Country Report China: Raising the stakes

Booming was a word commonly used to describe the fortunes of access at the Bauma China construction exhibition in Shanghai, during November last year, where the access flag was flying high. Apart from the significant number of specialist manufacturers in the country, construction giants Sany, XCMG, Luigong and LGMG have all started up their own AWP divisions in the last 12 months.

The fortunes of the China access industry was also prominent at the International Rental Conference Asia – organised by KHL Group - which also took place in Shanghai, the day before Bauma China started. 

Among the top flight speakers from the access industry was Desmond Soh, vice president and general manager - Asia, at JLG Industries, who spoke about the potential for platforms in the country. 

He estimates the number of construction workers for each AWP in China is 16000, while in the US the figure stands at 12 units per worker. Yet, he also believes there are up to 106 new AWP manufacturers in China, although most of them are very small local scissor producers. 

One of the drivers of growth, apart from the well-documented need for safety regulations and an established rental model, is the ageing population in China and, therefore, its shrinking workforce, amounting to “a seismic shift in labour trends,” said Mr Soh. 

According to Mr Soh, the population of China will drop 21% by 2030 and construction labour rates are going up on average 10% a year. 

Matt Fearon, president of Genie, provided his observations at the conference too. He said China is in the ‘growing awareness stage’, where platforms are in use, but not in general use, and there is now a push from contractors to adopt it on some sites.

There are a number of factors that all concerned must recognise before the sector can grow significantly. For example manufacturers must avoid financing equipment to companies that cannot pay. “It will destroy rental rates and it takes a long time for the industry to get back from that,” said Mr Fearon. Other areas of importance include responsible inventory management, in which manufacturers have a responsibility not to over supply. He used the example of Brazil, which had been saturated by machines, as a result, “rates will take a hit for five to six years.”

Life cycle support is another example, including service support for the customer but also understanding the value of the asset as it ages. This leads on to training requirements to ensure the equipment owner has the knowledge to work safely and maintain the machine.

Bauma Launches

Just two years ago at Bauma China 2014, aerial work platforms were still considered a standalone product that much of the construction industry had little knowledge or understanding of. Now there is a realisation that the AWP sector’s presence will grow at a storming rate, despite that growth being from a low base.

Estimates of the number of aerial work platforms at work in China range from 20000 to 50000, and the general consensus is that the annual growth rate is 20% to 30%. 

Dingli is an example of a Chinese manufacturer on the success trail, having now positioned itself as a global player. It launched a new series of booms at Bauma China, resulting from its arrangement with Italian telehandler specialist Magni.

Xu Shugen, chairman of Dingli, tells AI the striking design of the eight new articulated and telescopic booms reflects a new concept and said a new factory would be built specifically for these models in China.

The 28m working height BA28RT articulated boom and BT28RT telescopic model are the biggest in the range, with 24m, 20m and 16m working height machines filling out the rest of the two categories. The 28m and 24m machines come with jibs.

They have been designed in Dingli’s research and design centre based at Magni in Italy, which was set up after Dingli acquired 20% of the Italian telehandler specialist earlier this year.

Each machine has a Deutz Euro IV compliant engine, with common components across all of them. They have been designed for mature markets like Europe and North America and provide a unique counterweight design that is 1.2m lower than the manufacturer’s previous booms with all major components, engine etc., placed below the chassis.

This provides a 10%-15% lower weight across the range and greater outreach. For example, the BA28RT weighs 16.1 tonnes and has an outreach of 18.3m. Platform capacity is 350kg. All machines have four wheel drive and steer.

New facility 

The new factory will cover 210000 square metres, costing US$150 million, and will be ready in 24 months. The company said it expected to produce around 2000 booms there each year. That is in addition to its massive new scissor factory which it completed in 2015. 

As previously mentioned, existing major construction equipment manufacturers have been getting in on the act. XCMG launched eight scissor and boom models at Bauma China.

