Pillar crane market: where will the boom turn?

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Pillar crane market: where will the boom turn?
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Why are federal-level construction sited equipped with Chinese machinery when domestic models are available? What is the difference between Russian pillar cranes and their foreign analogs?

The domestic market for construction equipment production is on a ‘burning platform’ at present, as is pillar crane production. According to expert assessments, 60-65% of such machines currently operating on Russian construction sites are of foreign origin.


Only three left…

From 2011 to 2014 Russian producers enjoyed definite growth (in 2013, for example, 200 pillar cranes were produced) but growth very far behind Soviet levels: 4,000 units a year. Besides this, average prices for domestic cranes above 5 tons have gone down by more than 14%, from 12m to 10m rubles.

It is clear that such volumes of production cannot meet constructors’ demands and there will long be a need for imported pillar cranes. However, over the last year the demand for both Russian and imported production has decreased. The construction volume drop has influenced the purchasing capability of construction organizations.

Currently there are only three producers of pillar cranes: in Niazepetrovsk (in the Chelyabinsk district), with a well-developed dealers’ network, in Rzhev (in the Tver region) and Strommashina in Kohma (in the Ivanovo district). Their products are exported to Kazakhstan and were being delivered to Ukraine until recently. According to Roman Makhaikov, marketing director of JSC Srommashina, Russian producers produce a whole assortment of pillar cranes, including specific types, for all kinds of construction.

The quality of domestic production is quite acceptable, the safety factor is 30%, and operational terms are calculated at 16 years on average. The trouble is that this machinery is produced only to order.

The Ministry of Construction does not know who produces cranes in Russia


Ministry officials have a specific attitude toward the producers.

— Not so long ago there was a tender for equipment procurement for the construction of a stadium in Rostov-on-Don for the 2018 World Cup, Roman Makhaikov says. — How it was held nobody knows, but the result was that a Chinese company won the tender, and 16 cranes from China now operate at the construction site.

The three domestic enterprises could have easily delivered their product for the construction, Roman is sure, but they did not take part in the tender – and not by their own choice. According to him, Ivanovo’s crane producers were told: “We know nothing of your enterprise. It is a private company and you should have warned us beforehand that you exist”.

The producers took their case to the Federal Antimonopoly Service but were told that there were no legal violations in the tender documents. This is at a time when Russian producers of pillar cranes badly need orders.

— We have not produced pillar cranes for two months because there is no demand, Roman Makhaikov told us. — And before that, we were producing three cranes a month.

Producers think that both a general drop in the construction sphere and correlated financial problems have impacted upon the fall in demand. Being afraid of non-repayment, banks have stopped lending money to constructors for equipment procurement. Some construction organizations are ready to borrow money at any interest rate, but banks are ignoring them.


Chinese equipment is different

As we have already mentioned, imported equipment has a large market share on the construction sites of the country.

— There is German, Chinese, French, Italian, Spanish and Portuguese equipment on the Russian pillar cranes market, says Alexander Ivanov, a top manager in one servicing company. — This includes cheap Chinese cranes for one-construction-only and with a cost of 8-10m rubles.

The construction completed, the crane is cut up for scrap metal, and its cost is included in the cost of the object under construction. Besides these cheap models, China produces pillar cranes of the same quality as and price as their European analogs.

The use of Chinese construction machinery has been increasing all around Russia. This is not surprising, as China takes the third place in the world in construction equipment production volume after the USA and Japan.

Speaking about European companies, our constructors who buy foreign machinery prefer such companies as Liebherr and Zeppelin (Germany), Potain S.A.S (France), Comedil and ALFA (Italy), Comansa (Spain), etc.


Advantages of pre-owned equipment

The current price of a high-rise pillar crane for domestic production is 10-14m rubles on average. A similar European crane will be 2 or 3 times more expensive. Sometimes, trying to save money, constructors buy cheap secondhand cranes which are two or three times cheaper than new ones. However, one must be prepared for significant expenditures for repairs and long waits for the delivery of joint replacement parts.

Nevertheless, foreign cranes are in demand with constructors.

Until recently, such equipment was mostly delivered from abroad and only 25% was new. The demand for used equipment is understandable: in common operational conditions it is more reliable, ecologically friendly and energy saving than Russian analogs and it has higher quality of production.

But those who use it should remember that the operational temperature is above -25°C, and lower-temperature-adapted versions are 25—30% more expensive.

…our cranes are not afraid of the cold

Russian elevating mechanisms are better adapted for operating in severe climatic conditions. They can work at temperatures below -40 °C and with humidity of 80—100% and this does not influence the price as, according to Russian standards, the steel used in pillar cranes must be able to withstand such temperatures. Imported cranes, when operated in such extreme conditions, have a reduced term of cable exploitation, electrical networks and electronic durability. Nevertheless, Rostechnadzor allows such equipment in Russia, giving the argument that such temperatures are rare.

It should be noted that the most in-demand pillar cranes on the Russian market have a capacity of 8-12 tons, but constructors have cranes with a capacity of 20 tons and even more.

Import replacement without orders

Talking with the producers, one understands that import replacement, so much discussed now, has been happening in the production of such machinery for a long time. Ivanovo pillar crane producers, having their own design bureau, can design and produce them from domestic components, with the exception of only rotation crowns, which are produced in Slovakia by the PCL company (by the way, their products are used by famous foreign brands).

Of course, the producers of pillar cranes see the prospects for their development as being connected with the situation in the construction sphere on the whole, which leaves much to be desired. But machine builders must think about the development and output of new equipment and the use of modern methods of attracting customers.