Construction WorX - Issue 5 - February 2014

The Voice of the UK Construction Equipment Industry

ISSUE 05 FEBRUARY 2014

GROWING USA MARKET ATTRACTS CEA EXPORT PUSH

CONEXPOCON/AGG 2014 PREVIEW

NEWS

6-10

16-23

HARD DATA

24-26

TECHNICAL BRIEF

30-33

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CONTENTS 4

F ROM TH E PRE SID E NT

Nick Ground is hoping for growth in 2014

6- 1 0 M E M B E R NE WS

The latest news involving members 12 I N TH E L OB B Y

New groups within the CEA and changes on the management council

16 - 2 3 C O N E X PO PRE V IE W As the North American market prepares for one of this year’s biggest shows, we look forward to CEA member participation

24 - 2 6 H A RD DATA Frank Manfredi takes a closer look at the North American equipment market and predicts steady growth this year

28

OV E R TH E HORIZON

With the prospect of continued growth in North America, we look at which machines are set to be the big sellers

30 - 3 3 TE C H N I C A L BRIE F As manufacturers come to terms with Stage IV emissions regulations, legislators are already looking forward to Stage V

34

A N TA RC T IC TRIP

Two Finning service engineers have returned from an incredible journey across the frozen Antarctic

2014 4-8 March Conexpo Las Vegas, USA

Bauma China Shanghai, China

24-26 June

15-18 December

36 - 3 7 I N TE R N ATIONA L & C OMING U P

Hillhead 2014 Buxton, Derbyshire

Joanna Oliver reviews a successful CEA mission to South America

2015

38 YO UR S H OUT

World Highways editor Mike Woof looks forward to further infrastructure work in China

25-28 November

bC India Delhi

20-25 April

2-4 June

Intermat Paris, France

Plantworx 2015 Bruntingthorpe, Leicestershire

D AT E S F O R YO U R D I A RY

The Construction Equipment Association (also trading as CEA) is a company registered in England and Wales with company number 04930967.

VAT number 243 3858 54.

Registered Office: 1 Bickenhall Mansions, Bickenhall Street, London, W1U 6BP, UK The secretariat of the CEA, Administration Services Ltd (www.admin.co.uk), has been awarded accreditation by the AMC Institute (www.amcinstitute.org), the global trade association representing the association management industry.

Although care has been taken in preparing the information supplied in this publication, the CEA does not and cannot guarantee the accuracy of it. The CEA cannot be held responsible for any errors or omissions and accepts no liability whatsoever for any loss or damage howsoever arising. The views do not necessarily represent those of the CEA. Construction WorX is printed by: pb DIGITAL Limited Contact: Paul Bennett Tel: +44 (0)1489 780 781 E-mail: paul.bennett@pbdigital.co.uk www.pbdigital.co.uk

The Construction Equipment Association Airport House, Purley Way Croydon CR0 0XZ United Kingdom Tel: +44 (0)20 8253 4502 Fax: +44 (0)20 8253 4510 E-mail: cea@admin.co.uk www.coneq.org.uk

4

FROM THE PRESIDENT C E A M A N AG E M E N T COUNCIL President Nick Ground GKD Technik Ltd

Vice president Nigel Baseley Perkins Engine Co Ltd

Paul Ross Ricardo Plc

Paul Fennessy Volvo Construction Equipment Ltd

James Venerus

Happy New Year to all our members and readers.

Welcome to 2014, when we get to find out if the pundits’ predictions from our September conference come true, I hope they don’t, we really need more than 1% growth in our industry!

After the effort and excitement of running the first Plantworx show last year we could be forgiven for thinking that 2014 will be a quieter year for the CEA. However the Plantworx show team is hard at work already, promoting and organising for next year and early bookings suggest ‘bigger and better’.

Our General Technical Committee is already engaged in a number of challenging EU proposals, including the proposed merger of the Noise Directive which may have far reaching implications to our industry, the ever ongoing exhaust emissions regulation and engaging with the HSE with regard to inadvertent operation of controls. But please remember that they are here to help, whichever part of the CE sector you are involved in, even if your product doesn’t have an engine.

The CEA overseas calendar has three international trade shows this year; ConexpoCon/Agg in Las Vegas, Bauma China and bC India (which moves to Delhi in December, earlier than previously advertised). There are also three proposed trade missions, to Saudi Arabia, Mongolia and Brazil/Chile. Don’t forget too the International Business Group meetings held here in the UK, which even seasoned exporters find an invaluable networking resource.

There have been some changes to the composition of the Management Council in the last months. Val Ledden and Robert Drooglever have resigned, as they both move to other roles in the industry, and we welcome Paul Fennessy (director of aftersales at Volvo), Tim Green (global engineering director BCP at Caterpillar) and Alan Batty (managing director of Bomag in the UK). A big thank you to Val and Robert for their work for the CEA and a warm welcome to Paul, Tim and Alan.

Last year we moved the CEA annual conference date from the traditional AGM slot because of Plantworx. For consistency the management council has decided to make this change permanent, so block out your diary now.

Is 2014 going to be quiet? I don’t think so!

Komatsu UK Ltd

Rory Keogh Gomaco International Ltd

Mike Hawkins CNH UK Ltd

Keith Dolbear TriMark Europe Ltd

Daniel Thompstone JCB Sales Ltd

Tim Green Caterpillar Inc

Alan Batty Bomag

C O NS TRU C TIO N WO RX IS PRO DU C ED B Y: Editor - Dan Gilkes email: dangilkes1@mac.com CEA/Plantworx correspondent Louise Murphy email: louiseamurphy@AOL.com Design and production Duncan Allen email: duncan.allen@pbdigital.co.uk Advertising - Peter Knott email: peter.knott@admin.co.uk Publishing Co-ordinator Molly Stirling email: molly.stirling@admin.co.uk

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Design, supply and fit

6

NEWS Great British Weld-off looks for champion welder CEA member company, Morris Site Machinery, suppliers of site equipment including Arcgen Welder Generators, is searching for the best welders in the UK. The Great British Weld-Off is a new competition open to young welders between the ages of 16-25 and is sponsored by hire company Speedy and global manufacturer of welding equipment Kemppi. The competition offers teams of four the chance to showcase their skills and knowledge in welding, through a series of competitive challenges.

The contest will reward the winning team with a host of prizes including a one year dedicated training programme with Morris Site Machinery and Speedy, one year’s membership with the welding institute and an Arcgen Weldmaker 165SP2 welder generator, worth £3,500, for the winning team’s workplace or college.

welding industry,” said Phil Winnington, managing director at Morris Site Machinery.

“This competition is an exciting new venture for us, focused on recognising talent and developing careers in the

“The Great British Weld-Off is an ideal opportunity for apprentices and students alike to receive a real kick-start into the industry, helping to develop skills and learn in a competitive environment.”

“As suppliers to the construction, rail, hire and events industries, we have a responsibility to invest in and encourage the next generation of welders, ensuring this traditional skill is recognised and appreciated.

Entrants will be required to demonstrate creativity, skill and safety awareness by participating in three head-to-head challenges in front of a panel of high profile judges, including Richard Denholm from Speedy, Michael Scarrott from EAL and Ian Hogarth from the Welding Institute.

The champions will be announced at an official awards ceremony on the evening of The Great British Weld-Off final, at the Morris Site Machinery headquarters in Wolverhampton on February 26, 2014.

Plant firms dig deep for Philippines rescue Towards the end of 2013, typhoon Haiyan left a trail of destruction across the Philippines, forcing more than four million people from their homes and leaving many families with nothing. The typhoon was one of the most powerful storms ever recorded on land and has left up to 2,500 people dead.

A number of construction machinery manufacturers volunteered machines, operators and funds to aid vital recovery work in the wake of the Philippines disaster. Hyundai Heavy Industries Group donated US$200,000 via the Korean Red Cross. A 21 tonne excavator, a backhoe loader and operators for the machines were also sent to the Philippines.

Doosan also provided construction equipment, sending five excavators and one wheeled loader to the area. Doosan also sent financial aid of $300,000, in coordination with the Korean Red Cross.

Britain’s JCB sent machines and generators worth more than $500,000 to assist in the aftermath of the catastrophe. The company offered three 3CX backhoe loaders to help with the clear up operations. In addition more than 120 JCB electrical generators were provided through the company’s Filipino dealer Camec.

JCB chairman Lord Bamford said: “The human suffering and scenes of devastation in the Philippines have been heart-rending and I hope JCB’s contribution to the relief effort will help, in some small way, those who are bearing the brunt of this disaster.”

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9

NEWS CEA and Datatag deliver provenance check The CESAR security scheme, promoted by the CEA and supported by the Agricultural Engineers Association, has been further improved with a new online provenance check that will be available through Datatag in conjunction with HPI. The CESAR branded provenance check will provide new levels of assurance whenever a used machine is bought or sold.

The service was launched to the insurance and asset finance industries at JCB’s Rocester head office. JCB Finance, through its work on the FLA’s Asset Registration Group and directly with Datatag, has been one of the most active and vocal finance companies calling for such a service.

“CESAR has had a huge impact since its launch as it has reduced equipment theft and increased the recovery rate of stolen machines,” said CEA chief executive Rob Oliver.

