Construction Machine Blog

U.S. construction equipment manufacturers suffered an estimated 43 percent decline in business in 2009, according to a survey conducted by the industry trade group Association of Equipment Manufacturers.

Respondents to the survey of U.S.-based companies on average expected a 5 percent increase in business in 2010, followed by gains of 15 percent in 2011 and 14 percent in 2012, not enough to erase severe losses of both business and jobs. The outlook for the export-driven industry is only a little less dismal outside U.S. borders.

For Canada, 2009 business decreased an estimated 34-percent overall. Respondents expected a 2010 increase of 7 percent, a 14 percent increase in 2011 and an 11percent increase in 2012.

Industry business to the rest of the world was expected to close out 2009 with losses of 34 percent, followed by a 2010 gain of 7 percent and growth of 13 percent in 2011 and again in 2012, according to the AEM survey.

“Even with a modest rebound in the next few years, the construction equipment industry will still be down by double digits, and there will still be double-digit industry unemployment,” said AEM President Dennis Slater. “This is not surprising given the continued instability of the housing market and no long-term commitment to America’s roads, rail, airports, water distribution and ports to move people and goods efficiently and safely, and to compete effectively in the global marketplace.”

Survey respondents said the state of the overall economy, including credit availability, interest rates and consumer confidence levels will influence construction equipment sales in the coming years. Housing starts and highway funding levels will also play a major role in any business rebound. Other major factors are the strength of the U.S. dollar and international business, since the industry is export-intensive, said AEM.

AEM is the North-American based international trade group representing the off-road equipment manufacturing industry. Each year it surveys its construction equipment manufacturer members about expected sales of the machines that build and repair roads, bridges, houses, offices, schools and other infrastructure in America and worldwide.

FORT PIERCE — The second phase of earthquake relief for Haiti is under way as 200 tons of heavy equipment and building materials are being loaded onto a cargo ship Monday at the Port of Fort Pierce.

Once full of supplies for Samaritan’s Purse International Relief, the Caribe Star 1 is expected to set sail Monday night and arrive Friday morning at the dock of a former cement factory near Port-au-Prince.

As the supplies and equipment were being positioned at the port Monday morning, Luther Harrison, director of North American projects for Samaritan’s Purse, said the Boone, N.C.-based charity already had a team of 60 in Haiti when the earthquake hit.

Since then, he said, 19 medical personnel at the Baptist Haiti Mission Hospital in Fermathe southeast of Port-au-Prince have been treating wounds, performing surgery and caring for the sick. Also, 40 Samaritan’s Purse staffers are distributing rolls of plastic for temporary shelter, solar flashlights, blankets, community water filters and water purification packets.

“We’ve been partnering with (Fort Pierce-based) Missionary Flights International to fly in food and medicine,” he said. “Now it’s time to send in the big stuff, the stuff that’s too big to put on a plane. We’re coming out of the emergency phase and into the recovery phase. The whole infrastructure down there has been destroyed, and we have to rebuild every aspect of it.”

Dr. David Gettle, chief medical adviser for Samaritan’s Purse, said in a prepared statement that wounded and sick earthquake survivors “are coming to us by the busloads. Without the ability to transport supplies through the rubble-strewn streets, we will not be able to treat them.”

Cargo on the Caribe Star 1 will include excavators, hydraulic hammers, a bulldozer, dump trucks, a tractor-trailer, flatbed trucks, vans, pickup trucks, Bobcat loaders, plastic pipes, plastic sheeting and lumber.

Harrison said half the vehicles were bought just last week at sites as far-flung as New Jersey, Arkansas and Virginia.

Getting all the equipment to Fort Pierce in a hurry should have been a logistical nightmare for the faith-based nonprofit headed by Franklin Graham, son of evangelist the Rev. Billy Graham.

“God has been steering us in the right channels,” Harrison said.

