Profile of construction works stimulates development of industry

Driven by investments in wind power generation and in the sector of oil and gas, the market for cranes has remained strong and has attracted new competitors, including for local manufacturing of a model which is increasingly utilized at construction jobsites: the RT

A more detailed analysis of the study commissioned by Sobratema, which indicates investments of R$ 1.35 trillion (US$ 771 billion) in the construction of buildings and infrastructure between 2011 and 2016, reveals a promising scenario for the segments of cranes. According to the study-survey, which covers initiatives ranging from energy projects, transports, sanitation and urban mobility to projects for the construction of hotels, industries and sports arenas for the 2014 FIFA World Cup and the 2016 Olympic Games, the market for cranes is expected to be one of the markets to benefit most by this portfolio of construction projects.

Upon sitting down to pore over the study, businessman Giancarlo Rigon of BSM Engenharia - a crane rental company - found that, although only 1.9% of the projects listed (189 works) are characterized by their intensive use of cranes, these projects account for almost 44% of scheduled investments. “This is due to the fact that such projects are concentrated in the area of oil and gas, where there is high investment in each project,” he ponders. In this area, the study shows 30 expansions of refineries and ten expansions of petrochemical plants, besides the construction of 26 drilling and production rigs.

Due to this characteristic, most of the Brazilian fleet of cranes is currently deployed at jobsites in the country’s coastal states, which are more urbanized and where the nation’s production of petroleum (offshore) is located; predominantly in the states of Rio de Janeiro, followed by São Paulo, Espírito Santo, Maranhão, Bahia and Ceará. Rigon further points out other segments of the construction industry which have an impact on the demand for cranes, such as the construction of sports arenas (that use many tower cranes), wind power generation and shipyards (see box on p.52). “On account of that, the opportunities in this market are very promising,” he assesses.

Rigon underscores that, in the last five years, sales of cargo lifting equipment - ranging from construction cranes to the mobile models and telehandlers - grew 219% in Brazil. “In the segment of hydraulic truck-mounted cranes, used most commonly in civil construction works, nearly 100% of the fleet has up to five years of use, which demonstrates the strong investments made by rental and construction companies.” He points out that the competitiveness of Chinese models, which occupied this segment of the market completely, also contributed to this renewal of the crane fleet.

Fleet profile
According to a survey conducted by Sobratema on the fleet of equipment in activity at Brazil’s jobsites, 85.3% of the hydraulic truck-mounted cranes in Brazil are rated for up to 100 tons of load capacity. In the segment of lattice boom crawler cranes (a fleet which also underwent renewal albeit at a slower pace), the survey shows that 75.8% of the units in operation have over 200 tons of load capacity. “We also observed this trend toward renewal in the fleet of tower cranes, including with the withdrawl from operation of some older units of such equipment,” adds Rigon.

To David Rodrigues, commercial director for Makro Engenharia (a company that specializes in special transports and lifting of heavy loads), what will drive and boost the utilization of cranes in Brazil are investments in wind power generation. “Analyzing the outcome of the calls for tenders released by Aneel - the government agency that regulates the sector, I found that there is an “Itaipu’s-worth” of wind farms waiting to be implemented in the country in terms of wind farms,” he says. To meet this market demand, he stresses that the sector’s companies should invest in adjusting the fleet of equipment to the profile of the work - and that’s what Makro is doing.”

The specialist says that 80% of the country’s wind power generation projects provide for the use of 1.5 MW to 2.5 MW wind turbines which weigh from 70 tons to 90 tons and have blades of up to 60 m in length. “This demands investment in equipment for transporting and hoisting these loads, such as cranes and special shaft lines.” In the case of turbines rated from 3 MW to 8 MW which, according to him, “are already a reality in Brazil”, the loads that are handled weigh as much as 300 tons, requiring greater care as refers to the logistics involved in the transportation and assembly of parts (see sidebar on p. 54).

A trend observed by Rodrigues is growth in the use of concrete towers rather than towers made of metal, which are present in 70% of the country’s wind power generation projects. According to the specialist, this is due to delays in the implementation of wind power plants because of a shortage of metal (steel) towers for delivery. He points out that the concrete towers will be manufactured at the job site itself and assembled with 24 sections, unlike the average of four sections used in the installation of metal towers. “Although this new profile of work eliminates the need for transportation of parts, it will increase the use of cranes and will require a new analysis for more appropriate adjustment of the configuration of the machine.”

The advance of RTs
Another trend in the market for cranes, ratified by the strategies of manufacturers such as Manitowoc, Terex and Sany, is growth in the utilization of Rough Terrain (RT) cranes. Recommended for use on challenging and irregular terrain, these machines have a wide range of applications in mining companies and industrial works are characterized by their capacity to move even with suspended loads. As regards Manitowoc, for example, which has just inaugurated a plant in Passo Fundo (RS), the first model to be produced in Brazil will be the company’s Grove RT 765E-2, with a 59 ton load capacity.