“I am quite sure that CESAR provenance checks will help reduce the anguish and costs inflicted on legitimate businesses by buying or selling a stolen, cloned or fraudulent machine.”

The new service is simple to use and quick, providing an instant on-screen report about a machine’s potential hidden history. Using databases from HPI, CESAR, DVLA and the police, the provenance check is both comprehensive and secure. A machine’s 17 character VIN number, registration plate or CESAR mark can be used to start a history check on-line.

The service is available on-line via the CESAR or Datatag websites. A one-off check costs £29.99 with volume discounts available to businesses that register with the scheme.

Webtec single name After years of operating under different names in Europe and North America, a new, single name will define hydraulic measurement and control specialist Webtec. For years customers in need of reliable hydraulic test equipment and control valves have turned to Webtec Products for solutions they can count on to perform.

However, worldwide the company trades under numerous names including Webster Instruments, Webtec Products, Webster Messtechnik, and Webtec. The different brand names were initially selected to meet regulatory requirements in the countries served.

As the Cambridgeshire company’s 50th anniversary approaches, the firm’s directors have decided to unveil a single name, logo and web address to unify its offering worldwide. All company division will now be known simply as Webtec, using the website www.webtec.com.

Simkins leads RDS

Angela Simkins has been appointed as managing director at CEA member company RDS Technology. As a Chartered Engineer and Fellow of the Institute of Mechanical Engineering, Angela replaces Richard Danby, who had been with the company for 40 years.

From left to right: Superintendent Simon Tweats of Staffordshire Police, Julie McClean from HPI, Darren Green from HPI, the CEA’s Rob Oliver, Kevin Howells of Datatag and Barry Mudie from the Met Police

ISSUE 05 - FEBRUARY 2014

“Following the acquisition of RDS by the US company Digistar in late 2012 and the expanded technology base, the company is now poised to further enhance its current leading position in this growth market, in both the agricultural and construction sectors,” said Ms Simkins.

10

MEMBER NEWS Changes at JCB

Rental scheme pushes Prolec systems

JCB has replaced two senior directors, in the UK and the USA. Graeme Macdonald takes over as CEO at JCB’s head office site in Rocester, Staffordshire, with the retirement of Alan Blake, while in the US Arjun Mirdha takes on the role of president and CEO of JCB in North America following the retirement of John Patterson CBE.

Prolec has launched a machine guidance rental scheme to allow operators to gain the benefits of using advanced tools without the layout so often required to buy such a system. Aimed at operators who have a one-off job that requires machine guidance, or those who would like to trial a system before committing to it, the rental scheme offers the opportunity to improve productivity, efficiency and margins. It also makes Prolec’s guidance systems accessible to smaller companies, where expenses need to be matched closely to income.

Prolec’s rental scheme covers all of its machine guidance products, including Digmaster, Digmaster Pro and pcX

Arjun Mirdha Mr Blake had been with JCB since 1989 and will remain an advisor to JCB. Mr Patterson had been with the company for 43 years, starting out as a field service engineer before rising to the position of Group CEO. He then moved to the USA to become chairman and CEO of JCB Inc in Savannah, Georgia.

“I am proof that there are no boundaries to career development at JCB,” said Mr Patterson.

“I have had an incredible time over the past 43 years. I am proud to have been part of a team which has seen JCB become the world’s third largest construction equipment manufacturer.”

Pro. Systems available for rental range from 2D and 3D guidance, through to a GPS set-up. GPS can be provided from Prolec’s own supplier, or can be incorporated into an existing GPS system, as Prolec products are set up to be compatible with 99% of all GPS providers worldwide.

Full training is provided to ensure operators are confident in using the system, and that it can be used to its full capacity, thus gaining the most benefit from the rental cost. The scheme is being offered through all Prolec distributors. Any customer deciding to subsequently buy the kit, will be refunded 50% of the rental cost.

Tata offers outsourcing expertise Tata Technologies is the latest company to become a member of the CEA. With more than 25 years of specialist expertise in engineering and design, product lifecycle management (PLM) and enterprise IT, the company possesses proven expertise in applying innovation for low cost product development engineering for some of the best names in the business. With its acquisition of Cambric heralding an ambitious growth strategy, Tata Technologies is investing heavily in the construction sector.

In the context of an increasing shortage of engineering skills in the UK, Tata Technologies can also help member

companies determine and implement the best use of outsourcing through intelligent sourcing, of iSourcing. Rather than simply pushing work offshore to augment staffing, a range of influencing criteria such as geographical dependency, process-toprocess dependency, business criticality and the level of required experience are considered before outsourcing models are suggested.

“We have joined the CEA as it provides an excellent forum to listen to and understand the needs of stakeholders within the industry,” said director of strategic accounts Lindsay Watson.

All welcome at Strategic Forum meeting

Graeme Macdonald

The Construction Plant-hire Association (CPA) will be holding its Strategic Forum Plant Safety Group Outreach Meeting at the Executive Hire Show in Coventry this February.The forum will discuss topics including operator competence for telehandlers, including new work on suspended loads, ground conditions, MEWPs and crushing.

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Delegates will need to register for the Executive Hire Show, but the meeting, to be held in the Jaguar Suite at the Ricoh Stadium on Wednesday February 12, 10.30am-13.00pm, is free and open to all. Visitors are invited to attend one or all three sessions. For more information contact Kevin Minton at kevin.minton@cpa.uk.net.

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12

IN THE LOBBY RE C O R D C OV E RAG E FO R C E A Totting up the references to the CEA and our projects online, in the press and in other media is a slightly inexact science, but there is no doubt that 2013 was a record year for us on the communications front. It is important that we continue to grow our profile as an organisation, as this helps inform the wider community, government and its agencies and you about our work.

We now have a growing social networking presence and had national TV coverage for our first Plantworx event.

Construction Worx too had proved a great communication medium as its reach has grown to well over 10,000 industry professionals and stakeholders. We also plan a website redesign this year to further improve our profile.

NEW A DVI S O RY G ROUPS A new Strategic Advisory Panel is in the process of being set up to help develop the CEA’s reach and influence with the wider construction and engineering community. The Panel will comprise leading invitees from the worlds of academia, construction and manufacturing, and from government agencies. The target is to confirm the remit and composition of this new group by April 2014. There will also be a new Skills Working Group set up to respond to companies’ concerns about the continuing dearth of suitable recruits for engineering and related roles.

technology and materials developed in complementary sectors such as automotive, aerospace and energy. To supplement these discussions, the CEA will also be refreshing its sector study to help identify those technology and market drivers that might be suitable for cooperative TSB-style projects.

“I very much look forward to working with fellow members of the Management Council and hope that my background and experience will offer a benefit to the activities of the CEA.”

MANAGEMENT COUNCIL CHANGES

“I would like to extend a very warm welcome to Paul and, speaking on behalf of other CEA Management Council Members, we are looking forward to working with him and sharing in his knowledge of our industry,” said Rob Oliver.

Paul Fennessy, aftersales director at Volvo Construction Equipment in Great Britain, has joined the CEA Management Council, replacing Val Ledden who has served as Volvo’s representative for more than five years.

Paul joined Volvo in 2005 and is responsible for the sales and distribution of parts, as well as the marketing and development of aftersales products and services. He has over 19 years’ leadership experience in capital equipment sales and customer support and a degree in Mechanical Engineering.

“I am delighted to have the opportunity to become part of the team at the CEA and contribute to its future success,” said Mr Fennessy.

“I would also like to say thank you to Val Ledden, who served as Volvo’s representative on the Management Council for over five years and wish him the best of luck with his future endeavours with Volvo.”

The CEA also welcomes Tim Green of Caterpillar and Alan Batty from Bomag to the Management Council. There will be more news on these and other changes to the team in the next issue of Construction Worx.

Rob Oliver Chief Executive Construction Equipment Association

I am delighted to have the opportunity to become part of the team at the CEA and contribute to its future success.

I very much look forward to working with fellow members of the Management Council and hope that my background and experience will offer a benefit to the activities of the CEA.

TE C HNOL O G Y ST R AT EG Y BOA RD The CEA is talking with the Technology Strategy Board to examine prospects for working together on our shared objective of stimulating innovation. The TSB is the UK’s innovation agency and offers support and funding to help business develop new products and services and bring them closer to the market.

The construction equipment sector is the logical choice for an innovation programme, as it adopts and adapts

He is based at Volvo CE’s head office in Duxford near Cambridge, where he lives with his wife and two daughters.

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14

PLANTWORX 2015 NEWS PLANTWORX 2015 ‘GRAND STAND DRAW’ A BIG HIT! The Plantworx Construction Exhibition 2015 Grand Stand Draw, took place in November 2013 at the CEA’s south London headquarters. The draw, sponsored by video channel Diggers & Dozers and broadcast live on You Tube and the Plantworx website, allocated leading manufacturers their Maxi/ Anchor Stands in a ‘World Cup’ type draw.

The Maxi/Anchor stands are the largest stands available at the show and are strategically placed around the showground to maximise both the exhibitor and visitor experience.

Seventeen companies were involved in the draw, all having committed to exhibit at the 2015 show. They included Altrad Belle Group, Ammann, Bomag, Case Construction, Cautrac, Doosan, Finning, Hyundai, JCB, Kubota, Liebherr, Marubeni Komatsu, Merlo, Takeuchi, Thwaites, Volvo and Wacker Neuson.