Its new AWP division Xuzou Firefighting and Safety Equipment introduced three 6m, 10m and 12m working height scissor models, along with three telescopic booms with 22m, 26m and 30m working heights and a pair of 14m telescopic models, with and without jib.

The division was set up at the beginning of 2016 in response to the growing interest in aerial work platforms in China. As its name suggests, the division also produces firefighting platforms and other related equipment.

Its general manager Li Qian Jin, explained that the company had introduced an advanced research and development facility and aims to develop its service provisions and finance offerings to compete with the world’s biggest AWP manufacturers.

It is currently focusing on the China market and intends to produce 2000 scissors and 250-300 booms this year with a sales value of around RNB250-300 million. Mr Li said once it had built up the quality of its products it would focus on Europe and a potential partnership with an existing manufacturer there.

“We are at the very beginning but we plan to rebuild the access market in China. Only a manufacturer that provides service, financial support and after sales offerings can be a major player,” added Mr Li.

Sany has also got in on the act through its existing partnership with Palfinger, based in Austria. It has led to two product lines; self propelled and truck mounts. The truck mounts are using technology and original designs from the Palfinger group, which have been adjusted for the Chinese market. The models sit in the 14m – 28m working height range. The company said it has an ambitious target to be first time serious players in the Chinese truck mount sector which is lagging significantly behind general AWPs and is seeing very little growth at present. Sany is using the same production lines it uses for its mobile cranes to manufacturer the truck mounted platforms. 

On the self propelled side, Sany is focusing on 6m to 12 m working height scissors, with 8 m and 10m models in between. The company told AI its scissors are at a field testing stage with some having been sold to rental companies in China. The next satge will be to export the scissors to match its competitors, which it says exports up to 80% of their scissor production. The plan is to extend its output to self propelled booms this year, with prototypes for mainly telescopic models, for use primarily in China. All the models have been designed in cooperation with Palfinger. 

“We are making use of the Sany and Palfinger groups. Distributors for each in different areas will work for each others’ products.” 

LGMG is moving into booms after starting scissor production last year. As part of a group with RNB 17 billion annual revenue, based in China, it produces a range of construction equipment and says access equipment offers great potential in the country and worldwide, so much so that it expects to be producing 10000 units annually, mainly scissors, within the next five years.

It already manufactures 1000 units a year, with 200 of them sent abroad. On its stand at Bauma China were prototypes of a 26m working height telescopic boom and a 14m articulated model, both of which have electric drive. The plan is to produce diesel versions in the future. LGMG was also showing its first rough terrain scissor prototype. David Wang, vice president of Lingong Group Jinan Heavy Machinery, says it could leverage its 200 distributors in China and 100 worldwide, along with its 40 years’ experience in machine design, to make a major impact on the access sector. It added that after sales service and finance was also easier to provide because of the size of the company.  

The company will concentrate on the Chinese market in the next couple of years until it gets a feel for the industry, then will set its sights on Europe.  

Mr Wang said, “We are a newcomer but we have to move fast, there will be lots of effort in after sales service and parts.”  Turning to the manufacturers based in Europe and North America, the significance of China and wider Asia in their international plans are clear. France-based Haulotte staged the global launch of its HT28 telescopic boom at Bauma China.

The new model, which will also be available as a HT26 model without fly jib, was the showcase machine on the company’s stand. Haulotte Shanghai’s general manager, Tomie Chan, said at the show the machine – the first production unit – would end up with a Chinese rental customer.

Haulotte launch

Weighing 17.9 tonnes and with a maximum outreach of 23.8 m, the HT28 has two important new features that will eventually be found on every Haulotte boom: an engine auto-stop feature that the company estimates will reduce engine run time by 20% and cut fuel use by 8%; and a lighting system to make loading and unloading safer.

Mr Chan said the HT28/HT26 size was very important for the Asia market, more so even than Europe. The units are being manufactured in France.

