Business environment

Globalization will underpin demand

The long-term underlying demand outlook for the lifting industry and related services is expected to be positive. Companies will grow in size, businesses will globalize, demands for efficiency and profitability will increase and large, globally operating customers will want to deal with similarly sized suppliers.

Clear difference in trends between developed and emerging markets

Productivity demands and environmental awareness are increasing in the developed industrial countries, bringing with them requirements for better technology, automation and systems. In order to optimize their cost structures, industrial firms shift their production to more cost-competitive regions and outsource such sectors as their maintenance. This creates demand in the developed markets for new, high technology products because the remaining production has to meet the stiffening demands for productivity and profitability. The transfer of production from the industrial countries also creates demand for lifting equipment in the emerging markets. The need to invest in higher technology, environmental friendliness and safety issues also increases in the emerging countries, via the western operators. Years of good market conditions and the increasing need to improve living standards have laid a solid foundation for powerful economic growth. In the long-term that growth will fuel the need to raise industrial capacity and energy investments. Globalization of the industrial base will also increase the international flow of goods.

Substantial potential in lifting equipment related services

The overall market for industrial crane and container handling equipment servicing and modernization, and for machine tool servicing, is estimated at more than 30 billion euros. The potential for service business is therefore enormous compared to the size of the existing suppliers. The service market is extremely fragmented and most of it is dominated by the customers’ own service organizations. Furthermore, customers are paying greater attention to productivity and profitability, which is increasing the trend for outsourcing
non-core businesses such as maintenance. This trend is concentrated in the industrial countries but is expected gradually to filter to the emerging markets.

Competition

The market for lifting equipment and related services is dominated by numerous small and local suppliers. Konecranes has identified e.g. following companies on the international lifting equipment and related services market:

Demag Cranes AG, Germany
Columbus McKinnon Corporation, U.S.A.
Kito, Japan
Abus Kransysteme GmbH, Germany (private company)
ZPMC, China
Kalmar (part of Cargotec Corporation), Finland
Fantuzzi Group, Italy (private company)
Liebherr, Germany (private company)
Svetruck, Sweden (private company)
Taylor, U.S.A (private company)
Hyster, (part of the NACCO Materials Handling Group – NMHG), U.S.A