Rob Oliver, chief executive of the CEA kicked off the proceedings alongside Angela Spink, Plantworx sales manager and SimonFrere Cook, exhibition director.

“The Grand Stand Draw for the allocation of the maxi stands very clearly demonstrates the commitment that these major construction companies are making to Plantworx 2015,” said Mr Frere-Cook.

“The draw went without a hitch and all the participating exhibitors have reported that they are happy with their positions on the showground.

“Based on this commitment from these leading brands we now have a very firm base around which we will continue to build the next event, improving and building on the success of last year’s show. We are very pleased to have achieved this commitment, this is a very clear indication of the construction industry’s desire to hold Plantworx with its working demonstrations once again in 2015 and the industry’s support of the new venue.”

“The 2013 Plantworx show was brilliant for us both in real business and also in terms of reinforcing our growing status in the

UK Market,” said Rick Still, sales director of Hyundai Heavy Industries Europe.

“Getting in front of potential customers and showing just what our machines can do really works for us, which is why we did not hesitate in committing to Plantworx 2015 and participating in the Grand Stand Draw.”

Altrad Belle, winners of the Best Demonstration Award at last year’s Plantworx, decided that for the 2015 event it would take an Anchor stand and join in the draw. Managing director Ray Neilson said: “It is a great honour to be shortlisted for one of the 17 Anchor Stands, especially when you consider the vast number of exhibitors.

“The lottery method of allocating stands to shortlisted exhibitors also paid dividends in awarding us one of the best stand locations available. Following the sheer success for us and the show in general at last year’s inaugural event, we look forward to Plantworx 2015”.

Plantworx sales began on December 2, 2013 and stand bookings are coming in thick and fast. Some of the companies that have booked alongside the 17 draw companies include Airseal Products, BPH Attachments, CPA (Construction Plant-hire Association), Genquip Groundhog, Ground Guards, Halomec, Hillhead 2016, KHL, King Trailers, Leach Lewis Rubber Tracks, Miller UK, NC Engineering, Northerntrack, Power Torque Engineering, RDS Technology and Shindaiwa.

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To discuss any stand requirements for Plantworx 2015 please call Angela on 0208 253 4517 or email on angela.spink@plantworx.co.uk Plantworx will take place in 2015 at its new location of Bruntingthorpe Aerodrome in Leicestershire on June 2-4, 2015. The 2015 show will cover 135,000m2 and will use Bruntingthorpe’s Indy Circuit. The venue can more than accommodate the 2015 event based on 2013’s footfall and size, and also allows plenty of room for growth in the future. There are hard standing areas that will be used for both exhibition stands and car parking.

The ethos of the 2015 Plantworx event will remain the same as the very first show – a show for the industry by the industry, where construction machinery can be seen working in real site conditions.

“The draw went without a hitch and all the participating exhibitors have reported that they are happy with their positions on the showground. ” Simon Frere-Cook, Plantworx exhibition director

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16

CEA CONEXPO PREVIEW CONEXPO-CON/AGG 2014 WILL BE THE BIGGEST GLOBAL CONSTRUCTION EQUIPMENT SHOW OF THE YEAR. THE EXHIBITION TAKES PLACE AT THE LAS VEGAS CONVENTION CENTRE, IN LAS VEGAS, NEVADA, ON MARCH 4-8.

The show’s organisers are expecting more than 130,000 visitors, of which 42% will be contractors. There should be plenty for them to see, as the North American market’s continued recovery has spurred more than 2,400 exhibitors to book space in the Convention Centre’s numerous halls and external lots.

A comprehensive education programme will run alongside the show, with more

than 110 sessions concerning industry trends and issues, management and applied technologies. Topics will include aggregates, asphalt, business management best practise, concrete, cranes, earthmoving, equipment management and maintenance, recycling, safety and workforce development.

“Attendees will find the newest products and technologies and technical experts ready to discuss product features and applications. In the space of a few days, in one place, visitors can examine and compare the best of what our industries have to offer,” says Megan Tanel, show WWW.CONEQ.ORG.UK

director and Association of Equipment Manufacturers (AEM) vice president for exhibitions and events.

“In the space of a few days, in one place, visitors can examine and compare the best of what our industries have to offer.”

Megan Tanel, Conexpo-Con/Agg 2014 show director

17

“...we anticipate for 2014 that Conexpo-Con/Agg in March will once again be a great momentum builder for our industry.”

Dennis Slater, president and secretary, AEM “Depending on the specific equipment segment, the construction markets in North America are expected to be flat to slightly up in 2014.

Dennis Slater Though a major international exhibition, the domestic North American market will of course be the main driver for a successful show this year, with continued steady recovery being felt in many sectors.

However, while that growth has not been quite as rapid as many predicted at this time last year, market demand is expected to be strong. Indeed Conexpo itself will grow this year, with a record amount of show space being booked.

“The United States is still experiencing a pattern of slow growth,” says the AEM’s Dennis Slater.

“The first part of the year might be the better half, as the industry usually sees a Conexpo-Con/Agg “bump” in sales.

Often Conexpo-Con/Agg provides a first quarter increase, followed by a slower second quarter.

“It’s hard to find any truly booming bright spot in the North America construction equipment markets right now,” says Mr Osenga.

“But, other than mining, there don’t appear to be many severely depressed markets either.”

Among the many show stands, there will be a number of international pavilions, from the UK, China, Italy, Taiwan, Germany, Ireland and Korea. The CEA will once again organise and run the highly successful UK Pavilion at Conexpo.

“We were more optimistic early in 2013 for much stronger growth overall, but we anticipate for 2014 that Conexpo-Con/ Agg in March will once again be a great momentum builder for our industry.

The CEA is once again working closely with UKTI on the Conexpo Pavilion and exporting companies should always make contact with UKTI to see what assistance might be available.

“The UKTI USA team provides a range of bespoke offerings to UK companies to assist with market entry, including a chargeable tailored consultancy service (OMIS Overseas Market Introduction Service),” says Richard Colley, vice consul at UKTI Chicago with a focus on supporting trade in Advanced Engineering and Manufacturing sectors across the Midwest region.

Additionally, he leads UKTI’s US activities across the construction equipment and commercial vehicle sectors.

“This can include market information (research/competitors), contacts (agents/ distributors/partners) and relevant events (product launch/workshops),” he says.

“The UK point of contact for all global business expansion plans is an International Trade Adviser (ITA), who can provide companies with further information about UKTI’s services and any funding that may be available to perform market research and visits. To find your ITA follow http://www.ukti.gov.uk/export.html.

“Continued uncertainty in the marketplace caused by federal government gridlock has hurt business results and dampened business confidence. Key global markets remain sluggish.

“The best way to explore the variety of trade services that UKTI offers is to visit https://www.ukti.gov.uk, and click on the Export tab at the top of the page. From there, you can select whether you are a new exporter or an experienced exporter.”

“However with many companies delaying a buy decision, the uncertainty has actually helped rental company growth in utilization and rates.

“The energy market also continues its growth, with fracking and natural gas, while residential housing is still moving in a positive direction.”

Mike Osenga, publisher of industry titles Diesel Progress North America and Diesel Progress International, agrees.

The UK Pavilion provides 20 UK companies with a high profile presence at the show, where smaller individual stands can often be lost in the many exhibition halls. However it also provides a central focus for other UK companies, CEA members and visitors to meet and do business throughout the show.

Richard Colley ISSUE 05 - FEBRUARY 2014

For companies with any questions, who would like to discuss support for their US objectives in the lead up to Conexpo, contact Richard Colley of UKTI Chicago at richard.colley@fco.gov.uk or 001 312 970 3846.

18

CEA CONEXPO PREVIEW VOLVO

Stands 10951 / 1300

Volvo Construction Equipment will take the wraps off its Tier 4 Final/Stage IV engine technology at this year’s Conexpo show. The company claims that it has achieved cleaner exhaust emissions with, in many cases, more power and increased efficiency.

Volvo will also show its latest E Series crawler excavators, G Series articulated haulers and H Series wheeled loaders, all of which will use the new engines.

The stand won’t just show off Volvo’s muckshifting abilities however, the firm will also demonstrate a new P7170 paver, one of the road division’s most important products.

On the external section of the firm’s stand, customers will be able to try their hand at the controls of a Volvo BL60B backhoe loader and an EC55 midi excavator, with

JCB

prizes available for the best operators of the day.

Though it might be too early for any machines to be present on the stand, no doubt personnel will also be keen to

DOOSAN

Stand 1559

JCB is preparing a number of new and improved machines for Conexpo, but has as yet only revealed two. These are the new 525-60 compact telescopic handler and the Tier 4 Final version of the company’s rough terrain fork lift (RTFL) line-up.

The company 525-60 has a maximum lift height of 6m and a lift capacity of up to 2.5 tonnes, yet the machine is

discuss Volvo’s recent purchase of the articulated hauler and rigid dump truck businesses of Terex, and the way in which those products will be integrated into the larger Volvo company.

just 1.8m wide and 1.91m tall. Power comes from a Tier 4 Final diesel engine developed by Kohler for JCB. As with other JCB machines the engine reaches Tier 4 Final without the need for a costly diesel particulate filter (DPF).

