offer financing options that could have a smaller impact on the cash flows of the projects and make it more accessible for crane owners of different sizes. Manitowoc also offers finance options for EnCore purchases. It claims this supports lease agreements and, unlike traditional lending, Manitowoc says its financial products don’t affect bank lines of credit, leaving customers’ capital resources intact for times when they need ready access to cash. This is extremely important and valuable given the fact that many companies (more notably smaller firms) don’t take in to account the cost or the cash flow for crane refurbishment and maintenance services, therefore such option could be a very valuable factor in choosing the companies that carry out the crane support services.
EnCORE: different levels of crane refurbishment
Manitowoc has three EnCore facilities in Europe and one in North America. Specifically, these are in: Lagenfeld, Germany; Buckingham, UK; Breda, the Netherlands; and Bauxite, Arkansas, USA. In addition, there are several independent, certified EnCore partners that Manitowoc works with to perform the work. According to Manitowoc, customers typically visit an EnCore facility to see a refurbished crane, enabling them to inspect and operate the machine before they purchase.
According to an article published on International cranes and specialized transport publication, Manitowoc reports that its EnCore program is particularly strong in emerging or less economically strong markets. In Europe, for example, Manitowoc says it has a strong EnCore presence in Poland, Czech Republic, Hungary and Slovakia – as these countries tend to buy more used cranes with warranties. Manitowoc says it sees little used business in China or India as these are more mature markets, while the Middle East is mixed because it has strong connections with China and India.
In order to avoid competition between new and used cranes, EnCore utilizes similar sales and distribution channels.
“The benefits of EnCore are clear,” enthuses Manitowoc’s Central Europe sales director, Erdo Arslan. “Customers have access to a refurbished crane that comes with a warranty for less of a capital investment than a new crane. Also, some customers may prefer an older model crane or have a crane that they would like to keep in their fleet, in which case EnCore is also an ideal option for them”.
EnCore programme also has a dedicated website, www.Manitowoc-used.biz.com , for mostly Manitowoc-owned used cranes.
Opposing views – when NOT to repair cranes
According to an article published on International cranes and specialized transport publication, “market conditions certainly weigh on a decision to restore or refurbish a crane. The owner has to feel there is enough business to justify spending the time and money involved,” says Tyler Smith, vice president of business development at Certified Boom Repair. “Aging cranes can often be refurbished for half the cost of buying a new one and can be put in excellent operating condition. However, when the repair cost exceeds 60 to 70 percent of the value of the crane then crane owners might be better off buying new.”
Wheco, a worldwide provider of heavy-equipment repair and restoration services is another American company that has been repairing and restoring cranes and lifting equipment for over 35 years. According to David Wood, president at Wheco, “the decision on whether to repair or refurbish a damaged or old crane comes down to its value and what the owner is looking for in a return on investment. Some older cranes are just not worth the investment to bring them up to a safe and reliable long-term condition.”
Potential crane buyers – watch out! It’s not all about the cost.
When deciding to repair or refurbish a tower crane, crane owners should consider that cost saving should not be the only decisive factor. Just like any other purchase in the construction sector, cheaper doesn’t necessarily mean a better deal specially when it comes to tower cranes; as extra costs arise months and at times years after making the total investment much bigger than the paid amount.
Therefore, it is recommended to have a long-term strategy when deciding between repairing or replacing as a tunnel vision can have a bias effect. Low cost repairs might save money in the short term but tower crane owners should always consider how that would affect safety. “Make sure you pick a company that has experience because there are many factors to consider and be aware of when refurbishing a crane,” advises Smith from Certified Boom Repair. David Wood from Wheco adds that tower crane owners should “look for a good partner” to work together in deciding or even in refurbishment. We need to know the complete history of the machine and what the expectations and budget are of the owner. “There cannot be any secrets, or the outcome is destined to fail”, add Wood.
The role of the third-party expert that analyzes the tower crane history’s and usage is yet again important in having all the necessary information before making any decision or investment.
As the construction industry in the Middle East is growing rapidly and the demand for used cranes is increasing, maintenance and refurbishment of tower cranes have becoming major topics of discussion in the industry. The fact is tower cranes need after-sales services constantly to prolong their livelihood. The more reputable brands can guarantee a network of support and spare parts and “stronger” tower cranes. However, even the best manufacturers will tell you that tower cranes, like any machine, have a break-even point where the cost of maintaining them exceed their value. The challenge is to recognize this break-even point and to delay it as long as possible, or at least until getting a return on your tower crane investment.
Euro Auctions reports rise in bidder, buyer and vendor numbers in second Dubai sale
Almost $2million worth of equipment snapped up by UAE-based bidders, justifying physical presence in region, says auction house
Euro Auctions has reported a 40% rise in the number of bidders in its second sale in Dubai held last month at its new permanent site in the city.