Ships typically located throughout the world carrying combat loads were being loaded with construction equipment bound for Haiti.
Depending on weather, the three Military Sealift Command ships – crane ship Cornhusker State and motor vessels PFC Dewayne T. Williams and Cape Ray – could be headed to Haiti Tuesday with the supplies to help clear the rubble and build temporary piers and causeways to deliver more supplies.
Already, one of the ships is slated to return to Norfolk to pick up additional supplies and make another trip to Haiti, said Lt. John Fairweather, detachment officer in charge of Command Naval Beach Group 2.
“Normally, Hampton Roads doesn’t see these ships,” Fairweather said.
Overall, he said the crews are looking forward to helping with the relief efforts.
“Not one of these people has a problem with going,” he said. “It’s a heartfelt thing.”

BEN HILL COUNTY, GA (WALB) –At 16 percent, Fitzgerald has one of the highest and longest running unemployment rates in the state.

But in the next couple months, construction will begin on a new energy plant, which will create much needed work in the area.

Ben Hill County may be a small community but many folks are dealing with a tremendous loss.

“In the last 18 months we’ve lost over 1,500 jobs and in a community of 9,000 that’s a shock,” said John Flythe, Director of Economic Development.

But In a matter of months things will change. Construction will begin on one of the first biomass plants of its type in the region…Fitzgerald Renewable Energy LLC.

“It’s a 50 megawatt power plant and they will be utilizing 600,000 tons of wood which translates into 15 million dollars worth of purchase of raw material in and around the community,” said Flythe.

Sawdust, bark and wood chips will be used to fuel the 232 million dollar project.

“I think if you looked long, and hard you couldn’t find a better site because it sits between three suppliers of raw material,” said Flythe.

The plant sits right next to Southern Veneer, which will likely supply most of the wood, and limit transportation costs.

But most importantly, the plant will create long term work in the area.

“In the tree farming community that will employ 120 to 150 employees,” said Flythe.

During the maximum construction phase up to 250 workers will be needed.

“The 250 jobs they will be renting hotel rooms, buying gas so that will help the community,” said Flythe.

The plant will also create 25 jobs.

“The 25 permanent jobs will be paid a better than average wage in the community,” said Flythe.

Right now, Alternative Energy is the main focus for city leaders and people can expect to see similar projects in the future.

“Congress passed all these incentives and when there are incentives we are going to go after them. It creates jobs and its long term jobs its not cycle jobs,” said Flythe,

Construction is slated to begin in early March.

City leaders say they are also working on getting another plant to locate in Fitzgerald. It will be a 2.1 billion dollar coal plant which will likely employ up to 1500 people during construction, which will take 3 or 4 years.

Once operational it will be one of the cleanest solid fuel power plants in the United States.

Officials expect commercial operation at the plant will begin in the next couple years.

Presently, Chinese construction machinery is mainly sold through cash, mortgage and financial leasing. The mortgage occupies about 40% while the financial leasing only takes up 20%. Nevertheless, some Chinese large and middle construction machinery manufacturers have begun to adopt the financial leasing attracted by its convenience. In recent years, Chinese government has also issued relevant policies. The prospect of the financial leasing maintains optimistic, tending to be the dominant sales mode for the construction machinery industry.

As an emerging equipment financing mode, the financial leasing develops fast in recent years thanks to its low down payment, long repayment period, wider room for maneuver and convenient operation. Many Chinese construction machinery manufacturers adopt the financial leasing to increase their product sales volume, acquiring steady and continuous cash flow. Meanwhile, clients can also achieve the use right of equipments to raise their returns based on less funds and low time cost.

Construction machinery manufacturers can establish their own financial leasing companies to facilitate the fulfillment of rights and responsibilities of participators while reducing intermediate links in the product lease and purchase process for clients. Because many construction machinery clients face the delayed payment of the construction funds, they mostly concern the financial support policies and the flexibility of product rent payment of enterprises.