It’s a similar story for the revised RTFLs, which are equipped with JCB’s own Ecomax Tier 4 Final diesel engine.

Producing 74hp, the Ecomax also does without a DPF or any complex exhaust after-treatment.

Stand 1501

Conexpo provides the launchpad for Doosan’s Tier 4 Final/Stage IV engine line-up in its excavators, ADTs and wheeled loaders.

At present the company is not revealing the combination of technologies that will be used to meet this level of exhaust regulation.

Other machines on show, equipped with existing Tier 4/Stage IIIB engines, will include the DX140LCR-3 crawler excavator, the DX190W-3 wheeled excavator and the DL200-3 wheeled loader. While the 14 tonne reduced radius excavator uses a Cummins engine, both of the wheeled machines are powered by Doosan’s own diesel motors.

Tier 4/Stage 4 engines will also make their first appearance in Doosan division Bobcat’s skid steer loader range at the show. As one of the biggest selling machines in the US market, Bobcat’s 500 series skid steers will meet this emissions level without the need for a diesel particulate filter (DPF).

Bobcat promises increased torque from the revised engines, for improved productivity.

The engines will be available in both wheeled S530, S570 and S590 skid steer models and the T590 compact tracked loader, all of which feature vertical lift path loader arms for maximum reach when loading.

WWW.CONEQ.ORG.UK

Construction Equipment Association UK Group Networking Reception and Whisky Tasting

The GOMACO Commander III The World’s Most Versatile Slipform Paver

Conexpo-Con/Agg 2014

16.30 – 18.00 Thursday 6 March CEA Information Centre - Central Hall 2 40424 The President and Officers of the UK Construction Equipment Association invite you to meet the CEA UK Group members at Conexpo-Con/Agg 2014 and network over a few glasses of fine malt whisky at Conexpo on Thursday 6 March.

The event has been generously sponsored by UK Trade and Investment and is an excellent opportunity to network whilst sampling some excellent malt whiskies from around Scotland and experience the subtle nuances between the Scottish regions (alternatives available for non-whisky drinkers!).

Invited Guests include representatives from the UK Government, Conexpo and IFPE Organisers, International Trade Associations and the leading global OEMs. You are welcome to bring a colleague. To help us with numbers please RSVP to Gill Stirk – gill.stirk@admin.co.uk by Monday 24 February 2014.

We look forward to meeting with you at Conexpo. *Kilt optional!

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20

CEA CONEXPO PREVIEW CATERPILLAR

TEREX FINLAY

Stands 10915 / 1015

Conexpo is Caterpillar’s home show, so expect the US giant to have a host of new and improved machinery on display.

Among the latest machines on show will be the 725C and 730C articulated haulers from Cat’s plant in Peterlee, County Durham. The machines boast a raft of improvements designed to increase productivity and cut operating cost for the customer.

Also on show will be four revised M Series wheeled loaders, from the 966M to the all-new 982M. Boasting Stage IV compliant engine technology the machines are designed to work in aggregate quarry applications.

Both the 966M and the 972M will also be available in XE specification, with

Stand 1047

Terex Finlay will be showing it 684 threedeck inclined screen and the J-1170 jaw crusher at the exhibition. The 684 is an easily transportable machine with rapid set-up and strip-down times. With the large screens the machine offers high capacity and up to four conveyors for discharge and stockpiling.

Terex Finlay’s J-1170 primary mobile crusher designed for blasted rock and ore materials. The jaw chamber is available with optional hydraulic release particularly for demolition use.

the innovative continuously variable transmission system first seen on the 966K XE. This driveline, which combines a mechanical transmission with a hydrostatic variator, is said to offer up to 25% fuel savings compared to a traditional torque converter powershift box.

Better results are now

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Want to know more? Contact us or your local dealer and we’ll provide you with more information.

21

CASE

Stand 10403

Conexpo will be the first chance for many US customers to see the M Series dozer line-up from Case Construction Equipment.

There are five models in the range, from

POWERSCREEN

the 92hp 750N to the 214hp 2050M. All are equipped with Tier 4 Interim compliant diesel engines featuring selective catalytic reduction (SCR).

The M Series dozers use a hydrostatic drive system with a load management

The machines have a cab forward design with full height door glazing for maximum visibility. Noise has been significantly reduced to just 75dB(A) in the cab.

HYUNDAI

Stand 1047

Terex company Powerscreen will offer customers a first look at the Premiertrak 300 jaw crusher, the Trakpactor 320SR impact crusher and the Warrier 2100 screen. The Premiertrak 300 has a new hydrostatic drive system allowing it to reverse and unblock or to run continuously in reverse for asphalt applications. The machine uses the Vibrating Grizzly Feeder with a 50mm bofor bar on the top deck and 30mm mesh on the bottom.

system that automatically reduces track speed as the load on the blade increases.

section so that customers can convert to a standard 320 machine for different applications.

The Warrier 2100 screen uses Powerscreen’s Triple Shaft technology, first seen on the 2400. The machine is designed to handle mixed demolition waste including soils, concrete, wood and asphalt and offers a variety of configurations.

The Trakpactor 320SR is a mid-size horizontal impact crusher offering a potential output of up to 320 tonnes/hour.

With a recirculating conveyor the machine also features a quick-detach post-screen

Stand 10052

Hyundai Construction Equipment will have several new models at Conexpo, many of which will be powered by Tier 4 engine solutions. “Conexpo is a one of a kind experience and no matter how many times we exhibit there its always an exciting time for the company” said Sam Yoon, president of Hyundai Construction Equipment Americas.

“With over 130,000 attendees expected in March, we are looking forward to another successful show, connecting with our dealers and customers.”

within reach

Build a better future HHIE UK | Unit 15 Bilton Industrial Estate | Lovelace Road | RG128YT Berkshire | +44 (0)1344 484 034 | info.uk@hyundai.eu | www.hyundai.eu Hyundai Heavy Industries Europe | Vossendaal 11 | 2440 Geel | Belgium | +32 (0)14 56 22 00 | info@hyundai.eu | www.hyundai.eu

22

C O N E X P O C E A PAV I L I O N AMBER VALLEY LLP STAND 40422

Amber Valley Developments is a specialist manufacturer of auto electrical safety equipment. The range of products has been developed to suit the exact requirements of many original equipment manufacturing and distribution customers throughout the world.

Amber Valley designs and manufactures bespoke auto electrical equipment and is therefore able to assist customers with the supply of specific and unusual products. The latest patented product Alarmalight (the ultimate alarm and light warning system) will be available to view at Conexpo 2014.

www.amber-valley.co.uk

ASHTREE VISION & SAFETY LTD STAND 40517 Ashtree Vision and Safety designs and manufactures mirrors and mirror arms for industrial and commercial vehicles of all types.

From a newly-enlarged factory in Bradford, UK, Ashtree supplies high quality products to many of the world’s leading manufacturers of construction equipment, including Oshkosh, JCB, Komatsu and Liebherr. Ashtree’s sustained success in developing and increasing worldwide sales was rewarded in 2012 with a Queen’s Award for Enterprise in the International Trade category.

www.avsuk.co

ATP INDUSTRIES GROUP LTD STAND 40424 ATP is Europe’s largest independent remanufacturer of transmissions, torque converters and machine electronics. The company also has factories in Guangzhou (China), Ann Arbor, Mi (USA). In June 2013 ATP was awarded the prestigious, global, Remanufacturer of the Year Award.

www.atp-group.com

BRITAX PMG STAND 40625

Britax PMG designs and manufactures a comprehensive range of amber warning beacons, which are used extensively by operators of all types of construction machines, agricultural, recovery and commercial vehicles worldwide.The extensive Britax beacon range has been extended by the addition of over 20, competitively priced LED options. Britax LED beacons feature high

intensity light modules, which provide ultra low current consumption (0.25amps per module) and multiple voltages (10-49V).

The new LED beacon range will fully interchange with all current Britax styles, without the need for drilling additional mounting holes. The range includes a wide selection of LED beacons, light bars and directional warning modules approved to ECE Regulation 65.

The range of Britax light bars has been extended with LED options and Europe’s favourite mini-bar, the A420 Series, now features a two module option, providing all the LED benefits, included in the beacon range. A range of LED bar lengths are available, along with low profile options.

www.britax-pmg.com

CONSTRUCTION EQUIPMENT EVENTS LTD STAND 40424

The UK Construction Equipment exhibition Plantworx first took place in May 2013 and will be held every two years going forwards. Leading OEMs, attachments, component suppliers and service providers exhibiting include JCB, Finning, Terex, Amman, Volvo, Bomag, Case, Doosan, Hyundai, Kubota, Manitou, Merlo, Liebherr, Wacker Neuson, and many others.

www.plantworx.co.uk

DATATAG ID LTD STAND 40424

BSP INTERNATIONAL FOUNDATION LTD STAND 40522

BSP International Foundations is one of the world’s foremost manufacturers of pile driving and rapid dynamic compaction equipment. Established in 1906, BSP has used the experience and innovation gained to produce high performance products which provide the construction industry with economic benefits. Hydraulic hammer product ranges with rams from 2.5-40t. Rapid Impact Compaction (RIC) product ranges with rams from 5-12t.