At the show, Haulotte’s managing director for Asia, Damien Gautier, reported that the company’s sales in China had doubled so far this year, driven by growth in shipments to rental companies. He confirmed the importance of financing, attributing it an important factor in the manufacturer’s growth, with more than half of its sales being supported by finance.

The company has had a base in Shanghai for 10 years, but in response to recent growth it has added a sales and service office in Beijing and next year will open a new facility in Guangzhou, southern China.

Haulotte also reported the landmark sale of its first telehandler, a 14 metre HTL4014, in China, to rental company Chongquing Baisitai (Zhibang Group), an XCMG excavator dealer that in the past few years has started renting aerial platforms. It already has around 185 Haulotte aerials, but this is its first handler.

“Telehandlers are coming late to China”, said Haulotte’s chief operating officer, Alexandre Saubot, “We’re starting to see signs of interest. Medium term I am confident it will find its place, but for rental it’s at the very beginning.”

Mr Saubot also said he was aware that there were some concerns in the Chinese market about the rapid influx of aerials and the impact this was having on rental prices. He said that rates were currently sufficient to generate enough returns for rental players, and added that he had no concerns about the health of the market.

Genie also had significant news on its stand, with the launch of a new ‘sub-brand’ and a pair of scissors to start it off.

Reach By Genie aims to offer a value product that will directly compete with brands in China. Clint Webber, general manager of Genie China, told AI the plan was to open up Genie’s scissor products to middle-sized and smaller rental companies in China.

The X-Series of scissor lifts, the first under the new branding, initially includes the 12m working height X-12 and 14m X-14, and has been designed across Genie’s China and US research and development centres. They include structural differences to the scissor stack and chassis, plus a greater number of components locally produced in China. Although, Mr Webber points out the models go through the same stringent testing as all other Genie products.

“China has to be the most competitive market in the world, although not everyone is equal.” He adds, “The idea is to provide these along with our premium products and create an opportunity for entry level customers to try Genie.” This does not generally include the largest rental companies in China, which already tend to opt for scissors and booms manufactured by manufacturers based in the west.

The only unknown about the X-Series is its residual value, although Mr Webber is confident it will be at the same high level as its premium Genie scissor counterparts.

Talking about the large number of manufacturers producing products for the Chinese market, Mr Webber adds, “The amount of supply and demand is not even. The residual value is vital and the return on investment (ROI) is a huge element.”

JLG was also in launch mode, and introduced a range of platforms at the show, including its 1100SJ telesopic boom with extreme environment package and newly designed R Series of scissor lifts, which will run alongside its existing premium series and replace the RS series, to offer a more cost sensitive option.

Tailor made 

The manufacturer also showed the 1500AJP, the world’s biggest articulating boom, for the first time in Asia. It features a work envelope of more than 74000 cubic meters of reachable space, a working height of 47.7m, and a platform capacity of 272kg unrestricted and 454kg restricted

The 1100SJ is tailor-made for shipyard applications and is suited to construction. The 1100SJ allows operators to reach 35.5m working height, with 250kg unrestricted area load capacity, which is 10% higher than most other straight booms, says the manufacturer. Providing 2WD and 4WD alternatives it offers protection of all components, with its extreme hostile environment package, including the steel covered powertrak and control panel, steel fuel tank and turntable bearing cover.

The new R Series of scissor lifts, which replace the RS series, were represented by the 7.8m working height 1932R and 13.9m 4045R. The former offers 250kg platform capacity. A new active pothole system provides increased ground clearance in a serviceable and reliable design using up to half the parts of a conventional system. A multi-featured battery charger along with swing-out component trays add greater serviceability. The 4045R continues the R Series theme and is JLG’s first scissor lift with 13.9m, and it has a narrow 1.14m machine width.

In addition, JLG has begun equipping its boom lifts with the SkyGuard secondary guarding system as standard on its boom lifts ordered in Asia, from the beginning of this year.

