In Sweden, automotive producers Scania, Volvo and Kalmar have been thriving, and the steel producer SSAB has seen unprecedented demand for its products, such as the high grade Weldox steel, the preferred material for the telescopic booms of mobile cranes.
In Finland, the unstoppable Nokia is closing in on a 40% share of the worldwide mobile phone handset market, continuing to gain market share in a still growing market. Shipbuilding and forestry equipment production are also surging ahead.
On the back of these industries there is good demand for industrial cranes and related services. The only problem, says Walter Heinrich, crane technology specialist with Inspecta Sweden, the region’s leading inspection company, is that customers have to wait a long time for delivery. “The market is over-heated. Swedish industry is running very fast today. They are expanding and need new cranes but there are not the cranes available,” he says.
Part of the problem, Heinrich says, is the lack of local crane producers. “There are no Swedish crane manufacturers any more,” he says. “Twenty five years ago there were a lot. That’s part of the problem for the future.”
Coupled with the decline in the number of crane producers is the decrease in the number of crane experts. “Previously there were a lot of people in the industry who knew what crane quality they should have, but that is declining,” says Heinrich, who has 43 years’ experience designing and inspecting cranes.
Scandinavia’s crane industry giant is, of course, Konecranes. Aside from that, the competition comes mostly from the German producers such as Demag, Abus and Takraf.
The rest of Scandinavia has also been experiencing an economic boom. “Norway, they have the oil so they are the Saudi Arabians of Scandinavia, Denmark is going very fast and also Finland,” says Heinrich.
Erik Nielsen, sales manager of Danish Crane Building, confirms the accuracy of this picture in his country. “The overhead industrial crane market in Denmark is expanding a lot,” he says. He says that his company has “won some interesting big crane orders for delivery within 2008”, although contractual requirements prevent him giving details yet, he says.
For the region as a whole, Konecranes offers further confirmation of economic health. “During the last two to three years the economy in the Nordic region has been growing and we have benefited from the growth of the market,” says a spokesman.
In October 2007 Konecranes reported, in its third quarter financial results statement, that it expected 2007 sales to be up nearly 20% on 2006, making it another record year. Even stripping out the impact of the 2006 acquisition of Morris Material Handling, sales growth was around 14%. Although Konecranes is a global player, the Nordic region remains important to it. Grouped together with Eastern Europe in the company’s accounts, the region accounted for 17% of group sales in 2006.
Significant Scandinavian orders for Konecranes in 2007 include a BoxHunter ship-to-shore (STS) crane with long-term service agreement for the Finnish container terminal operator Steveco Oy for delivery to its new container terminal in Vuosaari, Helsinki, during the autumn of 2008. Steveco also placed an order for three units of Konecranes’ new straddle carrier for a container terminal at Mussalo in Kotka.
The overhead travelling crane part of the business has been busy refurbishing 12 cranes at the Ringhals nuclear plant in Sweden to meet new safety standards. The cranes were originally built and installed by predecessor company Kone in the 1970s. The modernisation includes replacing the existing hoist trolleys and all electrical components.
Ringhals engineer Thomas Hagman explains: “The new trolleys have a number of functions, all with the purpose to make the lifting machinery single failure proof. For example new trolleys have two individual steel wire ropes, emergency brakes on the wire drums, and fall protection of drums and sheaves in case a shaft should break.”
The cranes, which have lifting capacities from 100 to 135t, now have variable frequency motor control technology, remote controls and load path restriction systems to limit the crane movements to defined areas.
The project began in 2006 and to date 11 of the 12 trolleys have been replaced. The last trolley will be installed in 2009, Hagman says.
SSAB’s steel plate division has also been upgrading its cranes, replacing its old Åkerströms Remotus 5000 crane remote controls from the old, which these days can be hard to service and find parts for, to Åkerströms’ new Remotus Mercury system.
