PMV's Big in the Middle East

PMV looks at the brands in the construction equipment industry

ANALYSIS, PMV

PMV Middle East looks at the brands in the construction equipment industry that have a large market penetration in the Middle East

As many successful companies know, in order to succeed in a local market it is necessary to tailor your approach to the local conditions, including the expectations of buyers.

For equipment manufacturers exporting to the Middle East, this can range from fine-tuning their machines for the operating conditions, whether adding air filters or reducing complicated electronics, to the judicious selection of a local partner who is as committed to the industry as they themselves are.

Following the downturn in 2009, there have been a number of changes in the PMV sector in the GCC. Some distributors have expanded brand offerings, others have concentrated on their core products, while a number have dropped out of the market completely.

But with a long pipeline of projects to be completed across the region, there is clear long-term demand for construction equipment.

Whether it’s by quality, price, or aftermarket service, the top PMV brands in the Middle East have managed to distinguish themselves by the length of service to the market, and of course by the numbers of their equipment which can be seen on busy work sites.

Caterpillar
Country: USA

The brand that every competitor wants to follow in terms of market share and machine quality, Caterpillar is an indisputed heavy weight in the Middle East machinery markets.

A CAT machine certainly isn’t the cheapest, but customers believe that they’re getting what they paid for - a reliable machine, with potentially the lowest operating costs and highest returns on the market.

Customers benefit from massive R&D budgets, lengthy and exacting field testing of machines before they’re released, as well as established training programmes for operators.

Additionally, Caterpillar’s distributors in the GCC have a long history with the company, meaning top notch service and support. And a recently opened massive spare parts warehouse in Dubai underlined the company’s committment to supporting its machines in operation.

Led by CEO and Chairman Doug Oberhelman, the company saw its revenue grow to a record $65 billion in 2012.

Hyundai Heavy Industries
Country: Korea

Hyundai HI benefits in the Middle East from a strong dealer network, as well as machines that offer good quality at attractive pricepoints. In excavators, Hyundai HI is particularly strong, and its 9S series of crawler excavators is a particular favourite with customers, and has a corresponding strong market share.

Its updated wheel loader line is also popular, and at Big 5 last year it introduced two new backhoe loaders. The brand benefits from fast delivery times from its factories in Korea, which can be an important selling point.

Hyundai’s first dealers were appointed in Bahrain and Saudi Arabia in 1990, and its Middle East sales and service network was quickly completed. Its main spare parts distribution centre for Middle East and Africa is in Dubai.

JCB
Country: United Kingdom

Best known for their backhoe loaders, JCB’s machines have a well-earned reputation for toughness in the Middle East, and are a favourite with contractors, as well as smaller operators due to their versatility.

Their backhoes, telescopic handlers, and excavators are well-represented in the region, and a battered JCB machine can be found on almost any job site. The company builds its machines in India for export into the Middle East. In October, JCB announced it would spend $100m building a fourth production facility, on a 28-hectare site in Jaipur, Rajasthan.

Case Construction
Country: US

Part of the Fiat Industrial group, Case Construction started 2013 with a bang, holding a series of customer events across the GCC, including with Nass Group in Bahrain and IHE in Oman. Case’s Saudi Arabian dealer Roots Group also opened a new branch office in Riyadh.

As a company, Case is focused on using engineering developments to drive the value of its products and deliver increased performance to end users.

Design innovations include the design of the cooling system on its f-series wheel loaders, with the engine placed at the back acting as a counterweight; and prominent service points on its excavators and other machines to encourage regular maintenance. The machines are fitted with engines built by Fiat Powertrain Technologies (FPT).

Liebherr
Country: Germany

Liebherr has a long history in the Gulf, and its presence includes a JV in Saudia Arabia and a fully-owned subsidary based in Jebel Ali, Dubai. With a reputation for delivering quality German engineering, its range includes the massive 1200-tonne all-terrain crane LTM 11200-9.1, one of the largest ATCs in the world, of which there are only a handful in the Middle East.

All-terrain cranes are a strong seller for Liebherr in the region, with its cranes are often behind some of the biggest lifts; and its range of telescopic crawler cranes have also proved their worth on job sites in oil and gas.

Its litronic excavators have a reputation for reliability, and are a popular choice in KSA for mining and quarry applications, while the diversity of Liebherr’s offering extends to material handling and concrete equipment.

Other Liebherr Group activities in the region include a contract to build a giant folding sunshade within the courtyard of Makkah’s Grand Mosque, which will cover 2,400m² when fully opened.

Komatsu
Country: Japan

The second largest construction equipment manufacturer in the world, Komatsu has a long history in the region, and a reputation for a quality product. Its excavators are a particular favourite, including the PC 800 SE, this one seenhere at Stevin Rock in Ras Al Khaimah.

Komatsu’s distributors include Galadari Brothers in the UAE, while recently it changed its Saudi distributor to the well-known Abdul Latif Jameel Co. Ltd (ALJ).

Doosan
Country: Korea

Doosan’s range of earthmoving equipment is popular with contractors, and especially in Saudi Arabia it enjoys a strong market share in excavators and wheel loaders. A key distributor is Saudi Diesel, headquartered in Al Khobar, one of the largest Doosan dealers in the world.

Doosan is currently releasing its new DX-LCA series of excavators for the Middle East and Africa, replacing the old Solaris range, while its wheel loaders are also being updated.