“With the ongoing development of aerial work platforms, we will see more innovative technologies becoming integrated in the aerial work platform industry. Aerial work platforms will definitely become smarter and stronger in the future.” said vice president of global marketing, Alan Loux.

Setting up 

Skyjack is the only one of the four biggest AWP manufactures in the world not to have a plant in China or the surrounding region. Although Brad Boehler, Skyjack’s president, believes it is inevitable it will manufacture somewhere in the region, and quite likely it will be China.   

“We need to build the market place before we do that. But we are happier to place manufacturing here and then leave the machines in this part of the world. It is not our strategy to here and supply globally,” Mr Boehler explains. 

Ultimately the goal is have manufacturing in EMEA, Asia Pacific, the Americas, plus a corporate headquarters which is now the main plant based in Canada.  “It is better to make a machine that fits the region.”

Setting up a new manufacturing facility represents a major investment, and as Mr Boehler explains it has to run at full capacity to make it viable. And as part of the Linamar group, Skyjack is looking to partner or with other plants in the group that already exist, particularly in Europe where it has a range of facilities. 

While having moved into telehandlers in a big way with the full TH range, designed to be competitive against the exiting big players, one of its main goals is to defend its scissor share in North America and build on its share in continental Europe and Asia Pacific.

Reflecting Snorkel’s ambitious growth plans, it opened a 3000 square metre facility in Jintan, Jiangsu, China, this year.

“The investment in our new facility in Jintan underlines our commitment to our customers in this region,” says Snorkel CEO, Matthew Elvin. “We have employed a direct sales and service team, to better support both our independent distributors and our direct customers, and our Jintan facility means that we have new machines and spare parts on hand to ensure a high quality service.” 

At Bauma China, Snorkel also announced the launch of a new Chinese website and showed its most popular electric lifts. On display at the event were three of the largest models in the electric scissor family: the S4732E with a 11.8m working height, with sister model, the 7.79m working height Snorkel S3219E on display on the IPAF stand. 

Alongside the S4732E, Snorkel showed the TM12, a self-propelled telescopic mast lift which is capable of lifting two people indoors to a working height of 5.6m. Also on display was the Snorkel UL40 - a robust push-around telescopic mast lift that can lift one person plus tools to a working height of 14.1m (46 ft). Representing boom lifts, Snorkel dispalyed the A38E and A46JE models. 

