China's Tower Crane Market Analysis
4/22/2009
Updated: 2008-01-28 Source: Market Avenue
Strong demand and surging supply
Since the 1980s, China's tower crane industry has been growing rapidly,
especially in recent years, tower crane sales have been climbing. Industry
statistics showed that sales in 2001 were 9,738 units, while it became the
first country with output exceeding 10,000 units in 2002. Due to government
macro control and industry consolidation, tower crane output retreated in
2004. From 2005 onwards, China's tower crane sales resumed its fast
growing trend, exceeding 20,000 units in 2006. China has now become a
major producer country of civil tower crane machinery, as well as one of the
major demand markets.
Technical developments
Since the 1990s, as many large scale projects such as urban construction,
water dams, power plants
and bridges flourishing to the market, technical requirements for tower cranes
from both domestic and international markets continue to get higher. During
this period China has gradually developed product types such as 400tm and
900tm lever arms and 300tm luffing arms, equivalent to technical level of 1990s
in developed countries, which substantially reduced the need and volume for
tower crane imports. Some key technical issues have also been solved during
this development period, such as high power lifting bodies CVT, PLC control
and crane remote control.
State-owned enterprises restructuring and private enterprises rising
There were many provincial tower crane manufacturers in the 1980s. But as the
market developed, private enterprises had rushed to capture market shares
from their state-owned counterparts. Some provincial companies, such as
Sichuan Construction Manufacturing and Shenyang Construction Machinery,
have been successfully restructured and gained stable market shares and
recognition. On the other hand, many private companies have become
prominent in the tower cranes market.Although industry profit margins are
getting slimmer in recent years, especially in small to medium tower cranes
market, many new entrants are still joining in.
Strong export growth, foreign capital difficult to enter
booming. For first-tier manufacturers, export sales have made up more than
50% of their total revenue. From 2001 to 2006, China's tower crane annual
export has grown from 67 to 1,748 units, and export destinations grown
from 11 to 63, including some developed countries. Due to rapid growth
of exports, it is expected that further expanding the export market will become
an important strategy for many Chinese tower crane manufacturers in the
future. Compared with exports, there have been much fewer tower crane
imports into China in recent years, and even rarer for foreign crane manufacturers
gaining success in China. A handful of joint-ventures or wholly owned foreign
producers did enter the Chinese market in past two decades, but most of them
today have either pulled out or are still struggling, mainly due to pricing and
cultural issues. In 2006 Spanish COMANSA invested $20.4 million to form a
production JV with Hangzhou Jie Holding, but the result remains to be seen.
Due to an ongoing flow of large infrastructure projects and rural expansions
in China, the demand for tower cranes of all sizes should continue to be strong,
and large and medium crane companies should continue to co-exist.
The Chinese crane industry should improve its technological capabilities
and quality levels of large tower cranes, in order to satisfy the requirements
from large engineering projects and export markets. The smaller cranes
segment needs to consolidate, in order to improve product safety and reliability.
In terms of technical developments, China's tower crane industry should develop
crane products of various structural types. Flat top cranes and luffing cranes
have gained significant progress in China in recent years. Because the boom
of a luffing crane can flexibly manoeuvre r to some extent, suitable for projects
in high density and narrow fields, it has attracted increasing attention in the
Chinese market. In some steel structured skyscraper projects, such as Shanghai
World Financial Centre, new CCTV headquarter and International Trade Centre
3 in Beijing, various large luffing tower cranes have been imported from
Australia-based company FAIVO.
Tag:China, tower crane, market,analysis
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