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Andrew Clarke, Demag Cranes & Components managing director - sales and marketing, says business in general is "stronger than expected," but agrees that growth rates, while set to continue, will perhaps do so "at a slower rate than presently being experienced."

Demag senses a desire for more process cranes, standard cranes, KBK crane construction kits, DC chain hoists and DR rope hoists. It demonstrates the vast cross-section of lifting equipment currently in demand in the European market.

Of Konecranes’ main customer segments, only the pulp and paper and the automotive industries posted weak investment demand. The top three sales-generating industries were general manufacturing, harbours and primary metals.

"It is apparent that the new generation of core products (chain and rope hoists) has been well received by the market," adds Clarke.

The UK's Morris Material Handling supplies a high volume of branded products in terms of the S3 electric chain hoist. Generally, the European market for the S3 enjoyed "reasonable growth last year," says managing director Steve Davis, with France and Spain being the most buoyant markets.

Of course, as our October issue discussed, the upsurge in business in Germany has been a key factor.

According to Konecranes, "the German economy carries the biggest industrial weight," and, thus, it "saw a strong performance during 2006." In particular, industrial exports from Germany made it the largest exporter in the world.

German manufacturer Kuli Hebezeuge Helmut Kempkes GmbH, for example, is cashing in on the worldwide economical boom. Not only Europe and Canada increased, but also south east Asia and Africa. The Middle Eastern market ultimately booms because of the high prices of oil. Around 80% of its products are sent overseas. Supply of complete cranes, however, is, in the main, limited to Germany. "Or at least the percentage is far less," says Heinz Helmut Kempkes, managing director.

These trends favour the producers of all materials handling equipment and Konecranes believes the momentum Germany has gained will carry it forward into coming years.

Stahl CraneSystems reiterates the importance of the German market (as you'd expect) - the "largest" as it put it - but adds: "The positive development of our business operations in Europe is sustained both by Germany and by the new markets in Eastern Europe, particularly Russia."

Demand rose "perceptibly" in 2006 Stahl says "with medium-sized industry investing more in building equipment and machines again."

After two-figure growth in orders received in 2006 it is reckoning with stable demand continuing for this year. "The continuing expansion of our operations will again be sustained by export to our successful sales markets in USA, Eastern Europe and Asia."

In addition to the motor industry and the manufacturing industries, the chemical and energy industries are among growth areas.

Interestingly, for Morris, business in Germany "remained somewhat depressed," but "we do envisage a level of recovery," says Davis. However this is unlikely to match the continued growth that will emanate from within both France and Spain. "If we look at our main export markets," Davis continues, "and particularly Saudi Arabia, then business has emanated from many core industry sectors that form the drivers encouraged within Saudi to move them away from their dependency on oil." By this he refers to industries such as paper, steel, electricity generation, gas and sanitation etc.

Konecranes' long-term EBIT-margin targets for the respective business areas are: 12% in service, 12% in standard lifting and 10% in heavy lifting. Achieving these goals would result in a group margin level of approximately 10%. Fueling such ambition is improved demand in "almost all" customer industries during 2006, with harbours, primary metals, power and petrochemicals showing particularly strong growth."

Growing

Juha Erikkilä, managing director, Finland-based Erikkilä Nostotekniikkaa Oy, is equally optimistic, saying the market is growing and will continue to do so with the west demanding eastern European products.

Erikkilä is enjoying business up 25% this year on last with profit margins also up on the previous 12 months. "Steel price has now been integrated to our products which stabilises the situation," he says. But marketing to eastern Europe is "more difficult" Erikkilä says with what he describes as "widely spread decision making." For example, he continues, "many investors are coming from the west or Japan and buying from their business partners."

It's fascinating how, despite obvious collective interests, companies see themselves differently.

As an example, Erikkilä claims to be the "the first light crane manufacturer" with a daughter company in St Petersburg, "with sales and service," he points out. "We want to expand in the light crane market as a manufacturer but also as a system problem solving supplier in the Baltic Sea area," he says. He reckons the firm will be one of the top three players in Europe in light crane profile deliveries and in turnover by the year 2010.