CESAR, the world’s leading machine security and registration scheme powered by Datatag ID, acts as a powerful deterrent against theft and an invaluable aid in recovery. CESAR is the first sensible step to protect assets. CESAR works by giving each machine a unique and permanent identity using state of the art security marking technology including tamper evident plates, RFID tags, DNA and Datadots. CESAR registered machines are four times less likely to be stolen and six times more likely to be recovered than unregistered machines.

www.bsp-if.com

www.cesarscheme.org

CDE GLOBAL LTD

FRICTION MARKETING CO LTD

PLATINUM LOT STAND 9009

Over the last 21 years CDE Global has grown to be recognized as the leading supplier of washing and classification equipment for quarries and mines on the global market. The company’s areas of expertise include sand and aggregate washing, construction and demolition waste recycling, mining and specialist industrial sands as well as tailings management. CDE is currently delivering three washing projects per week across Europe, Russia, Middle East, Africa, Australia, North America and Latin America.

STAND 40526

Friction Marketing Company is a specialist manufacturer of original equipment friction discs and manufactures a wide range of clutch, brake, and transmission plates. FMC supplies friction plates with various friction materials like sinter, rubber, paper, cork or carbon materials.

Typical applications for our friction plates are in agriculture, bus, excavator, forklift, marine, mining and motorsport.

www.frictionmarketing.co.uk

www.cdeglobal.com

GATE 7 LTD

CEA

Gate 7 is a dynamic and innovative company specialising in the supply of vehicle branding, safety, warning and instructional decals to the construction equipment, agricultural and industrial markets. It has developed longterm business partnerships with major clients in North America, Europe, and Asia. Across manufacturing plants in the UK and USA Gate

STAND 40424 The UK Trade Association representing manufacturers of construction equipment, attachments, components and service providers.

www.coneq.org.uk WWW.CONEQ.ORG.UK

STAND 40524

23

A L L S TA N D S A R E L O C AT E D I N C E N T R A L H A L L 2 U N L E S S OT H E RW I S E S TAT E D 7 provides screen print and digital solutions to meet a wide range of requirements including rapid prototyping, design engineering, project management and research and development.

www.gate7.co.uk

GKD TECHNIK LTD STAND 40424

GKD will be showing its SiteGuard proximity warning system for the first time in the USA. SiteGuard protects workers by warning the operator or driver of construction machinery when a pedestrian or vehicle enters the danger zone. With data-logging and Internet access to data, SiteGuard provides safety management statistics to the contractor too. The GKD market leading range of road/rail and civil safety and envelope control systems will also be on show.

www.gkdtechnik.com

INTERPART UK LTD STAND 40518

Interpart supplies replacement alternative parts for JCB machines. Parts are sourced from high quality manufactures that produce parts, equal to or exceeding the OEM specifications. Interpart prides itself on the quality of the products it sells and its commitment to continuous quality improvement is demonstrated by ISO 9001:2008 accreditation. The company distributes across a worldwide market direct to a dealer network that stocks our parts and sells to the end user market.

www.interpart.com

JET MATERIALS LTD STAND 40424

Jet Materials is a UK based company with over 30 years technical and sales knowledge providing a range of services and products to civil engineering and education. Jet Materials main focus is materials testing equipment, covering soils, concrete, asphalt, bitumen, cement, steel, rock, aggregates and general laboratory equipment. All equipment is compliant to EN, BS, ASTM or AASHTO standards. Jet is UK agent/ distributor for quality equipment manufacturers from Italy, Germany, USA and Australia. The company has supplied major materials laboratory projects into Africa, Middle East, Asia and Europe.

Jet also provides the supply of educational engineering equipment for colleges and

universities, designs site and permanent laboratories for construction testing, supplies bespoke temporary laboratory buildings in steel or traditional materials, complete laboratory test sets with product codes and accessories to assist with specification and tendering, on-site commissioning and installation of laboratories by experienced engineers anywhere in the world.

www.jetmaterials.com

NUROCK MIXERS LTD STAND 40424

Nurock Mixers has been involved in the design, manufacture and operation of batch on-site and volumetric concrete mixers since 1987.Through experience and innovation the company has developed the most comprehensive volumetric concrete mixer on the market today and provides complete product and customer support.

Having progressively designed and manufactured mixers, Nurock has great understanding of customer needs in all areas of the industry. The mixers have been developed through actual experience and have produced many thousands of cubic metres of concrete.

Nurock mixers are in use in many countries around the world in the concrete, construction, civil engineering, rail, defence and oil industries.

www.nurock.co.uk

NYLACAST LTD STAND 40527

Nylacast’s engineering ENGINEERING PLASTIC SOLUTIONS polymers offer many advantages for the arduous environments faced within the construction industry. These include exceptional resistance to wear and abrasion, high impact strength, corrosion and chemical resistance, self-lubricating, eliminating routine and costly maintenance, lightweight (typically one seventh the weight of steel).

Furthermore enhanced performance is available by building on the well-known brands of Nylube, Oilon and Aquanyl, bringing together the experience of Nylacast engineers and chemists.

Nylacast is able to tailor its materials to suit customers projects.

www.nylacast.com

OFF GRID ENERGY STAND 40424

Grid-to-Go is a hybrid power solution that delivers silent, clean energy. Grid-to-Go reduces reliance ISSUE 05 - FEBRUARY 2014

on conventional fossil fuel power generators by up to 80% with corresponding reductions in fuel consumption and CO2 emissions. No noise, no exhaust, just clean, silent power. Ideal for events where noise and exhaust emissions are undesirable, construction sites where fuel economy and reducing CO2 emissions are important.

www.offgrid-energy.co.uk

OFF-HIGHWAY RESEARCH LTD STAND 40519

Off-Highway Research provides research reports and databases on international construction equipment markets. These cover the key markets of Western Europe, China and India, and are available to clients on a subscription basis, while a private client capability is offered through a customised facility. In addition, a wide range of multi-client Studies are available on such markets as Indonesia, Thailand, Saudi Arabia, Korea, Japan and Turkey.

www.offhighway.co.uk

RESALE WEEKLY GRAND LOBBY STAND 20106

Resaleweekly.com is an online marketplace that connects buyers and sellers in construction and allied machinery industries. The commitment to innovation with solutions like Resale iPhone Application, Resale mobile site, and the proven specialist information solution of Resale Weekly, enables customers to search further, dig deeper, work smarter, innovate faster for making reliable decisions. Resale Weekly is a world-class publisher and information provider enabling construction and allied machinery professionals to achieve excellence.

www.resaleweekly.com

RICARDO UK LTD STAND 40428

Ricardo is a global, UK FTSElisted engineering, niche manufacturing and strategy consultancy that successfully demonstrates a century of delivering value.

Customers are served through a network that employs over 2,300 consultant engineers across three continents and in 11 countries.

Ricardo works in partnership with the world’s transportation manufacturers and their supply chains, energy and defence organisations, financial institutions and governments.

www.ricardo.com

24

H A R D DATA

US MARKET CONTINUES TO R E C O V E R INDUSTRY MARKET ANALYST FRANK MANFREDI, OF MANFREDI & ASSOCIATES, LOOKS FORWARD TO GROWTH IN THE NORTH AMERICAN MARKET There seems little doubt that 2013 remained a tough year for construction machinery manufacturers. Overall second quarter revenues were down approximately 5% and profits were down more than 12%.

Inventories seem to be the problem – as in too much inventory in the hands of distributors. Distributors are by nature conservative. Families that have a substantial portion of their family wealth tied up in the business usually own them.

They have been reducing their inventories throughout 2013.

Indications from companies like Caterpillar were that they expected their distributors to continue to reduce inventories to the end of 2013. They will instead rely on the manufacturers they represent to stock the machines they need when they need them, essentially removing that inventory burden from their balance sheets.

During 2012 distributors also loaded up on new equipment in their rental fleets.

In 2013 they were not buying as many machines. I understand manufacturer sales to dealer-owned rental yards were down 5% to 15% depending on the product category. However, I have also been told that sales to non-rental customers were up as much as 10%. The expectation was that the 2013 market would be up a net 5% or so.

One manufacturer told me that if 2013 ended flat compared with 2012 he would consider it a good year. So from that point of view we could consider 2013 a good year.

Let’s be optimistic and assume that the 2013 market ended up about 5%. That will

One manufacturer told me that if 2013 ended flat compared with 2012 he would consider it a good year. So from that point of view we could consider 2013 a good year. help get 2014 off to a good start. I think that the overall market will be up slightly less than 7%. In units sales terms the market should approach the same level as in 2008, but it has taken five years for the market to get back to “normal.”

I expect the 2014 machinery market to benefit from gains in US housing starts and an improved non-residential construction market. Most housing experts forecast that housing starts will increase and go over the one million unit threshold, a level we have not seen since 2007. Some economists are estimating that starts will go as high as 1.2 million units, which I think is too optimistic.

I believe 2014 starts will come in at about 1.1 million units, up from 2013 at approximately 900,000 units, an impressive gain of 22%. However, the really impressive part of the housing start recovery is that the market will rotate from rapid growth of multifamily units to more rapid growth of single family homes.

Single family housing starts drive much more equipment demand than the multifamily housing market, because they attract a lot of collateral construction for sewer and water lines, electric utilities, schools, shopping centres and hospitals and are very important to the construction materials market as well.