ooming was a word commonly used to describe the fortunes of access at the Bauma China construction exhibition in Shanghai, during November last year, where the access flag was flying high. Apart from the significant number of specialist manufacturers in the country, construction giants Sany, XCMG, Luigong and LGMG have all started up their own AWP divisions in the last 12 months.  The fortunes of the China access industry was also prominent at the International Rental Conference Asia – organised by KHL Group - which also took place in Shanghai, the day before Bauma China started. Among the top flight speakers from the access industry was Desmond Soh, vice president and general manager - Asia, at JLG Industries, who spoke about the potential for platforms in the country. He estimates the number of construction workers for each AWP in China is 16000, while in the US the figure stands at 12 units per worker. Yet, he also believes there are up to 106 new AWP manufacturers in China, although most of them are very small local scissor producers. One of the drivers of growth, apart from the well-documented need for safety regulations and an established rental model, is the ageing population in China and, therefore, its shrinking workforce, amounting to “a seismic shift in labour trends,” said Mr Soh. According to Mr Soh, the population of China will drop 21% by 2030 and construction labour rates are going up on average 10% a year. Matt Fearon, president of Genie, provided his observations at the conference too. He said China is in the ‘growing awareness stage’, where platforms are in use, but not in general use, and there is now a push from contractors to adopt it on some sites.There are a number of factors that all concerned must recognise before the sector can grow significantly. For example manufacturers must avoid financing equipment to companies that cannot pay. “It will destroy rental rates and it takes a long time for the industry to get back from that,” said Mr Fearon. Other areas of importance include responsible inventory management, in which manufacturers have a responsibility not to over supply. He used the example of Brazil, which had been saturated by machines, as a result, “rates will take a hit for five to six years.”Life cycle support is another example, including service support for the customer but also understanding the value of the asset as it ages. This leads on to training requirements to ensure the equipment owner has the knowledge to work safely and maintain the machine.Bauma LaunchesJust two years ago at Bauma China 2014, aerial work platforms were still considered a standalone product that much of the construction industry had little knowledge or understanding of. Now there is a realisation that the AWP sector’s presence will grow at a storming rate, despite that growth being from a low base.Estimates of the number of aerial work platforms at work in China range from 20000 to 50000, and the general consensus is that the annual growth rate is 20% to 30%. Dingli is an example of a Chinese manufacturer on the success trail, having now positioned itself as a global player. It launched a new series of booms at Bauma China, resulting from its arrangement with Italian telehandler specialist Magni.Xu Shugen, chairman of Dingli, tells AI the striking design of the eight new articulated and telescopic booms reflects a new concept and said a new factory would be built specifically for these models in China.The 28m working height BA28RT articulated boom and BT28RT telescopic model are the biggest in the range, with 24m, 20m and 16m working height machines filling out the rest of the two categories. The 28m and 24m machines come with jibs.They have been designed in Dingli’s research and design centre based at Magni in Italy, which was set up after Dingli acquired 20% of the Italian telehandler specialist earlier this year.Each machine has a Deutz Euro IV compliant engine, with common components across all of them. They have been designed for mature markets like Europe and North America and provide a unique counterweight design that is 1.2m lower than the manufacturer’s previous booms with all major components, engine etc., placed below the chassis.This provides a 10%-15% lower weight across the range and greater outreach. For example, the BA28RT weighs 16.1 tonnes and has an outreach of 18.3m. Platform capacity is 350kg. All machines have four wheel drive and steer.New facility The new factory will cover 210000 square metres, costing US$150 million, and will be ready in 24 months. The company said it expected to produce around 2000 booms there each year. That is in addition to its massive new scissor factory which it completed in 2015. As previously mentioned, existing major construction equipment manufacturers have been getting in on the act. XCMG launched eight scissor and boom models at Bauma China.Its new AWP division Xuzou Firefighting and Safety Equipment introduced three 6m, 10m and 12m working height scissor models, along with three telescopic booms with 22m, 26m and 30m working heights and a pair of 14m telescopic models, with and without jib.The division was set up at the beginning of 2016 in response to the growing interest in aerial work platforms in China. As its name suggests, the division also produces firefighting platforms and other related equipment.Its general manager Li Qian Jin, explained that the company had introduced an advanced research and development facility and aims to develop its service provisions and finance offerings to compete with the world’s biggest AWP manufacturers.It is currently focusing on the China market and intends to produce 2000 scissors and 250-300 booms this year with a sales value of around RNB250-300 million. Mr Li said once it had built up the quality of its products it would focus on Europe and a potential partnership with an existing manufacturer there.“We are at the very beginning but we plan to rebuild the access market in China. Only a manufacturer that provides service, financial support and after sales offerings can be a major player,” added Mr Li.Sany has also got in on the act through its existing partnership with Palfinger, based in Austria. It has led to two product lines; self propelled and truck mounts. The truck mounts are using technology and original designs from the Palfinger group, which have been adjusted for the Chinese market. The models sit in the 14m – 28m working height range. The company said it has an ambitious target to be first time serious players in the Chinese truck mount sector which is lagging significantly behind general AWPs and is seeing very little growth at present. Sany is using the same production lines it uses for its mobile cranes to manufacturer the truck mounted platforms. On the self propelled side, Sany is focusing on 6m to 12 m working height scissors, with 8 m and 10m models in between. The company told AI its scissors are at a field testing stage with some having been sold to rental companies in China. The next satge will be to export the scissors to match its competitors, which it says exports up to 80% of their scissor production. The plan is to extend its output to self propelled booms this year, with prototypes