The global auctioneers of industrial plant, construction equipment and agricultural machinery, said the rise in the number of bidders, as well as in the numbers of successful buyers and new vendors consigning equipment to the sale, is a vindication of its decision to enter the regional market earlier this year.
This was Euro Auctions’ second sale in Dubai after it held its inaugural auction in the region in September last year.
According to Euro Auctions, over 400 lots went under the hammer in the auction, attracting strong interest from across the Middle East as well as from India, Western Europe and Russia. Almost $2m of the sales were snapped up by UAE-based bidders, with significant purchases also going to Oman and Saudi Arabia. Europe accounted for a further $700,000 of the total hammer value, with key consignments going to bidders in Germany, The Netherlands and the UK. Floor sales on the day accounted for the vast majority of business, with just over 20% being transacted online, said the auctioneers, adding that the numbers prove how much a physical presence in the region is vital to meeting local demand.
Euro Actions has leased a 91,000sqm site in Dubai’s Jebel Ali Free Zone. The site includes a purpose-built auction complex covering over 3,000sqm with a 360-seat, fully air-conditioned enclosed auction arena as well as ancillary buildings, workshops and infrastructure.
“We are absolutely delighted about how this sale has gone, firmly placing our Dubai operation in the region and on the calendar,” said Jonnie Keys, Euro Auctions’ commercial manager. “News on our recent arrival in the region and our ambition to be a professional and key player in the used construction equipment sector is certainly getting out and stimulating much discussion. An ever-expanding portfolio of vendors are entrusting us to achieve strong hammer prices for them when disposing of equipment, but it’s also about the full service that we offer and building a solid relationship with all involved. We’re also now signing up a number of the key equipment holders across the region as they look to use our facilities moving forward and this is only positive for bidders as the quality, quantity and variety of used merchandise coming to auction will only improve.”
Notable lots that went under the hammer at the Dubai sale included an unused 2016 Volvo EC210BLC excavator which went for $75,000. Telehandlers and loaders were also in good supply with a 2008 JCB 540-170 selling for $43,000, while a low-hours 2015 CAT 966 went for $147,500, said Euro Auctions.
“Having a permanent presence in the region is both opening the door to many new buyers and sellers and enabling us to better link together our global operations so we can offer a complete service and sell equipment in the markets where they are most desired and where they will achieve the best prices possible. Having a strong sales and support team here on the ground in Dubai, backed up by our international operations, has been a key factor in our success and was a key part of our growth plans for 2017, along with founding our successful new operation in Hong Kong,” said Keys.
Euro Auctions’ next Dubai auction will take place on March 5. Other upcoming sales include a three-day sale in Leeds, UK, from January 31, a one-day sale in Brisbane, Australia, February 8, and a five-day sale in Florida, USA, from February 13 under the company’s US subsidiary, Yoder & Frey.
Intermat preview: Spring in Paris
The Intermat construction equipment show comes around every three years. Held in France, it will be the main show, in Europe, for the industry in 2018 from 23 to 28 April at the Paris-Nord Exhibition Centre, France. Paris, France, will be the center of the European construction industry in April with the latest edition of Intermat – the Continent’s biggest trade exhibition for construction this year.
The Paris-Nord Exhibition Centre will be home for a week for 1,500 exhibitors from 40 countries. From 23 to 28 April, it will host the 2018 Intermat show, with the World of Concrete Europe show running alongside it for the second time.
Intermat is organised by: events organiser Comexposium; CISMA (the French association of equipment manufacturers for construction, infrastructure, steel and handling equipment industries); and SEIMAT (the French association of international civil engineering, mining, construction and hoisting equipment industries).
A new feature for 2018 is the structuring of the show into four specialist area hubs. There will also be theme ‘villages’ concentrating on technological innovations. A series of talks and round tables on topical subjects in the industry will be on the agenda of each theme zone.
The four hubs are labelled: Lifting, Handling & Transportation; Earth moving & Demolition; Roads, Minerals & Foundations; and Buildings & Concrete. The organizers said that this change was prompted by demand.
The Lifting, Handling & Transportation hub will see a concentration of those subjects, featuring machines, accessories, components, services and new technologies.
The Building Smart Village will see the BIM (building information modelling) Cabin, and it will look at digital design and robotic manufacturing, as well as digital tools on the work site.
The final theme village is The Start-up Eurovia Village. Eurovia, part of French contracting giant Vinci, is a partner in the Start-up Village, which will have 13 selected start-up firms displaying their innovative solutions. These will include rental platforms, site supervision applications, equipment management and robotic solutions.
The Thursday of the exhibition has been designated Intermat Rental Day. The organizers said that construction equipment rental is no stranger to the digital trend sweeping across the distribution sector in general. A key element will be a look at the major factors that will drive change in the rental business over the next 10 years, and how each country is preparing for it.
We invite you all to Potain’s 90 years anniversary on Wednesday 25th of April.
International Cranes and Specialized Transport Volume 26, Number 4, January 2018