Non-residential construction will also be a demand driver in 2014, with an expected gain of about 12% compared with 2013.

The gains will come as people who own businesses and companies begin to feel more confident in the economy and expand their facilities after a long period of little or no investment.

Public construction, once a huge demand driver for equipment sales, is not expected to help much in 2014. Federally funded road construction is expected to continue at the same level as in the past. A new road bill was passed and signed that extended Federal spending at the same level as in the previous six years.

Energy related equipment sales are expected to remain at a high level.

Energy related equipment sales are expected to remain at a high level. Mining oil shale (fracking) will continue to benefit the same regions of the country as in the past couple of years and fracking is very equipment intensive. continued on page 26

WWW.CONEQ.ORG.UK

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26 continued from page 24

In 2013 mineral mining did not have a good year. Coal mining especially has been hard hit due to an abundance of natural gas that has induced electric utilities to switch from coal, and from an anti-coal attitude by the current Washington administration, especially the Environmental Protection Agency that has practically launched a war on coal.

Iron production has been adversely impacted by drops in prices that have made many mines in the U.S. unprofitable to operate due to declining demand, particularly declines in demand from China.

Copper prices have held steady, albeit at a lower level than a few years ago. It is one of the few bright spots in the mining picture.

I don’t believe there will be much change in the mining outlook during 2014. Most of the mining equipment manufacturers have scaled back production and reduced their shareholder expectations about revenue growth and profits.

My forecast calls for a gain in retail sales of construction machinery of slightly less than 7%. I believe we will see the largest sales gains for articulated haulers (up 15.4%), cranes (up 12%), skid steer loaders and rubber tracked loaders (up 9.7% and 9.9% respectively) and hydraulic excavator sales up 7.9%.

One last observation: the rental companies had a phenomenal year in 2013. Topping the list of reasons 2013 was so good for them was the economic uncertainty that caused equipment users to rent equipment rather than buy it.

All of these reasons have contributed to more and more new equipment going into the rental fleets of both the national rental companies and authorized distributors for the equipment manufacturers who have amassed huge rental fleets.

Overall, publicly traded rental companies reported top line revenue gains of slightly less than 20% and profits that almost doubled from the year earlier. It seems that the closer a company is to the equipment user, the better the chance for profits.

I also believe users’ concern and confusion about the new Tier 4 Interim products that were introduced to the market starting in early 2012 contributed to the growth.

Many of the national rental companies stocked up on as many Tier 3 products as they could find, including used machines, to put off the inevitable day when they would have to buy Tier 4 units for their fleets.

Most of the mining equipment manufacturers have scaled back production and reduced their shareholder expectations about revenue growth and profits.

Estimated U.S. Construction Machinery Market (retail sales of units) Estimated

% Change

Forecast

% Change

Product

2010

2011

2012

2013

Asphalt Pavers

1,051

1,167

1,285

1,275

-0.8%

1,340

5.1%

Compactors

3,945

3,900

4,115

4,315

4.9%

4,530

5.0%

632

1,255

1,660

1,830

10.2%

2,050

12.0%

Crawler Tractors

4,400

5,010

5,440

6,090

11.9%

6,500

6.7%

Hydraulic Excavators

21,285

32,120

38,175

40,305

5.6%

43,500

7.9%

Loader Backhoes

12,050

14,435

15,025

16,000

6.5%

15,200

-5.0%

Motor Graders

1,800

2,100

2,495

2,695

8.0%

2,800

3.9%

Haulers – Rigid

775

780

910

895

-1.6%

850

-5.0%

Haulers – Articulated

850

1,800

2,000

1,300

-35.0%

1,500

15.4%

RT Forklifts

3,748

9,400

14,110

15,090

6.9%

15,800

4.7%

Rubber Tracked Loaders

11,300

19,000

21,000

23,200

10.5%

25,500

9.9%

Skid-Steer Loaders

30,030

35,006

40,019

41,027

2.5%

45,000

9.7%

Wheel Loaders

10,880

16,265

18,500

20,075

8.5%

21,500

7.1%

Total

102,746

142,238

164,734

174,097

5.7%

186070

6.9%

Cranes

2013 v 2012 2014 v 2013 2014 v 2013

Source: Manfredi & Associates WWW.CONEQ.ORG.UK

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28

OVER THE HORIZON

THE U.S. MARKET Market analyst and CEA member company Off-Highway Research is expecting the North American market to rise from around US $23.2bn in 2013, to $27.8bn by 2017.

However the mix of machines is constantly changing to meet the demand of rental companies and contractors, while it looks like the North American market will experience growth this year, manufacturers will want to know which machine types are likely to be the big sellers.

Globally the crawler excavator remains the biggest single machinery market sector, accounting for 38.8% of sales in 2012.This is followed by the wheeled loader on 24.3%.

Things are a little different in the North American market though, where in 2012 the skid steer loader was the big player, scooping 24% of all machine sales, followed by crawler excavators on 15%, minis on 15% and wheeled loaders on 12%.

Turning those stats into actual sales numbers, according to Off-Highway Research the US market took 35,000 skid steers in 2012, a total that dropped slightly to 32,500 in 2013 but one that is expected to bounce back to more than 36,000 in 2014. The North American market is even expected to account for an incredible 40,000 skid steer sales a year by 2015.

There were 23,200 crawler excavators and 22,625 mini excavators sold in 2012, both of which dropped to just over 21,000 last year.

Skid steers remain the most popular machines sold in the North American market Again these sectors are expected to recover quickly, though mini excavators are believed to be about to overtake full size machines, claiming around 23,500 in 2014 and 25,900 in 2015, against the crawler excavator totals of 23,000 and 25,300 respectively.

Off-Highway Research believes that by 2017 skid steers will account for 25% of the North American market, with crawler excavators and mini excavators claiming 15% of sales each. Wheeled loaders will grow slightly to 13% of sales, or around 21,000 units.

Of the remaining machine types, 2014 should see sales of around 2,800 articulated haulers and 700 rigid dump trucks in the North American markets. Backhoe loader sales are also set to recover from a low of 8,700 in 2009 to a new high of 16,000 machines this year.That figure will continue to climb too, according to Off Highway

Research, to as many as 20,000 backhoes by 2016.

Dozer sales also seem to be on the increase, rising from 9,575 in 2012 to a forecast 9,600 this year and as many as 10,300 in 2015.The US market still has little interest in wheeled excavators however, with sales of just 625 last expected to rise to around 675 in 2014.

Compare that with annual sales of around 3,800 motorgraders, a machine that barely makes any impact in Europe, though many of these will be used for snow clearing and forestry work as much as for construction.

Off-Highway Research is forecasting a rising overall market in North America from now through until 2016, with a slight drop again in 2017.That said, the construction equipment market remains incredibly difficult to call.

Few pundits would be brave enough to make any predictions beyond that.

North America: Structure of Sales, by Product, 2007-2017* (Percentage of Total) 2007

Telescopic Handlers 10%

2012

Others 8% Crawler Dozers 8%

Wheeled Loaders 10%

2017*

Crawler Dozers 6%

Others 8% Telescopic Handlers 9%

Mini Excavators 13%

Telescopic Handlers 9%

Backhoe Loaders 10%

Wheeled Loaders 12% Crawler Excavators 14%

Graphs courtesy of Off-Highway Research

Backhoe Loaders 11%

Skid-steer Loaders 26%

*Forecast Ski-Steer Loaders 25%

Others 13%

Ski-Steer Loaders 24%

Mini Excavators 15%

Crawler Excavators 15%

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Backhoe Loaders 11%

Wheeled Loaders 13%

Mini Excavators 15%

Crawler Excavators 15%

* Forecast

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TECHNIC AL BRIEF AS THE INDUSTRY DIGESTS STAGE IV EMISSIONS REGULATIONS, MANUFACTURERS ARE ALREADY LOOKING TO STAGE V STANDARDS. CEA TECHNICAL CONSULTANT MALCOLM KENT DISCUSSES IMPLEMENTATION FLEXIBILITY The first two are subject to controls, in that an application has to be made to an approval authority in a member state and conform to certain provisions, but there is no control mechanism on sell-off. Also, and most critically, any engines actually placed on the EU market before the new stage starts can be used at any point in time. This means that an OEM could buy and stockpile engines before the end of a stage, to be used as they liked during the next stage.

Negotiations on another stage of engine emissions reduction go on apace. Stage IV doesn’t come into effect until next year but discussions on Stage V are advancing and the European Commission plans to have a finished proposal ready in the first half of 2014, so that it can be debated by the new European Parliament after the 2014 elections.

Depending on the progress of negotiations from then, the next stage might kick in some time after 2018. One of the topics up for debate at the moment is what provisions there might be to help manufacturers in the transition from one stage to the next. There have been such provisions in place up to now, but they have caused some problems, so the European Commission is taking a ‘blank sheet’ approach to the question.

There are several elements to the current arrangements which manufacturers can use:

• End-of-series exemption. This allows an engine maker, or an OEM, 12 months’ grace for engines in stock that have not been placed on the market before the introduction date of the new stage, provided that they have been physically within the EU. • Flexibility. This gives an OEM an allowance of a number of engines complying with the previous stage, which can be produced and sold during the new stage. The allowance is either a percentage of sales volume or a fixed quantity.