SWF Krantechnik, meanwhile, says the healthy situation creates a need to "take market share from competition." David Rennert, of the marketing and communications department, says: "As demand is strong, suppliers have the option to choose projects according to their strengths."

Demand was slower and competition was tougher a year ago, Rennert says, with steel, concrete and glass becoming key industries for the company. However, it does not deal with end users directly, instead, seeing the world through dealers.

In summary, Erikkilä expects 2007 to be a "very interesting business year," during which it will execute an "aggressive growth strategy." Most business will probably come from machine and vehicle manufacturing industries Erikkilä says.

For UK firm Speedy Lifting "the last 12 months delivered another record year of organic double digit growth," according to managing director Claudio Veritiero, complemented, of course, by the acquisition of Lifting Gear Hire, now Speedy LGH. As a combined unit Speedy Lifting and Speedy LGH plans to reach £100m within five years.

Elsewhere in the UK, Liverpool-based Ryders International, is hoping its appointment as the sole European distributor of Maxpull hoists and winches will spark growth. First, however, it must seek dealers in the market.

Maxpull are a Japanese manufacturer of hand operated hoists and winches with a wide range of models with lifting capacities up to 10,000kg and pulling capacities up to 50,000kg - "all tested to 150% overload," according to Colin Pinchen, divisional manager (winches).

China

Further synergies with the US lifting business can be noted through the influence of China on domestic markets. This is no new phenomenon but most analysts foresee continued solid growth in Asia, with China being one of the engines.

Steve Davis at Morris Material Handling says he is already beginning to see Chinese chain hoist manufacturers appear in both Europe and the Middle East and "we predict that the numbers will continue to increase over the next two to three years," he says.

Konecranes says these trends have involved increasing outsourcing in low-cost countries and outsourcing of own manufacturing.

Andrew Clarke (Demag) responds: "As more products become available from the low cost countries, the mature markets are coming under greater price pressure." In addition, materials are becoming more sought after and thus price and production lead times are affected.

Europe is evolving as it considers its place in a market driven by the economic boom in China - and the increase in supply and demand that has come with it. As Clarke says the growth in the Chinese economy is feeding all the major economies of the world and Europe is also cashing in.

The annual economical growth and the permanently increasing demand for energy and raw materials in China is, thus, playing a part in Europe's growth. Increased production in expanding markets such as Eastern Europe as well as Asia is offering great opportunities to improve both competitiveness and cost levels.

It is a fallacy that Chinese production is universally poor. China is good at making cheap products, sure, but it is people in the west who buy them. And Claudio Veritiero at Speedy Lifting admits that the quality is improving.

Historically, yes, China has been about price and not value. But, contrary to what some say, the quality of products will also improve. Veritiero says: "As China’s economy and ability to service overseas markets continues to grow and develop, this trend is only likely to increase. It will likely lead to a wider range of lifting equipment on offer, plus, an increase in the quality of these products."

Increasingly, says Veritiero, "product quality shows signs of improving which means that China is now more competitive in the value market dynamic."

Speedy says it will only take on a product that has been proven to be safe through rigorous safety and quality testing procedures - but suggests that where it comes from is not important.

Carl Stahl responds, saying the European market is "overstocked with poor quality lifting gear from China that jeopardises life and limb of all users." It says it has carried out comparative tests and they yielded what it described as "alarming results."

Conversely, Carl Stahl says the Chinese market offers great possibilities. "To tap this potential," it has already founded new subsidiaries in mainland China.

Carl Stahl has branched into the hand chain hoist market with the launch of the so-called Condor range. It would not disclose the origins of its manufacture saying only that all its Condor-products are made by "leading manufacturers."

Juha Erikkilä, managing director, Erikkilä Nostotekniikkaa Oy, for example, says the market overall looks promising but business is hard because of common interests with other companies.

As such, the Condor range has been conceived to be independent from existing hoist manufacturers - "a unique range of premium products which is not comparable and not available from anybody else," it said. Carl Stahl hopes that this launch will combine with already "considerable growth in sales." It explains: "The economic pick-up coincides with the launch of the Condor range which makes us confident that it will be a big success right from the beginning."