Domestic and foreign investors actively carry out their layout on Chinese financial leasing market to take the initiative. In 2002, Zoomlion Heavy Industry Science & Technology Development Co., Ltd set up the first construction machinery financial leasing company in China. In March 2009, Zoomlion established Zoomlion Finance & Leasing (China) Co., Ltd in Hong Kong with the funds of USD 80 million. In March 2009, Liugong Machinery Co., Ltd set up Liugong International Leasing Co., Ltd. with its wholly-owned investment arm in Hong Kong. On March 21st, 2009, attracted by the optimistic prospect of the financial leasing market, Shantui Construction Machinery Co., Ltd invested RMB 180 million to set up Shantui Leasing Co., Ltd in Beijing. In 2009H1, XCMG Construction Machinery Leasing Co., Ltd of Jiangsu realized the revenue of RMB 1.5 billion. In the previous three quarters of 2009, the revenue of Liugong International Leasing Co., Ltd exceeded RMB 1 billion.

In November 2009, after releasing the Technical Specifications of Second Hand Equipment Circulation, China’s Ministry of Commerce begins to completely investigate the second hand machinery trading market again, planning to formulate the related exit mechanism to set up the standard platform for the downstream second hand trading market of the financial leasing industry.
Chinese construction machinery financial leasing market will maintain the high-speed growth in the coming years. The market scale is expected to exceed USD 10 billion in 2014.

Terex Corporation (TEX), the world’s nr. 3 maker of heavy duty-moving equipment has agreed to sell its mining division to construction and mining equipment manufacturer Bucyrus Int’l Inc. (BUCY) for $1.3 billion in cash.
The transaction, which is structured to be an all-cash acquisition and doesn’t require shareholder approval, is expected to close in the first quarter of 2010, the companies said.
“Customers will reap benefits from this transaction as Bucyrus will be able to offer a broad, complementary product line that is driven by technology, quality, and first-class service,” said Tim Sullivan, Bucyrus CEO, in a statement late Sunday. ”
South Milwaukee, Wisconsin-based Bucyrus said the Terex division being sold has 38 facilities around the world with approximately 2,150 employees. Bucyrus –a company with annual revenue of about $2.75 billion and 7,200 employees — also said that the acquisition would create a “premier supplier of mining equipment”, place a team of 10,000 people in nearly 100 locations around the world, and most importantly, double the co.’s addressable market from about $15 billion to $30 billion.
Under the terms of the agreement, which is subject to regulatory approvals, Westport, Conn.-based Terex may request to receive $300 million of the purchase price in the form of Bucyrus shares based on Bucyrus’ current trading price (BUCY closed on Friday down $1.42 at $50.84).
“This transaction accelerates the transformation of Terex Corporation as we move from a Construction and Mining Equipment Company to a Machinery and Industrial Products business,” said Ronald M. DeFeo, Terex Chairman and CEO. “The approximately $1 billion of after-tax proceeds will allow Terex to invest in its current, high return-on-capital businesses, or to look to add new, well positioned niche manufacturers with strong market presence to the company’s portfolio,” DeFeo said.
reenhill & Co (GHL) advised Bucyrus in the transaction, and Goldman Sachs (GS) advised Terex, which held a several-months auction of the unit.

A construction worker has been killed in a construction accident on Guemes Island.

The Anacortes Fire Department says a house fell off of its foundation Saturday afternoon and crushed a 57-year-old construction worker to death.

The department says workers were lowering the house to comply with building codes when it slipped. All of the workers except one was able to safely get away from the structure.

The Skagit County Sheriff’s Office says that the victim is an employee of the construction company involved in the accident.

Rescuers and equipment are being ferried over from Anacortes, which is just south of Guemes Island.

Union Minister for Road Transport and Highways, Kamal Nath, inaugurated, South Asia’s largest trade fair for Construction Equipment and Construction Technology. This year, in it’s 5th edition, the number of exhibitors increased by 55% and display area grew by 60% over 2007.