• Sell-off. This allows engine makers to place previous stage engines that were built before the start of the new stage on the market up to two years after the start of the new stage. It should be borne in mind here that the law on engine emissions applies to engines, not machines. Remember that it is the engine that can be placed on the market that late. There is no limit on when the machine containing the engine can be placed on the market.

As all the stages are written in laws and cannot be sprung on manufacturers at short notice, the question is sometimes put as to why companies cannot just meet the new requirements at the specified time. After all, the requirements for on-highway engine emissions do not have any transitional arrangements, so why do off-highway manufacturers need them?

The first key reason is production volumes.

On-highway companies measure sales in telephone numbers, whereas niche suppliers in the off-highway sector might measure sales in tens. This means that their research and development resources are much smaller and investment recovery through sales is much more difficult.

The second big reason is product range diversity. Off-highway companies often have a wide range of machinery, even within one engine power range, meaning that they cannot all be updated at the same time.

This is particularly the case with smaller companies who often complain that as they do not have the purchasing clout of the big companies they are well down the pecking order when it comes to getting information and prototypes from engine makers for the new stages. OEMs cannot start their own work on a new engine installation until the engine maker has completed their own development work, and if that information does not come early enough manufacturers can find themselves out of time to comply before the new stage starts. continued on page 33

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33 continued from page 30

End-of-series exemptions are little used. In effect, all the help that manufacturers need is contained in the other two provisions.

This exemption is all but certain to disappear in the next incarnation of the emissions directive. However the other two provisions are much used to ease the burdens of having to change a lot of machinery at nearly the same time.

The flexibility scheme is seen as very useful by manufacturers and does not create many problems. As the engines under the scheme can be manufactured at any date there is no pressure for anyone to stockpile engines during the run-up to a new stage. Also, as the quantities are controlled there is no concern that the market is being flooded with old specification engines.

What is seen as much more of a problem is sell-off, and the general rule that engines placed on the market within their own Stage can be used by OEMs at any point in time. As there is no control on the volumes under these arrangements there is a perceived risk in some areas that manufacturers could use them to circumvent the requirements of a new stage by stockpiling engines. It also creates a logistical nightmare for engine producers who can be flooded with orders for engines that have to be built in the run-up to a new stage, followed by a slump in orders as soon as the new stage starts.

In addition to this, these schemes make it very hard to police any machinery seen in service. If a machine is inspected, how can anyone be sure that the engine

is legitimate when there are so many possible exemptions? The history of the machine and the engine would have to be examined before it could be established for sure that an engine was, or was not, non-compliant with EU law.

Various proposals have been made for what should replace the current transitional arrangements, and no-one seems to be working on the basis that they should not change. Several EU governments have had a go, including the UK, and industry groups are also working on ideas and trying to come to a consensus that can be tabled as an overall industry view. Some principles have been agreed within CECE, such as: • The scheme should create fair competition • It should prevent abnormal stockpiling • It should be simple • It should allow effective policing • It should continue to help manufacturers manage the transition However, whatever industry thinks there are always opposing views. Even the European Commission has asked the question: “If there is enough lead-time for Stage V in the legislation why do you need any transitional provisions at all?” And of course there are other stakeholders who want cleaner engines as early as possible, without any extensions to timescales. It will therefore be interesting to see what the proposed legislation looks like next year, and there could be some significant debates to be had after that.

There are two ways to get the number of machines allowed under the flexibility scheme - a fixed quantity or a percentage of annual sales.The OEM can choose which allowance to apply for.

For the fixed quantity scheme the numbers allowed vary by engine power band and by which Stage. For example an OEM with products with engines in the range 75-130kW going into Stage IV could apply for a fixed allowance of up to 100 machines to be built with Stage IIIB engines.

Alternatively, they could apply for a number equal to 20% of their average annual volume over the last five years in that power band to use Stage IIIB engines.

However, they could not ask for 20% of their average total sales numbers to be allocated to any product as they chose.

Note that flexibility only allows the engines to be one stage behind the current stage, meaning that when we are in Stage IV flex engines must be Stage IIIB and cannot still be Stage IIIA, even if an OEM has not used up their full allowance of Stage IIIA flex engines during the span of Stage IIIB.

PERKINS DELIVERS EMISSIONS MIGRATION SOLUTION Engine supplier Perkins has announced a migration solution for used equipment with EU Stage IIIB/US EPA Tier 4 Interim engine specifications. In the past there has been a concern over selling machinery equipped with these engines to countries that do not have ultra-low sulphur fuel, such as many developing nations. High sulphur fuels will damage low emissions equipment and can prevent these engines operating.

“We’ve undertaken extensive testing, analysis and field validation on our Stage IIIB/Tier 4 Interim engines,” says product manager, Dave Entwistle.

“Above 130kW (175 hp), our engine systems will not require any modification to operate in countries with higher sulphur fuel.

providing access to service training, parts stock, service tooling and product information, including detailed information on specific modification processes.

“On our Stage IIIB/Tier 4 Interim engines under 130kW (175 hp), we will offer authorised modification processes, including decertification, to remove the after treatment, enabling operation in countries with higher fuel sulphur. These modification processes will be made available to customers through their Perkins distributor in 2014.”

“Above 130kW (175 hp), our engine systems will not require any modification to operate in countries with higher sulphur fuel.”

Perkins is working with many of its distributors in lesser regulated countries,

ISSUE 05 - FEBRUARY 2014

David Entwistle, product manager, Perkins

34

COLDEST JOURNEY TEAM RETURN S A F E LY TO T H E U K

Working on the machines in temperatures as low as -60 degrees

The dozers were used to pull science and accommodation cabooses

Finning engineers Spencer Smirl and Richmond Dykes provided essential back-up for the two dozers

Two service engineers from UK Caterpillar dealer Finning have retuned safely from an incredible Antarctic winter journey, helping to raise $2m for charity. After 307 days in the Antarctic, guiding heavily converted Cat D6N dozers Rover and Seeker, Finning engineers Spencer Smirl and Richmond Dykes are back in the UK. As part of The Coldest Journey expedition conceived by Sir Ranulph Fiennes, Richmond and Spencer have helped to raise $2m for the Seeing is Believing charity.

Breaking records for the operation of dozers in the world’s harshest conditions, the engineers were faced with winds of up to 125km/h, delivering a wind chill as low as -88 degrees.

Throughout the 307 day trip, the two engineers maintained and operated the D6Ns, manoeuvring across crevasse fields and blue ice, whilst towing science and accommodation cabooses in an ice train.

Sir Ranulph Fiennes said: “They are the first team ever to camp throughout the Antarctic winter in the permanent darkness and temperatures as low as -60 degrees.”

Mr Smirl commented on the personal experience of the expedition: “This was an unbelievable journey, pitting man and machine against the most unpredictable and harsh conditions on the planet. When you are relying on a Cat D6N to travel in temperatures as low as -60 degrees, in the dark, you know your focus has to be on the performance of the machine.

“But in order to keep it performing well, you have to keep yourself in top condition, alert to every possible issue and ready at any moment to perform maintenance, change plans and support the rest of the team. Both Richmond and myself have had our engineering skills tested to the max and it has been such a rewarding and amazing experience.

“Even though the main goal of the expedition, to traverse the Antarctic in winter, had to be changed due to weather conditions, we have broken dozer records and been able to achieve our own key goals for the expedition. By getting the team and equipment back safe and sound, we have proven that the vision of Sir Ranulph Fiennes, to develop Antarctic ready Cat D6Ns that can operate in the Antarctic winter, has been achieved. Words can’t describe the whole experience, but it has certainly been life changing.”

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“When you are relying on a Cat D6N to travel in temperatures as low as -60 degrees, in the dark, you know your focus has to be on the performance of the machine.”

Spencer Smirl, In total the two dozers travelled 2,500 miles, carrying out various tasks throughout the journey. In this time Spencer and Richmond performed numerous essential machine maintenance tasks, protected by a specially designed canopy. With daily routines, checks and analysis combined with the removal of snow and ice, hundreds of man-hours were spent looking after the Cat D6N’s “We are both now in a unique position to share our experiences with others and in particular our fellow engineers across the whole Finning and Caterpillar businesses.

The knowledge that we have gained will certainly make a difference to the future of plant equipment development and most importantly the safety of the engineers that maintain it,” said Mr Smirl.

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I N T E R N AT I O N A L N E W S A N D C O M I N G U P A WARM WELCOME FOR CEA TRADE MISSION TO BRAZIL, SAYS JOANNA OLIVER MBE The CEA ran another successful trade mission to Brazil in December 2013, its fourth to this vibrant market.

Working with UKTI at the British Consulate in São Paulo and generously sponsored

by UKTI Construction Equipment and Mining Sector, the CEA was able to run a four centred mission, to explore the opportunities Brazil has to offer a UK manufacturer. Ten UK companies participated in the mission, including Brendon Powerwashers, BSP International Foundations, Edge Innovate, GKD Technik, IPPI Improved Piping UK, Niftylift, Perkins Engines, PF La Roche, Sandvik Construction and Webtec.

