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The crane market in Oceania has been going through hard times

It is almost two years since anyone last produced a car in Australia. Holden, the home-grown manufacturer who made among other things the iconic Ute, or Utility Vehicle—half car with family in the front, half pickup truck with sheepdog in the back—had become a brand of General Motors. It closed down its production line in October 2017.

Those vehicle makers all considered Australian labour costs too high and the Australian and New Zealand consumer market too small to sustain manufacturing there.

James Schmidt is engineering manager of Sam Technology, makers of materials handling and lifting equipment. “Manufacturing in Australia is dead,” he says. “In Sydney, Melbourne, Brisbane, overheads and land costs are huge. The government does not encourage manufacture. Infrastructure and mining are what is left. Supply those as a crane manufacturer and you can get by. Otherwise you are…” we can finish his sentence politely by saying ‘… in trouble.’

Schmidt of Sam Technology offers a final crane-maker’s warning of doom. “There is a little place called China,” he says. And China, relatively speaking, is just down the road.

Bruce McKay is director of Global Track Australia, who make light gantry hoists. “A client of mine recently bought three jib cranes from China,” he says. “He told me the price; and it was around half of what a locally-made one would be. On the bright side, there is duty on the imports, which makes some difference.”

Eilbeck, Sam Technologies, JDN and Global Track are Australian-owned companies with proud Australian heritage. With high Australian labour costs, and with a source of cheap and possibly cheerful cranes on their doorstep, how do such companies survive?

Eilbeck takes another approach. They supply not the specialist but the quality end of the market. As sole importers and distributors of ABUS hoists from Germany, they sell on German engineering—and on Australian self-reliance and pride. “Our company has 17% of the market share,” says Heinrichson. “We are the largest ABUS agents outside Germany. And we have lots of customers. The good quality market is still there. People who buy from us would not be buying cheap Chinese if we weren’t here: the good stuff, which is what they want, is not cheap whoever makes it. There is a fitness and a purpose for all equipment, and you pay for what you get. The back-yard ad-hoc operator will buy Chinese, but he is not part of our natural clientele anyway. The good quality market is still there.”

So, too, is local pride. “We are still rednecks at heart, and we are an island still; which means that people like dealing locally. The real guys still support us.”

Eurocrane, based in Melbourne, is another importer and distributor, in their case specialising in Verlinde hoists from France. Geoffrey Wiart, their technical sales manager, enters the same territory: “The mining industry is indeed very stable, if not slowing down,” he says. “They are not so much our client as they look for cheap—that is, Asian—disposable cranes, and we focus on quality rather than volume. I am not sure if mining will grow soon, but looking at the recent price and demand hike for gold, due to events in Iran and global fear of war, and for rare earths, for electric vehicles and IT, there is a good chance it will pick up again.”

JDN produce the AH, or Australian Hoist, which Colin Smith proudly tells you can come in 2.6 million models. “That is because it is modular,” he says, “with the client able to choose their options. Once you combine speed, drum size, reeving combinations and so on it is like moves in a chess game: a few different moves can produce thousands of different outcomes. I am not saying that we have produced one of each of those two million possible combinations. But it is a significantly large range.

“When the car industry ended, we sat down and crunched the numbers,” he says. “We thought ‘This is going to hurt.’ We could not have been more wrong. The void has been totally filled by other industries.”

He can explain the apparent paradox. “The reality was that the domestic car industry was the least domestic it had ever been. We were not car-makers, we were part of a global car assembly zone. When it ended, all the sub-manufacturers have held on, supplying parts locally.”

“Australia has a more ‘small business’ market,” says Wiart of Eurocranes. “In recent years, most of the heavy manufacturing has moved from Australia, but its isolation has led the Australian to rely on themselves with plenty of small manufacturing to keep crane manufacturers busy.” And he echoes the ‘island mentality ’ theme: “Remember that it takes as long to go to Perth from Melbourne as it would take a Londoner to go to Egypt.”

Colin Smith of JDN again: “Just now the economy is pretty strong. Interest rates are dropping, and they are trying to get more inflation into the system; the Australian dollar is falling, which is helping our exports. So it makes our position a bit strange. We are still building a lot of cranes here.”

Infrastructure is, as we said earlier, another mainstay. Modular Cranes works mainly in Victoria. “There are ups and downs but there are a few projects—mainly roads and tunnels—that are around right now,” says their Agatha Loizu. “They are on the increase, so there is a need for overhead cranes and the like. And last year was good.”

And Australia has been a land of immigration, which still continues:

“The continuous influx of migration continues to maintain a high demand and increasing need for infrastructure, which boosted the economy despite the global crisis which started in 2008,” says Wiart. “In Victoria alone, the government is expending a lot of its money on infrastructure.” The Melbourne Metro Tunnel project is an A$11bn effort. There is the West Gate Tunnel, at A$6.8bn, the Melbourne Airport rail link at $5bn, and the M80 ring road upgrade at A$2.2bn. Nationally funded is the A$9.3 Billion Melbourne to Brisbane Inland Rail. Elsewhere Sydney also has a metro project, this time worth A$12 billion; Queensland has the A$5.4bn Cross River Rail, and the list could continue with half a dozen more. As McKay said earlier, there is work around.

Outside the big projects, business is fairly stable, says Wiart: “Small companies are created every day, and existing clients do not hesitate to upgrade their equipment if the need arises.” Eurocranes are agents for Verlinde, one of whose specialities is entertainment hoists; and entertainment, says Wiart, is one business that remains in constant demand. “It the only stable industry; and with the implementation of the D8+ standard, a lot of our competition finds itself out of the picture.”

The crane market in Oceania has been going through hard times

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