The countries of Scandinavia and the Baltic states are good and important markets for lifting equipment producers. But it is not a homogenous region. Each country is quite distinctly different, with its own profile. The countries of Scandinavia are mature markets, while the Baltic states of Estonia, Lithuania and Latvia are still in growth mode, having only comparatively recently moved from Soviet sovereignty to beneath the European Union umbrella.
In Norway, where a significant oil industry has bolstered the economy in the face of the global downturn of recent years, there have been numerous developments in the lifting industry.
Crane and winch manufacturer GMC Produkt is now merged with lifting equipment producer Scan Tech, having been by acquired its UK parent company James Fisher in 2010.
Another UK lifting company active in the oil sector, Red Rooster Industrial, has opened a Norway branch. Its new Stavanger depot offers air hoists and other equipment for sale or rent.
More recently, Abus representation has been agglomerated and expanded. Up until January 2011, Industrikran Norge (IKN) was effectively a one-man operation, importing Abus equipment from Germany as sole authorised agent, and selling it to a network of crane-builder dealers.
At the beginning of last year, however, IKN managing director Grunde Tveit brought together three of these local representative companies into a larger, merged IKN, as the first step in a plan for restructuring and expansion.
IKN today has offices and staff in four locations along the Norwegian coast, with headquarters in Stavanger, and a newlybuilt crane factory in Kristiansund.
Marketing manager Finn Gjerde says: "The first year has been challenging in terms of organisation and routines, but we are satisfied and improving. 2011 crane sales have met our expectations and forecasts and we are steadily gaining ground in service and repairs."
As it grows, the company is looking to recruit more crane technicians to grow the service side of the business.
Gjerde said that market demand remained stable in 2011, mostly driven — either directly or indirectly — by the oil and ship-building industries along the coast.
IKN’s projects in its first year as a crane builder rather than just a sales company included an 80t giant crane for Vigor, a company that produces process vessels for the offshore industry. The 34m-span crane is for a new factory that Vigor has built near Kristiansund. IKN also supplied a pair of 40t SWL cranes for the same production hall. The cranes are equipped with radio remote controls from IMET of Italy, for whom IKN is also exclusive distributor in Norway.
Another interesting project was the supply of a 75t SWL, 12.5m-span crane to the machine hall of an underground power station in Høyanger. It was challenging to install because of the lack of space.
Among orders currently being worked on at IKN is one for a manufacturing company that is building a new factory that has ordered 40 cranes. Gjerde is not yet free to disclose who this customer is, but all the cranes must be delivered in the next month or two.
"We are optimistic for 2012 and do not expect any major shifts, whether in demand or competition," he says. "Our goal is to ascend the ladder as one of the four major crane suppliers in Norway."
The other three majors in Norway are Konecranes, Demag and Munck — the latter being Norway’s leading indigenous crane producer.
Recent major projects for Munck include a huge 185t crane for a hydroelectric power station. The customer is Eidsiva Energi, one of the leading energy producers in Norway. The new crane, installed in February, also has a 15t auxiliary hoist, a 5t monorail hoist running under a main girder and a man-riding hoist for inspection and service work.
German pneumatic hoist specialist JD Neuhaus is also active in Norway, since its equipment is tailored to the needs of the oil and offshore sector.
As this magazine reported in January, JDN recently delivered its largest ever crane system to Westcon Lofteteknikk AS (WCL) of Norway. The 80t SWL semiportal crane, comprising an A-frame supporting twin overhead track beams will be used on an offshore drilling rig.
The 7.5m span crane has an EH 40-H monorail hoist on each beam that can lift 40t independently or 80t in tandem. Four hydraulic drives provide crane travel.
The crane has been designed to comply with offshore operation, at temperatures down to -20°C, and with an explosionproof classification of Ex II 3 GD IIB T4.
Sweden also saw a definite upturn in crane industry activity, according to Abus Kransystem AB’s Tony Wittgren, only to tail off again when the euro crisis kicked in. "The situation is very unclear and the industry feels insecure about what to expect from the near future," Wittgren says. The result, he says, is customers delaying investment decisions until market confidence is restored. Even with negative sentiment around, Wittgren says business remains "on a fairly good level so far, even if I wish it could be a bit better".
A bright spot in Sweden is the mining sector, and companies that supply to it, while car manufacturing is struggling. Saab is in receivership and next year Volvo is closing its Uddevalla plant that produced 10,000 cars in 2010.
In mature markets like Sweden, companies are looking to service agreements to generate growth. Abus agent Lyftsystem KAMAB has taken over servicing cranes and lifting platforms for Stockholmståg, which runs the rail service in the capital
Wittgren says: "We have steady sales with Abus products but it is in the service segment that we see the fastest growth, not only with this contract but all over Sweden." To meet the growing service market, Abus Sweden has taken on an additional five technicians, which represents a 5% growth in staffing levels.
Abus is aided by having the JJ Group as its representative in Sweden. JJ (Ingenjörsfirman Jan Johansson) is a group of ten privately owned companies, including: Procranes AB, which is strong in crane modernisations; Lyftsystem Kamab; LB TeknikLyft and LyftTech. JJ is also active internationally. For example, the firm works for Swedish companies installing cranes in Volvo plants in Poland, India and Tunisia.
