Industrial crane suppliers benefited on the back of the success of the mining companies. Sales at Sydney-based Konecranes Australia grew 30% in 2007 and 40% in 2008, says Warren Ashton, sales and marketing manager, while the company’s Perth operations grew 500% over the past four years.
At Melbourne-based Austin Hoist & Crane, growth has been even more remarkable, with 2008 sales being 85 times higher than they were in 2003. Growth of 44% in 2004 was followed by annual growth rates of 136%, 173%, 240% and, in 2008, 327%, the company says.
While Austin is confidently predicting no slow down in its growth trajectory, others can see enquiries slowing down. A spokesman for Demag Australia, for example, says: “There are certain identifiable segments that have slowed dramatically. Particularly in mining, steel making and construction segments we have seen a significant decrease in enquiry and order rates so far this quarter, compared with the last two quarters of the 2008 calendar year. Some activity remains in steel handling and special purpose manufacturing.”
Warren Ashton says: “There are several sectors slowing due to the global financial crisis, most notably the steel, paper and mining industries. Power and water industries are strong, given that they are largely government backed.”
The government is also planning more major infrastructure investment. Additionally, although China’s economic growth has slowed, there is still significant demand for Australian raw materials. “We believe this has particular implications for the hoist and crane industry which, in general, should experience a satisfactory level of demand,” says Barry Hartney (pictured, above), director and general manager of Austin Hoist & Crane.
Overall, therefore, Australia’s crane industry does not appear to be as badly hit by the global financial crisis as in certain other countries.
Tom Eilbeck, owner and managing director of crane builder and Abus distributor Eilbeck Cranes, says that despite the slow-down of the mining sector, his order book remains full for most of 2009. However, competition in the crane industry has become tougher and margins have been hit by the weakening of the Australian dollar, making components sourced in Europe more costly.
Konecranes’ Ashton acknowledges that his company is feeling the impact of the global economic crisis, but adds: “However, as our business has a strong service base we are still looking at growing in 2009. The economy seems to be wait and see, but signs are there that it shouldn’t hit Australia as hard as other economies.”
While mining has been a big driver for the crane industry, Ashton says, and Konecranes has seen an increase in new crane sales, most of the company’s growth has come from taking market share in the service business. Konecranes’ target in 2009 and 2010, Ashton says, is to maintain the growth of the service business, albeit at a slower level than the past five years, and maintain new equipment sales at 2008 levels.
In recent years, several of Konecranes Australia’s 24 sales and service locations have moved to larger premises to handle future growth. “We invest heavily in training our field technicians to provide the best service to our customers,” Ashton says. “Skilled labour has traditionally been a problem. However, with increased training and safety awareness and the current uncertainty in the market we are seeing better retention rates.“
Austin Hoist & Crane has outgrown its premises in the where it is which is working at full capacity on orders of up to AUD24m a year. It already outsources fabrication work to two subcontractors in regional Victoria and is now negotiating with a third, in the Latrobe Valley, the centre of Victoria’s power generation industry.
“New regional facilities are adding strength and capacity and are currently being further fine-tuned, as we intend to consolidate and spread the network with a concerted market development drive in Australasia and potentially into Asia,” says Hartney.
Already a distributor for Bulgarian hoist and crane manufacturer Balkancarpodem, Austin has recently become a distributor for Morris Material Handling of the UK. Not only does Austin sell Morris equipment, it is also progressively taking on board some of Morris’s operating systems and software.
Hartney attributes Austin’s revival to the appointment four years ago of Borgers Corporation, a business development consultancy, which continues to provide marketing and sales support to the company. Austin Hoist & Crane has been in business for more than 100 years but, with no in-house marketing or business development capability, it was struggling until Borgers came on board.
Borgers managing director Alex Ruscuklic explains: “Borgers was retained to examine the business and its prospects, prepare a medium and long-term business plan and equip Austin to cope with a highly competitive future in a somewhat frenetic industry. This way, Austin can make the stuff and we can market it. The plan worked and the results are coming in.”
Demag is also in growth mode in Australia. New branches in Mackay, Queensland and Wollongong, New South Wales bring its total number of branches to eight, with a distributor network covering less industrialised locations.
Similarly, Eilbeck Cranes is also increasing its production capabilities, with construction to start this year on a new factory in Mackay, North Queensland (see page 19).