SWF notes that many European companies are involved in the business development in China. Research and development will be the main focus in the highly developed European markets in future - next to the logistics, supply chain and marketing activities.

The boom in China is two-pronged, with both supply and demand opportunities for western manufacturers.

Konecranes claims to have the largest presence in China of all western competitors and has, in recent years, increased its annual sales "substantially."

Stahl CraneSystems, meanwhile, has had a subsidiary in Shanghai for some years. It says China is of great strategic importance as a market for sales and purchasing but it is also accelerating the development of operations in India "where at present we are recording even higher rates of growth than in China." India's accelerating economic growth has boosted domestic steel demand dramatically during the past few years.

Hire sector

Market conditions in the hire sector remain strong too - both in industrial markets and in construction in the UK, for example. This is reflecting more ambitious construction projects and longer lifespans for petrochemical and power projects. In addition, health and safety and environmental factors have also had a positive effect.

Through the purchase of Lifting Gear Hire Ltd, says Veritiero, "we now have a business that manufacturers wire rope slings, a full testing and inspection operation and a specialist industrial lifting business that can accommodate up to 800t." Additionally, it is expanding into the offshore market through the Speedy LGH location in Aberdeen.

Veritiero says he has experienced a desire for customers to position themselves closer with their suppliers, "through further development of supply chain agreements, driven by issues such as health and safety concerns." This allows suppliers to add value through creating administrative efficiencies and streamlining processes.

"A very positive trend we have identified is a increasing focus on technical competence," he continued, "with more health and safety responsibles concerned about lifting competence in the workplace."

Speedy Hire as a group launched its first presence in the Republic of Ireland with a simultaneous market entry across the group.

In more mature markets, it expects a number of high profile, high value projects including projects such as the development of the infrastructure and facilities to support the London Olympics in 2012. "We also anticipate visibility over other large spend programmes for example MOD infrastructure investment, nuclear decommissioning and the Heathrow East terminal development," Veritiero said.

Delay for spare parts

A total of 43 manufacturers from Europe alone have supplied lifting gear to CERN (the European Organization for Nuclear Research), the world's largest particle physics centre.

CERN's needs have changed in recent times with small single girder EOT cranes with capacities between 2 and 10t and small electrical hoists most commonly on order. With so many contacts in the marketplace, German national Ingo Ruehl, who oversees the transport and materials handling team, is well-placed to offer a summary. He says: "Considering the enormous delay for spare parts business must be extremely good in Europe."

He says the delay for spare parts has increased considerably over the last 12 months. "So did the prices for raw materials such as steel and copper etc," he continues, "which consequently increased the prices for EOT cranes."

Ruehl expects lifting companies to start to invest in renovation and modification of hoisting equipment "since this was neglected during the years with slow economical growth," he explains.

SWF says the healthy situation creates a need to take market share from competition swf 1 Research and development will be the main focus in the highly developed European markets in future - next to the logistics, supply chain and marketing activities, says SWF swf 2 SWF GmbH, of Mannheim, Germany, agrees that the boom in China drives the growth in most European countries swf 3 In addition to the motor industry and the manufacturing industries, the chemical and energy industries are among growth areas, says Stahl CraneSystems stahl 2 Stahl CraneSystems says the positive development of its business operations in Europe is sustained both by Germany and by the new markets in Eastern Europe, particularly Russia stahl 1 UK firm Speedy Lifting says the last 12 months delivered another record year of organic double digit growth speedy Steve Davis, managing director, UK-based Morris Material Handling, says the firm has enjoyed significant growth in the Middle East and North East Asian markets morris Andrew Clarke, Demag Cranes & Components managing director - sales and marketing, says business in general is stronger than expected demag 1 Carl Stahl has branched into the hand chain hoist market with the launch of the so-called Condor range carl stahl 2 Carl Stahl has opened new subsidiaries in mainland China Carl Stahl Hoist editor Richard Howes Hoist editor Richard Howes