As well as Abus, JJ companies also have agreements with Street Crane and SWF. SWF benefits when equipment is required that Abus does not readily offer. For example, SWF currently has an order to supply a 150t crane kit with one of its new CRABster winches — a stripped down version of Konecranes’ Smarton. This crane will have a 25.9m lifting height, 16.4m span, 8t auxiliary hoist on the bridge and another 8t auxiliary hoist underneath. Delivery of this crane is expected in spring 2012.
As previously reported, the crane market in Denmark is starting to field inquiries had ground to a halt in 2009. Construction of the €4.8bn Fehrmann bridge to Germany is sure to generate plenty of crane orders this year.
Danish Crane Building (DCB), one of the country’s leading crane builders, has recently supplied the biggest crane that it has ever produced. The 140t capacity overhead crane, using a Verlinde hoist, was built for a wind turbine factory on the Lindø Industrial Park near Odense.
DCB technical director Kristen Jensen says that the new crane doubles the lift capacity in the plant and the building structure also had to be reinforced. There is not a big market for cranes of this size in Denmark, but with wind turbines getting ever bigger, this represented an opportunity for DCB to expand its portfolio of work. "Our lifting capacity is now increased to as much as 250t and we can span up to 40m in one single span," says Jensen.
In Finland, the crane business is of course synonymous with Konecranes, which has had its difficulties in the past year. Konecranes’ share price was above €30 for most of the first half of 2011 but began to slide in May, dipping to below €15 by October on the back of an expected recovery being stubbornly slow to materialise. In February 2012 the share price had climbed back to around €23.
Konecranes did report reasonably strong growth in sales in 2011, up 22% on 2010 to €1.9bn thanks to a strong fourth quarter, but profits were down. Operating profit, including €10.3m restructuring costs, was €106.9m, which represented a 5% fall on 2010’s profits. "All in all, we are satisfied with our top-line growth and market share in 2011, but not with the profit," president and CEO Pekka Lundmark said when announcing the results in February.
While Konecranes’ results are a reflection of global rather than domestic conditions — Finland accounts for but a very small fraction of its operations — others confirm that Finland was hit hard by the downturn but is now rebounding.
Aimo Leppinen, director of Finnish crane builder Algol Technics Oy, says workload is down as customers defer investment decisions. Workload halved in 2010, for both standard and process cranes, and last year was only able to come back by approximately 30%.
Core markets for Algol are the metal industries of Finland and the health of these companies is very dependent on the global picture. "The competiveness of these companies in global markets is very important for making investment decisions in Finland," Leppinensays. For this reason, it is difficult to make forecast for the year ahead.
Leppinen adds that the service business is becoming an increasingly important growth area for Algol too. "We have strengthened our organizational skills for selling more service and reliability to our customers," he says. Leppinen explains that Algol has a life cycle profit management project to help customers get maximum benefit from their material handling operations.
Algol is the agent for Demag in Finland and so is very capable of meeting industry demands for technical process cranes. It also represents Demag in Estonia and Latvia, as entering the Baltic states via Scandinavia is quite a common business strategy. Leppinen reports that business in Latvia is even worse than in Finland. In Estonia, by contrast, the economy has seen stronger growth and consequently there has been some activity in crane installations.
Lithuania-based Strele Industrial is the Abus agent for all three Baltic states. In Lithuania it claims a 40% market share in standard cranes, says director Tomas Kavaliauskas. Kavaliauskas says sales doubled in 2011, as a result of stalled projects re-starting and several smaller crane companies leaving the market. In total Strele Industrial built 50 new cranes last year. The main industries in Baltics states driving crane demand, he says, are the manufacture of steel structures, mechanical engineering, building materials producers, energy and shipyards.
In the Soviet days, most cranes and industrial machinery in the Baltic states were Russian made, although Polish and Finnish influences have also always been strong in Latvia and Estonia respectively. These days there is not so much demand for Russian machinery. "The crane producers from Russia are not popular in our area because quality, reliability, longevity and service after selling are not suitable," Kavaliauskas says. "Our main competitors are from Scandinavia."
The Baltic region has even become an entry point into Russia for some European crane suppliers. SWF sells approximately €1m worth of equipment a year the the Baltic countries, helped ignificantly by its ithuanian agent, Baltic Cranes Industry, doing "phenomenal business", exporting equipment into Russia, says SWF regional sales manager Ian Robinson.
There is at least one Russian company still doing business in the Baltic states, however. While its name might suggest otherwise, Baltkran is in fact Russian, based in Kaliningrad. Among Baltkran’s current projects is the modernisation of a gantry crane at the container terminal near Vilnius for the Lithuanian railways. The 20-year-old crane is getting a capacity upgrade and being fitted with a telescopic spreader to enable it to switch easily between 20ft and 40ft container handling.
Northern Europe as a region has suffered as much as anywhere else in the world since the onset of the global credit crisis and the subsequent traumas of the Eurozone. But there are still plenty of industries for whom work must go on, and while crane activity is reduced from the peaks of 2007, there are grounds for optimism that it is on an upturn.