Delivering the inaugural address, Kamal Nath stressed on the need to focus on India-specific products, India-specific R&D and skill development to drive growth for the Indian Earthmoving and Construction Equipment Industry (ECE). He said that there is a need for huge capacity building across the entire spectrum of the infrastructure industry – from engineers, contractors, consultants, construction equipment manufacturers, etc, to enable the government achieve the target of constructing 7000 kms per annum.

Between 2004 and 2007, India’s earthmoving and construction equipment industry’s revenue has grown at over 40% each year, reaching US $2.3 billion in 2007. This figure is expected to reach US $ 12-13 billion in 2015.

Mr Ranaveer Sinha, Chairman, Indian Earthmoving  & Construction Industry Association Ltd (IECIAL), said that the size of the global construction equipment (CE) industry is US$ 100 billion while that of India’s is US$ 4 to US$5 billion. He said that the size of the industry is expected to double in 4 to 5 years.

“There is a great opportunity in the area of export, where India, as a low-cost manufacturing base, can become the factory of the world. We should look at not only exporting equipments but also components, design and R&D. Indian construction equipment industry is expected to significantly change in the next decade and this will be driven by a few growth drivers – first of all it is the unprecedented infra spend, second is dominance of price-value focused customers, third is the broader engagement of global original equipment manufacturers,” Mr Ranaveer Sinha said.

C R Swaminathan, Chairman, CII-Southern Region said that the Indian construction industry is estimated to have a turnover of US$ 60 billion in the current year. This sector employs 31 million people, the second largest, next only to agriculture. It consumes 40-50% of national plan outlay and accounts for 20% of GDP.

Vipin Sondhi, Chairman of Excon 2009 and Managing Director of JCB India, said that factors including the stimulus given by the government for infrastructure development, presence of the stable and proactive government, continual articulation of government about the thrust given to infrastructure development and dynamism of ministers in the government are giving big boost to the growth of the Indian infrastructure and ECE industry.

He feels that the Indian ECE industry will be a US$15 billion industry by 2015 – however, to fully realize the potential, there should be concerted and well-coordinated efforts by the industry and the government. The key focus area of such an effort should be on increasing the availability of trained man power in the country.

Kamal Nath said that with it’s strong fundamentals, India is very well on the growth trajectory – the economy is set to achieve a 6.5% growth this year and aims to achieve 8% growth in 2010 and 9% in 2011. Though India felt the tremors of economic slowdown, it’s matured and strongly regulated financial system did not collapse.

He said that as the country grows, the biggest deficit in infrastructure will be in the road sector. India has 3.4 million kms of road, which is the second largest in the world. Over 40% of the road transport takes place on national highways, however out of the 70,000 kms of highways, 17,000 kms are one-lane highways.

Serious business - with building project worth billions of dollars under way, the Big 5 PMV is a key event for the regional construction industry.

With billions of dollars worth of building projects under way in the Middle East, the construction industry is putting on a huge show of resilience in Dubai this week – helped by some of the best movers and shakers in the business.

Worldwide suppliers of plant, construction vehicles, machinery and equipment were locked in serious discussions with buyers as the Big 5 PMV entered its second day today, with the international trade event also showing a “lighter” side.

The UK-based Diggerland JCB Stunt Team – better known as the “Dancing Diggers” – have quickly become show favorites at Dubai International Convention and Exhibition Centre with their expertly choreographed “formation dancing” to music.

Comprising five giant JCB diggers and a mini Bobcat loader, this powerful line-up of mechanical muscle display the kind of versatility which makes them vital to operations on building sites across the region, and around the world.

With almost 3,400 civil building projects worth around US$1.35 trillion in progress in the Middle East, major orders are expected for much of the massive plant, vehicles, machinery and equipment on show at the Big 5 PMV before the curtain comes down on Thursday evening.