The mission programme was crammed full, taking in four cities in five days. It got off to a flying start with a visit to Arup to learn about upcoming infrastructure development projects. This was followed by a visit to the British Consulate for an introduction from the Consul General John Doddrell, and speakers on the Brazilian economy, the construction equipment market and general trade strategy and market entry. The CEA missioners joined together with a CBI mission for a joint networking reception at the Consul General’s Residence, attended by over 150 people from the local business community.

The day’s highlight came with a visit from SENAI (Service Nacional de Aprendizagem Industrial), a national institution of more than 800 colleges that provide technical training and opportunities to young students to start their working career.

The facilities at the institute in São Paulo, focussing on automotive engineering, were second to none and much envied by the UK delegates. Cars and engines were provided by international vehicle manufacturers like Ford and BMW and students trained to work on them in preparation for employment. Each student leaving SENAI is guaranteed a job, such is the reputation for training engineers. If only we had something of this calibre in the UK.

A visit to Brasilia saw meetings with the Brazilian Mining Association (IBRAM) which is active in all areas of mining, both surface and underground. The CEA and missioners were invited to participate in a mining conference to be held in November 2014 in Belem, focussing on the rapidly developing mining sector in the Amazon.

This visit was followed up by an informative briefing by Colonel Jonny, head of the Military Cooperation Work Board of Directors of the Brazilian Army, which purchases construction equipment for use in major civil infrastructure projects in remote and challenging regions of Brazil.

The Brasilia visit was completed with a meeting and tour of the airport by the commercial manager of Inframerica, which manages Brasilia and several other airports that are currently undergoing expansion and redevelopment.

A visit to Sorocaba included meetings with the president of major building contractors and developers Alavanca, the Sorocaba Secretary of Economic Development and the Technology Park of Sorocaba, together with some of the companies located there with an interest in construction.

WWW.CONEQ.ORG.UK

A flight to Belo Horizonte, the centre of the Brazilian mining sector, saw meetings with the Chamber of Commerce and Construction, the general manager of supply at AngloAmerican mining and leading regional contractor, Mendes Junior.

The mission concluded in São Paulo, after five exhausting but productive days.

Four missioners travelled on to Chile to participate in another trade mission. A full report of the 2013 Brazil mission together with visit presentations will appear shortly on the CEA web site.

Working with UKTI at the British Consulate in São Paulo and generously sponsored by UKTI Construction Equipment and Mining Sector, the CEA was able to run a four centred mission, to explore the opportunities Brazil has to offer a UK manufacturer.

37

CHILE MISSION

UKTI SUPPORT CONFIRMED FOR BC INDIA AND BAUMA CHINA 2014

The CEA’s Joanna Oliver MBE accompanied by GKD Technik, BSP International Foundations and Brendon Powerwashers, JCB and KHL Publishing Group joined a trade mission organised by the British Embassy in Santiago, Chile, facilitated in the UK by Latin America specialists Canning House.

The CEA has been given support to run UK Pavilions at both Bauma China in Shanghai (November 25-28) and bC India in New Delhi (December 15-18).The UKTI Trade Show Access Programme (TAP) will offer exhibitor grants of £2,500 per eligible UK exhibitor.

The mission included a breakfast market briefing by the British Ambassador and UKTI trade team, a Construction is Great seminar at the British Embassy attended by local distributors, contractors and end users of equipment, meetings with the Construction Chamber, UK Chile Chamber of Commerce and the Chilean Foreign Investment Committee and a visit to Valparaiso to learn about the expansion plans at Chile’s major port.

The CEA will offer fully fitted stands under the UK banner at both these events in excellent locations within the exhibition centres. Neither market is easy to work in on your own and organising a stand, especially in India, can be incredibly time-consuming and frustrating. So why not let the CEA take the strain and get back to your main job of selling?

In just a few days everyone on the mission was extremely impressed with both Chile and what it had to offer to construction equipment manufacturers.

With a vibrant mining sector, including the world’s largest reserves of copper and major plans for infrastructure and building investment and development Chile is a market that the CEA will definitely be returning to.

Stand packages will be available soon, but to help us book the right size of stand space, please register your interest now for either or both of these exhibitions.

WHY NOT JOIN A CEA MISSION IN 2014?

CEA Missions are a great way to access new markets, scoping opportunities in infrastructure, construction and mining, finding local representation and sharing experiences with other missioners.

The CEA is planning missions to Mongolia, Brazil, Chile, Saudi Arabia and Burma (Myanmar) in 2014.

The CEA facilitates a full visit programme, organisation, domestic flights, hotel accommodation, in-market ground and air transportation, visa invitations, receptions and support from UKTI local representatives.

Travel grants through the Market Access Programme are usually available to eligible UK companies. Missioners can participate in all or some of the mission meetings, making time for their own appointments.

Some companies choose to designate a local representative to participate in the mission, reducing travel costs.

Joining a CEA/UKTI British Governmentsupported mission opens doors for your company in markets that are not usually available to individuals. Mission meetings typically include: • Government departments • Manufacturers • Distributors • Contractors and other users • Mines • Rental companies • Trade associations • Chambers of Commerce • Military and defence • Briefings at British Embassies. High Commissions, Consulates.

• Networking Receptions ISSUE 05 - FEBRUARY 2014

Bauma China (www.bauma-china.com) is a phenomenally successful event and sells out every time. Bauma China 2012 saw more than 180,000 visitors from 141 countries, up 16%, with 2,718 exhibitors from 38 countries, up 46%. bC India (www.bcindia.com) is one of the most important exhibitions in India and the Middle East, for the construction and extraction sectors and is growing rapidly.The show has now outgrown the exhibition centre in Mumbai and will move to a larger purpose built exhibition centre in the Greater Noida area of New Delhi. bC India 2013 saw more than 28,000 professional visitors and had 710 exhibitors from 33 countries (61% international).

Both Bauma China and bC India were fully booked and the UK Pavilions sold out early at the last shows, leaving the CEA with a waiting list we couldn’t fulfil.

To ensure you don’t miss out in 2014 register your interest now at gill.stirk@admin.co.uk.

38

YOUR SHOUT WORLD HIGHWAYS EDITOR MIKE WOOF TAKES A CLOSER LOOK AT CHINESE INFRASTRUCTURE SPENDING The recent bullish announcements from the organisers of the Bauma China exhibition make a strong case for the country’s infrastructure continuing growth.

The claims by the show organisers also make a strong argument for attending this major exhibition, being held in Shanghai towards the end of the year.

According to the information from the organisers, China invested some US$220.27 billion in civil engineering and infrastructure projects in the first six months of 2013. The National Bureau of Statistics of China claims that this represents a 21% increase over the country’s infrastructure spending for the same period in 2012.

Various provinces in China are investing heavily in developing road and rail links and a recent announcement from the authorities in Guangdong Province highlights a budget of some US$16.36bn on transport infrastructure in 2014 alone.

Of this eye-popping sum, $11.46bn will be used to build expressways and $2.27bn will be used to build local roads, while $1.31bn will go towards the construction of national and provincial highways.

During 2014, there are plans to start work on eight new expressways measuring a total of 938km in Guangdong Province and these include Huadu-Dongguan expressway and the Shunde section of Foshan-Jiangmen expressway.

The enormous scale of this spending on infrastructure is hard to conceive. China’s current five-year plan sets a target for up to 65,000km of new roads to be built by 2015. The current plan also sets a target of 30,000km of new railway tracks to be laid around the country due to an investment of $458.23bn. Investment in the

construction of new airports in the first six months of 2013 saw a 27% increase over 2012, hitting $8.67bn. Work on China’s impressive high speed rail system also continues, with the network now being expanded westwards. Ridership of the extremely efficient high speed rail link is good, although the payback time for this programme is as yet unclear.

In short, China’s infrastructure expansion has been rapid and has resulted in enormous sales figures both for local equipment manufacturers and firms from Europe, Japan, Korea and the US. However, while the Chinese market is now recovering from its rapid slowdown, the construction sector is still at a low level. The country’s own equipment manufacturers have been hard hit and though the large companies can weather this storm, some smaller firms will fall by the wayside.

Internationally, the developed markets of Europe and the US are still comparatively weak and the surplus of nearly new machines in China means that sales for manufacturers will remain low for a time.

Brazil, Russia and India are also uncertain at the moment. Some markets are good internationally, but there is extremely strong competition as firms fight for business.

Looking at the financial results for major publicly owned international firms such as Caterpillar, Komatsu and Volvo CE provides good insight as to the global equipment trade. The financial results of these firms show general trends across an array of equipment types, business segments and also geographic areas, though the overall message is one of caution.

Privately held firms do not have to publish their full financial results but even so, the information released by large companies with an international foothold such as JCB and Liebherr also provide good insight to sales.

WWW.CONEQ.ORG.UK

So coming back to whether bauma China’s organisers are correct in saying this is a boom time for the country’s infrastructure development? Well, perhaps not quite.

That said, China will remain an important future market for the construction sector.

The pace of development in China’s major cities has to be seen to be believed, while the products from the country’s larger manufacturers are increasingly competitive on an international scale.

Any European equipment manufacturer dismissing the continuing importance of the Chinese market is making a shortsighted mistake.

Various provinces in China are investing heavily in developing road and rail links and a recent announcement from the authorities in Guangdong Province highlights a budget of some US$16.36bn on transport infrastructure in 2014 alone.

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