These are busy times for Munck Cranes, Norway’s leading crane and hoist manufacturer. It has just won its biggest contract for 15 years, the last of its third generation hoist range is due on the market imminently, and it is bedding- in the June acquisition of Dreggen. In fact, the company is enjoying the kind of strong financial health that is hard to find in the industry these days.
The major contract, worth $5.3m, is for the supply of service cranes for the new foundry and electrolysis building for Hydro Aluminium’s $650m upgrading of its Sunndal aluminium production facility. It is a contract, says Munck managing director Sverre Arnesen, which will secure employment, and increase the order back log and indeed also strengthen Munck’s position as “the leading supplier of special cranes for the process industry in Norway”.
The contract was won in open tender against bigger European competitors such as Demag and Konecranes. Arnesen thinks Munck triumphed not just on price but on technical know-how to tailor cranes to meet the customer’s demand, and also on the ability to meet delivery demands. The first part of the Hydro Aluminium contract is scheduled for delivery in March 2002, a package comprising four units of 2 x 25t SWL cranes. The following month a 20t/5t SWL crane is to be delivered. The major piece of kit, one 2 x 105t SWL crane, has to be delivered in April 2004. There is also an option for four units of 20t/5t SWL cranes and a 20t/5t crane.
The cranes are being tailor-made to strict specifications as set out by Hydro Aluminium, with all the latest control systems to minimise maintenance costs. The cranes will form part of its production line whose output is expected to be increased to more than 300,000t per year.
The company Sverre Munck A/S was founded in 1924 by Norwegian electrical engineer Sverre Munck. It began life as a trading company with products ranging from fuses and light bulbs to escalators, elevators and foreign-made electric wire rope hoists. The company grew from 30 to 300 employees in the 1940s on the back of an order from a local bus company for 18 trolley buses. Around the same time Munck began production of its own hoists and industrial cranes.
In the 1950s and 1960s subsidiary hoist and crane companies were established in the USA, Canada, UK, Sweden and Belgium, and a network of agents was established in other parts of the world. Today Munck also has licensee partners manufacturing, marketing and servicing Munck cranes in Hong Kong, Singapore, Thailand and Saudi Arabia. Munck also has its own subsidiary company in Denmark, Munck Industrikraner AS, based in Århus.
Over the years the first generation of Munck hoists was subjected to continuous improvement. The second generation of electric wire rope hoists was gradually introduced in the early 1980s until the entire family was completed in 1985. Two years ago the first of the 31 Series, the third generation, came on to the market. That was a compact 3.2t SWL hoist. By the end of this year the biggest hoist in the 31 series, lifting 80t on four falls of rope, will be available, Arnesen says. This represents the culmination of the recent modernisation programme.
In addition to its own wire rope hoists, Munck also has the rights to sell Morris’s S3 chain hoist, which it badges as the Munck S3. Arnesen speaks highly of the S3 and says the arrangement works well. He would not allow Munck’s own wire rope hoists to be badged by anyone else, , however, because it would dilute the Munck brand which he wants to promote, he says.
Munck’s headquarters are in Bergen, Norway, where it has an 8,000m2 production and storage area as well as offices. It also has 12 service centres and branch offices located throughout Norway. The company is owned by The Furnes-Hamjern Holding AS.
In June Munck acquired a majority shareholding in Bergen’s other established crane manufacturer, Dreggen. The deal represented a major consolidation of Norway’s crane manufacturing industry.
Munck bought 66% of Dreggen Crane and 63% of Dreggen A/S and Dreggen Engineering A/S. The remaining shares are still held by the previous owners, the Gullestad family, and Tormod Gullestad remains the manager of the Dreggen Companies.
Where Munck’s strengths lie in industrial EOT cranes, including such niches as the paper industry where it has had particular success, Dreggen brings a complimentary product range serving the offshore and marine sectors. Dreggen produces monorail cranes, engine room service cranes for ships, shipboard gantry cranes, davits and deck cranes.
The two companies together now have 185 employees – with about 40 coming from Dreggen – and an expected turnover in 2001 of NKr230m ($25m).
Arnesen says that Munck and Dreggen are now engaged in research to develop common componentry for the two product lines, to squeeze out cost savings wherever possible and to maximise the benefits of the takeover. Not much has been achieved yet, he admits, but it is early days and this work is expected to take six to 12 months.
The quest for manufacturing efficiencies was only part of the justification for buying Dreggen, though. With a broader product line Munck is better placed for further international expansion. It has also strengthened its domestic position.
“Market conditions in Norway are very satisfactory,” Arnesen says, “and internationally we feel we have a stable market. We feel that we can increase international sales but it will take time.” He adds: “And with the new 31 Series hoists we have the product line to go forward.”