The model stands out for its mobility and features devices that assist the operator in maneuvering and visualizing his/her field of work, such as a multimode steering system and a ‘Vision Cab’. According to Mauro Nunes, general manager for Manitowoc in Brazil, the plant currently has a staff of 75 employees and has a production capacity of 44 units/year in a single work shift. By 2013, he estimates that the company’s installed capacity will reach 97 units/year, including the production of other models of RT and tower cranes.

The installation of the plant involved investments of over US$ 75 million, talking into account the possibility of expansion of the unit in the future. As the executive explains, the main motivation for the US company to focus on investing in Brazil was the need to be close to its customers in Latin America; a region with huge prospects for investment in infrastructure. “The issue of logistics weighed heavily on the decision since Rio Grande do Sul state also has a quality workforce to offer and proximity with the Mercosur,” says Nunes.

Another aspect that tipped the scales was a census of the location of suppliers. “We needed local suppliers and not foreigners," said Larry Weyers, Vice president for the Americas at Manitowoc. "We wanted our base of customers and suppliers to be within a radius of up to 200 miles.” To capitalize on the advantages of local production, the company spared no efforts to advance production by one month so as to meet demand. Orders were, indeed, not long in coming - with 32 units already sold to Makro Engenharia upon inauguration of the factory, which included orders for 16 RT units and 16 ATs, with capacities of 220 to 300 tons.

Terex Manufacturing Plant
The segment of RTs also occupies a central position in strategy at Terex which announced the production of a 50 ton capacity model at its plant in Cachoeirinha (RS). According to the company, the equipment will be assembled within the same standards of quality of the units manufactured in the United States. In the first stage of the project, the equipment will be assembled under a CKD (completely knocked down) arrangement, but for the second stage, which Terex has said is already underway, the intention is certify local suppliers so that the equipment has 60% domestic content.

According to Kevin Bradley, president of Terex's crane division, the company’s drive to manufacture RT models locally is due to the large volume of infrastructure projects scheduled and presently underway in Brazil where these machines operate with excellence since they are capable of moving even when hoisting loads. “For this reason, we see that we need to occupy space in the market for RT’s which is growing strongly in Brazil,” he says.

Bradley explains that the company already holds a significant share in the sales of other models on the local market. In the segment of all-terrain (AT) cranes, for example, the company estimates that the model accounts for 35% of the units imported. As regards the disputed segment of truck-mounted cranes (TC cranes), the executive says that the Terex plant in China is responsible for 20% of units imported into Brazil.

Sany Product Launches 
In line with competition and customer demand, Sany also introduced, during M&T Expo 2012, an RT model with a 55-ton load capacity on the market. According to the company, the model has a main boom with five hexagonal sections, can overcome ramps of up to 75% (gradeability of 75%), and has a maximum lifting momentum of 1,845 kN..

To serve construction and rental companies, works of industrial assembly and movement of precast concrete elements, the company also launched an all-terrain version, the SAC2200, with 220 tons of cargo capacity. According to Sany, this is the first AT (all-terrain) model produced in China with five axles and such a lifting capacity.

According to Rene Toledo Porto, sales director for the company’s mobile crane division, the model’s wheel system is more compact and easier to maneuver and travel is enabled via a six mode hydro-pneumatic suspension system (on axles). “The model comes equipped with two Mercedes-Benz engines and a main boom of 62 m, another 43 m of jib, resulting in a maximum boom length of 105 meters and maximum operating height of 102 meters.”

Link-Belt Initiative
The big news in the Brazilian market for cranes, however, is the arrival of U.S. manufacturer Link-Belt, which had already had operations in Brazil over two decades ago. The announcement was made during M&T Expo, where the manufacturer introduced Brasil Máquinas de Construção (BMC - Brazil Construction Machinery) as their primary distributor. “We are convinced that with the support of one of the largest and financially-solid distribution networks in the country providing excellence in service, we will gain a great share of the market in Brazil,” says Corey Rogers, sales manager for Link-Belt Latin America.

According to Rogers, the Brazilian operation is strategic for the company. “Our goal for global growth this year is 8% to 10%, mainly due to the business in Brazil.” Rogers exemplifies the importance of the country in the company's plans with the presence of many of its global executives in attendance at M&T Expo full-time. “To win over the local market, we are betting on RT and lattice-boom crawler cranes that are models in which Chinese manufacturers do not have the expertise to compete,” he explains.

In fact, when it comes to competition, Link-Belt’s executive is emphatic when saying that his company’s direct competitors are the manufacturers from North America or Europe who already have a tradition in the local market. “We realized that Brazilian customers are seeking reliable alternatives to these companies and, therefore, we are establishing a strong aftermarket project, which provides for a large enough inventory of parts to serve the 30 units that we want to sell in 2012.”

The line of products already made available by Link-Belt Cranes through BMC is vast, including AT cranes of 75 to 250 ton capacities, in addition to RT models of up to 130 tons and crawler cranes of up to 500 tons. “The difference is that the ATs and RTs are also available with lattice booms, a feature which little known or used in Brazil, but which can bring great operating benefits upon enabling the hoisting of loads across the entire radius of the chart rigger, something you don’t always find in the competition’s products,” adds the executive.