Konecranes says that the strength of manufacturing industries has more than compensated for the impact of the closure of pulp and paper mills in Sweden and Finland. It is also benefiting from the continuing trend towards outsourcing crane services, a key target market for Konecranes.
In fact, Konecranes is expanding and diversifying into the service and repair of other industrial machine tools. In July 2007 it signed agreements to acquire two machine tool service (MTS) companies, Kongsberg Automation in Norway and Reftele Maskinservice in Sweden.
Kongsberg Automation specialises in preventive maintenance and modernisation of computerised numerical control (CNC) machine tools. It becomes Konecranes’ first MTS unit in Norway and will work closely with Konecranes crane service units in the country, the company said.
Reftele Maskinservice specialises in the servicing and repair of printing presses and forms a new MTS unit in Sweden for Konecranes together with Sajo Service, which was acquired in 2005.
Another acquisition within the region in July saw Konecranes take over Savcor One, a Finnish container handling software and automation specialist whose customer base includes more than 20 container ports around the world. Jarmo Juntunen, Konecranes’ director in charge of ports, explained at the time of the acquisition that Savcor One’s technology “is the link between the different port vehicles such as RTGs (rubber-tyred gantry cranes), straddle carriers and lift trucks.”
Juntunen added: “This acquisition enables Konecranes to offer complete solutions to its customers. It also gives access to the modernisation market both on Konecranes’ own equipment and for other makes in the yard. In addition, Konecranes will be able to offer DGPS-based automation systems for the existing equipment of customers and therefore generate new business.” There was further mergers and acquisitions activity across the lifting industry in the region during 2007, including the purchase of ABAS Crane and Aker Brattvaag Winch from the Aker group by offshore winch manufacturer Odim ASA in a deal worth NOK 80m ($14.9m).
ABAS Crane, based in Aukra on Norway’s west coast, produces cranes and lifting gear for ships and offshore installations. Aker Brattvaag Winch, in Ålesund, produces frequency-controlled AC-powered winches for trawlers, supply vessels and industrial applications. Both companies outsource production to eastern Europe.
Odim chief executive officer Jogeir Romestrand said that “an important objective for the acquisition is to launch a crane which can increase the efficiency of deepwater marine operations.”
A niche player based in Finland and finding increasing success across the region is Erikkilä Nostotekniikkaa, which specialises in light crane systems under 2,000kg capacity and ergonomic material handlers. In the financial year to 31 March 2007 it saw its turnover rise 33% to Euros 7.0m and profits up 36% to Euros 480,000, helped by a 50% increase in sales through distributors.
Managing director Juha Erikkilä says there has been similar growth in the current financial year, with sales up close to 40% in the neighbouring Baltic states where it has a strong presence in the overhead bridge crane market.
Looking ahead to prospects for 2008, Juha Erikkilä says: “We expect light cranes sales to increase after many good years of bridge crane sales in the Nordic countries.”
On the back of this success the company has already expanded its production facilities in Masala in Finland and Tallinn in Estonia. In September 2006 it moved production of its Prosystem jib crane from Estonian to Finland. The following month it set up a subsidiary in Ängelholm, Sweden.
More recently the Erikkilä group has separated its activities involving manipulating equipment under 300kg capacity into a discrete business sector through its Baltic subsidiaries. “We have selected the highest quality manipulating lifting equipment products to complete our own production to continue best possible customer problem solving services,” says Juha Erikkilä.
Erikkilä says that Sweden leads the way in the use of manipulating equipment, balancers and personal assist devices because salaries are high and employment law is rigid. “It is better to save one yearly employee cost (which you probably do not get) and invest in manipulating equipment,” he says. The market for this type of equipment is still under-developed in other countries across the region, he says.
Among several large projects for Erikkila in the past year was the supply of 30 light crane cells to the engineering company Danfoss in Finland for the assembly of heat transformers. The cranes, ranging from 250kg to 1,000kg safe working load, are all free standing and designed to allow a 10t overhead crane hook pass inside the area.
