Manufacturers of electric overhead traveling (EOT) cranes have been among the beneficiaries of the rapid increase in steel demand. The sharp increase in the number of steel plants countrywide has triggered a boom in EOT crane sales in India, while export orders from markets in the Middle East, Africa and Asia also are strong.

“We have seen a drastic change in steel demand. There are about 2,000 steel companies in India now, both small and large,” says Zubein Buhariwalla, general manager of Federal Engineers Co Ltd, one of India’s leading EOT crane manufacturers. “The size of the steel plant furnaces is growing so the EOT crane tonnages are going up. Previously EOT cranes of 20 to 25 tonnes were enough to equip mini steel plants, now it’s 50 to 75t. Steel plants do not use induction furnaces of less than 20 to 25t now.”

“Now the trend is for heavier cranes. The average size is 50 to 70t. We also supply other industries requiring overhead cranes like the power industry and heavy engineering companies, also Goliath cranes for the mineral mining industry,” Buhariwalla says.

Federal Engineers supplies many steel plants that are equipped with seven or eight EOT cranes. Heavier cranes ranging from 65 to 76t are installed to work over the furnace area while smaller cranes ranging from 10 to 35t are used for billet handling, changing scrap handling equipment and other tasks. Buhariwalla noted that some steel plants keep scrap metal supplies in an outside and can use Goliath cranes for scrap handling.

India’s EOT crane market has seen rapid growth during the past five years, with the total value of crane sales rising at compound growth rate of 34% annually. According to Federal’s estimates, the value of the EOT crane market rose from US$46.8 million in financial year (FY) 2001/2002 to $107.3 million in FY 2004/2005. Based on the current surge in sales, industry forecasts suggest that the EOT crane market could grow by almost 50% during the current financial year, with total EOT crane sales of US$151 million forecasted for 2005/2006.

The domestic market

Rapid domestic demand growth continues to drive most of Federal’s sales growth. About 90% of the EOT crane production is sold to local customers while about 10% are exported to the Middle East, Africa, Russia and some developing Asian countries.

Established in 1973 as a private partnership, Federal Engineers today owns five factories in Mumbai that employ 100 staff. Located within a 5km radius of each other, the factories manufacture different EOT crane parts that are supplied to the company’s main plant for final assembly.

“We produce from 11 to 14 cranes a month depending on the size and capacity of the units ordered. Our production capacity is 120 to 125 cranes a year,” Buhariwalla says. “We are building another factory in Thane district next to Mumbai to open this year. Most fabrication of heavy girders will be done there. Both our Indian and export markets are growing. We supply the whole of India as cold rolled steel plants are being set up everywhere. Steel prices have risen three fold during the past two years. That’s why we are seeing so many steel plants being set up.”

Federal manufactures heavy duty double girder EOT cranes that mostly are installed and used inside covered buildings.

Although the company’s cranes can be used in workshops, Buhariwalla pointed out the cranes tend to be more expensive than regular hoists and consequently are rarely selected for workshop use.

A price advantage means that Federal faces little competition from foreign EOT crane manufacturers.

“We are cheaper than special design cranes from European companies, but dealers here try to sell standard imported overhead cranes (hoists) for special use which do not work like our Indian design cranes,” he says. “Steel plants require Class 3 and Class 4 cranes. In India every EOT crane company makes a designed crane, not a unitised block crane, and this Indian crane system is easier to maintain.”

“The advantage of the design system is that if the motor, for example, burns out then you only replace the motor while with European cranes the whole unitised block has to be replaced in such a case.”

Indian steel companies prefer Indian made cranes for their heavy duty ruggedness and long lifespan. The trade off is that Indian cranes are not as high-tech in appearance, a factor which is not so important in a value-for-money market.

The average EOT crane life in India is 25 years. “It’s not a use-and-throw-away market like Europe and the US,” Buhariwalla says. “Also, Indian EOT cranes are over-specified – usually by 1.25 times more than the tonnage they are due to lift.

“Our production is according to Indian (IS) standards in India which specify 1.25 times over capacity capability. The aesthetic look of our cranes is not up to the European cranes. Shot and sand blasting on the crane girders is only at the client’s request while in Europe that finish is standard,” he says.

All EOT cranes supplied to the steel industry are cabin-operated while cranes supplied to heavy engineering customers usually are flow operated. Safety controls fitted to the cranes include two limit switches for operations in hoisting mode; lever type switches for travelling mode; an overload release facility; and spring buffers. Anti-collision infrared sensors are available on request.

The crane production cycle has shortened considerably since Federal started production three decades ago. “We can do computerised crane design in one day. Previously it took three weeks to design a crane manually,” he says. “We do all sub-assembly and final assembly in our own plant. We have a fully-fledged design team for cranes.”

All crane parts are made in India at present, although Federal plans to import brakes for larger EOT crane units as part of the company’s ongoing crane upgrade programme.

Brakes for most of the company’s EOT cranes are purchased from an Indian supplier that manufactures under licence from Galvi of Italy. In future, however, Federal has decided to buy brakes for larger cranes direct from Galvi in Italy.

“We will buy them from Galvi’s Italian plant soon for 60t EOT cranes and upwards as they are higher specification. We are using them now on a 65t crane for an Indian steel plant,” Buhariwalla says.

