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CRANE SUPPLY TIGHTER

13 Jan Industrial

GLOBAL SHORTAGE PUTS THE SQUEEZE ON THE BOOMING CONSTRUCTION INDUSTRY.

But the building sector seems to be taking the shortage of machines and other supplies in its stride, reinventing itself to increase efficiency, writes Mathabo Le Roux.

A global shortage of cranes is adding pressure to supply constraints in the construction industry. With major construction projects picking up pace, concern has been expressed that this could lead to project delays. However, it appears that the industry is taking the challenge in its stride.

The demand for mobile cranes has picked up considerably over the past couple of years and, according to stakeholders, the industry is experiencing “terrible” lead times on ordered equipment.

According to Libeherr, a major German supplier of cranes, it now takes a minimum of 12 to 14 months, but even up to 18 months, for mobile cranes to be delivered upon order.

“We cannot get another crane for 2007. The capacity of our factory is completely booked and we are already planning for 2008,” Jeff Hunt, the director of cranes at Libeherr, said on Friday.

The construction industry, which has entered a boom time, has been reporting shortages on all fronts, including skills, materials and equipment. Both the steel and cement industries have had to resort to importing to meet growing demand and some companies are also importing skills to circumvent project delays.

With a slew of projects to get out of the blocks from this year – not least of which are projects in government’s multibillion-rand infrastructure expansion programme and preparations for 2010 — the situation is set to worsen.

Johnson Crane Hire, the largest supplier of cranes for hire in the southern hemisphere, has anticipated a surge in demand and has significantly increased its fleet of cranes. According to sales director Alan Paul, the company has added between 35 and 40 cranes to its existing fleet of 200.

“If we had another 20 cranes we would have no problem to put them out to hire,” he said.

Some construction players had anticipated the tightening in the supply chain and had ordered equipment in advance to prevent a hold-up in the start of construction, he said. The company does not expect to run short of supply, but Paul has admitted that smaller players are taking strain.

“It is different for Johnson because of the size of the company. We are the only real national operator, with 14 branches. Some of the smaller players panic a bit and, speaking to construction companies about what is going to happen over the next two to three years, some have certainly expressed concern about a tightening of supplies,” he said.

According to Brian Bruce, CE of Murray & Roberts, which has a stake in the Bombela consortium tasked with constructing the Gautrain, the industry is not an efficient user of cranes. Prices are likely to go up which would force the sector to change its behaviour or look for alternatives, he said.

He was still optimistic, however, and said the sector was reinventing itself to adapt.

“The industry is constantly adjusting itself to do things more practically and efficiently. You are finding more innovation and an increase in productivity.”

There is also a greater degree of globalisation in procurement patterns, with companies spreading the net wider to source equipment. “There is massive demand for all sorts of equipment and clearly there is a tightening of supply,” Bruce said.

“Obviously there are concerns but this is not a crisis.”

Source: The Weekender – Mathabo Le Roux