“The Italian brakes will be used only on steel plant cranes. We will also buy disc brakes from Galvi for higher capacity cranes of 80t and upwards. The cost of Galvi’s brakes is three times the cost of Indian brakes. We are stressing on improving our quality more and more.”

Federal is upgrading its larger cranes in preparation for further anticipated growth in large EOT crane sales in future.

The company anticipates that the main driver of India’s expanding EOT crane market over the next 10 years will be fast growing steel demand to support the forecasted huge investment in infrastructure construction and property development.

The expansion of India’s electricity industry to meet future energy demand growth will also increase the EOT crane market size along with the anticipated development of the automotive industry and vehicle component production, as well as increasing global sourcing of machined parts in India.

“Our cranes are rugged zero maintenance cranes for steel plants which work 24/7 and where no one has the time to do maintenance,” Buhariwalla says. “They only maintain their cranes if they break down. With our cranes they can do maintenance themselves if they have the spare parts. These cranes do not require special maintenance.”

Federal produces many crane parts inhouse including gearboxes, wheels, shafts and other items. Motors are bought from Alstom which has a factory in Kolkata.

“We are the only EOT crane company in India to use universal couplings,” Buhariwalla says. “The others use geared couplings with input shafts. Universal couplings allow up to 15 degrees misalignment.”

Efforts to improve product quality come at a price and customers for EOT cranes used in less demanding environments than steel plants have started to use lower cost supply sources.

Buhariwalla says: “Recently, because our product quality has increased and prices are up, customers wanting lighter duty cranes in situations where cranes are not a critical part of the operations have gone to small crane manufacturers.”

Since being established, Federal has supplied a large number of steel plants and other clients in India. Thermax of Pune is one of the biggest customers having bought about 30 EOT cranes ranging from five to 120t in capacity. Other steel industry customers include Shah Alloys of Mehsana which has installed 15 EOT cranes ranging from 10 to 80t in size, while Aarti Steels of Cuttack has bought seven 10 to 70t EOT cranes from Federal. Jindal Iron & Steel is another steel industry customer and has purchased 18 cranes ranging from 10 to 40t.

Customers in other industries include Jaya Hind Industries of Pune which manufactures heavy engineering automotive parts and has purchased seven 10 to 50t cranes from Federal. Elsewhere, Kirl Oskar Brothers of Sangli that produce pumps and valves have installed 12 EOT cranes ranging from 5 to 50t in capacity.

Exports

While Federal Engineers’ efforts to upgrade its EOT cranes are appreciated by Indian clients, the company’s cranes also are attracting growing attention in various export markets. Previously a sideline operation, exporting recently has developed into a major activity.

“Since 1973 we have produced 2,500 cranes, of which about 400 have been exported. But in the last three years our export turnover has grown quickly and exports are now 60% of our turnover,” Buhariwalla says.

“We get repeat orders from old clients, also recommendations by word of mouth. Initially, Indian consultants working overseas sent us inquiries but in the past few years we have seen foreign customers come direct to us. In most cases we are the only Indian company given consideration for their projects.”

“We assemble and test cranes in our own plant, then dismantle and ship them to the client. We advise our overseas clients to hire a local erection team as it is cheaper for them, but we send an engineer to do the commissioning. For projects in India we use several contractors, but our own engineer still does the commissioning.”

“We concentrate more on Africa, the Middle East, Sri Lanka and Bangladesh. Our main export business is steel plant cranes,” Buhariwalla says. In Asia, Federal’s main export markets are Bangladesh and Sri Lanka. In the Middle East the main markets are the United Arab Emirates, Oman, Saudi Arabia, Kuwait and Yemen, while in Africa EOT cranes are exported to Nigeria, Uganda, Sudan, Ethiopia and Zimbabwe.

“We have seen a big splurge in the Middle East and Africa. Bangladesh was a big market but now they are saturated. We have about 100 cranes in Bangladesh, which is our largest export market. Oman and the UAE are other big markets.”

“We have not supplied Europe as yet because we do not have a CE certificate. We will not be aesthetically competitive without sand and shot blasting and it is expensive to do this for just a few cranes.”

“We want to increase our presence in Africa. We see a big market growing there. Africa has a lot of raw materials and metal scrap that come to India for processing, but more processing will be done there in future.”

In Bangladesh, Federal’s clients include PHP Steels Ltd in Chittagong which has purchased seven 5 to 35t cranes, while PHP Continuous Galvanising Mills of Chittagong has installed seven 10 to 20t cranes. Other Bangladeshi customers also include Modern Steel Mills which has bought five 10 to 30t cranes, KYCR Coil of Chittagong which has installed three 10 to 25t cranes and PHP Float Glass Industries with six 5t cranes.

Customers in Sri Lanka include Melbourne Metals Pvt Ltd of Colombo which has installed four 10 to 25t cranes.

In the Middle East clients include Woofor Aluminium of Riyadh in Saudi Arabia which has purchased seven 10 to 30t cranes, Al-Jasser & Partners Melt Shop of Riyadh with four 15 to 20t cranes, while in Kuwait Al-Oula Steel has installed five 11 to 25t cranes and Kuwait Reinforced Steel has bought four 7.5 to 10t cranes.