For Doosan, this means improved machine performance, including extreme temperature field testing in Shaybah in Rub’ al Khail.

XGMA
Country: China

One of the largest construction equipment manufacturers in China, XGMA’s products have found favour in the GCC, especially in Saudi Arabia where the company sold more than 400 wheel loaders last year.

Key performing models include the 3 tonne capacity XG935H wheel loader, the 5 tonne capacity XG956H, and the larger 6 tonne capacity XG962H. Further products in its line up include motor graders, skid steers, compactors, paver and drilling rigs.

XGMA has shown a number of natural gas powered machines, including wheel loaders at last year’s Bauma China in Shanghai, and it is an option that should prove increasingly popular for projects in remote locations, since LNG is easier to transport than diesel.

Hitachi CM
Country: Japan

Hitachi Construction Machinery Middle East Corporation (HMEC) is Hitachi CM’s fully owned subsidary, and supports machinery applications across the MENA region.

Their range of product offerings include excavators, wheel loaders and rigid dump trucks. Its excavator range extends to the heaviest weight classes for mining and quarry applications, including a 83.6 tonne excavator for quarrying, and the massive EX8000-6, with a 811 tonne operating weight and a 40m³ heaped capacity loading shovel.

Cranes and foundation machines are supplied by Hitachi Sumitomo, a Hitachi group company.
Dealers in the region include Al Fairuz Trading & Contracting Co LLC, in Oman, which was recently awarded in recognition of 35 years of service. Boodai Trading Company is Hitachi’s dealer in Kuwait.

Part of the much larger Hitachi Group, the brand benefits from its association with the engineering and plant wings of the group.

Sany Heavy Industries
Country: China

Sany Heavy Industries is the largest manufacturer of construction equipment in China, and plans to grow signficantly its export offerings in the long term. The Middle East is a key overseas region for the Sany, which recently opened a business office in Jeddah.

Sany’s approach is to concentrate on marketing individual product lines in countries where it believes these will be successful. Examples include road equipment and excavators, as well as mobile cranes through its KSA dealer Al Areedh, and its UAE dealer UME.

Last year in Qatar, Sany signed a strategic cooperation agreement with CHEC, responsible for phase one works at the new Doha port. Sany equipment will be used for the 4.5 year project.

Volvo CE
Country: Sweden

Volvo Construction Equipment is in the top line for quality, with machines that can avoid overheating in some of the most extreme conditions. The brand is also backed by solid dealer support, with FAMCO having exclusive distribution in the UAE and the all-important Saudi Arabian market, where it is expanding its support network. Other GCC dealers include GENSERV in Oman and ARACO in Qatar.

It has added solidly to its business, releasing 110 new models in 2011-2012.

One area to watch is its presence in pipe laying, a segment traditionally dominated by tracked sidebooms.

Volvo CE’s excavator-based pipe layers take a completely different approach from sidebooms, and are finding favour with contractors worldwide since they are more versatile on the jobs site. Pipe laying is big business in the Middle East, and already Volvo CE is making in-roads into this important market sector.

Wirtgen Group
Country: Germany

With four major brands - Hamm, Vögele, Wirtgen and Kleemann - Wirtgen Group’s road construction equipment can be seen on many of the major projects in the Middle East. One example was the building of the F1 track in Abu Dhabi.

The road construction range is distributed in Saudi Arabia by Bakheet, and in the UAE by GENAVCO.

Road construction is currently big business in both countries, and from an equipment standpoint, reliability is all-important, especially when the costs of asphalt production are factored into a paver breakdown.

In addition, the Kleemann range of crushers are a popular option among quarriers, including larger stationary crushers. In the UAE and in Saudi Arabia, Kleemann are sold and installed by Quarry & Mining, well known as specialists in the quarrying industry.

In KSA high-quality crushers are in demand as quarries look to replace low quality equipment which cannot produce the high levels of material required by the market.

Tadano
Country: Japan

Even Tadano’s competitors are willing to acknowledge that it is the king of the small rough terrain crane market, and its RTs and ATCs are sought after for their quality and safety.
In the Middle East, up to 70% of Tadano cranes are purchased for use in the oil and gas sector, and popular model classes are 50, 60 and 80 tonnes for rough terrains, and 90-110 tonnes for all terrain cranes.

Naturally Tadano distributors see strongest demand in the O&G regions, including
Saleh & Abdulaziz Abahsain Co., based in Al Khobar, and United Al Saqer, in Abu Dhabi.

A good test of Tadano’s popularity came in 2010-12 as the value of the Yen climbed, hurting Japanese exports. Nevertheless, key Tadano customers, focused on quality and safety, continued to buy during this period.

Liugong
Country: China

Based in Liuzhou, China, LiuGong was one of the first Chinese equipment companies to open a subsidiary in the GCC, and were the first to open a spare parts distribution hub in Jebel Ali, where they have a 2,700m² warehouse with an automated warehouse management system.

Key distributors include Abdul Hadi Abdullah Al Qahtani & Sons Co in Saudi Arabia, and Al Attiya Motors and Trading Co. in Qatar.

LiuGong works closely with engine manufacturer Cummins and transmission specialist ZF, including joint ventures in China with the two companies.

LiuGong claims to be the among the world’s largest manufacturer of wheel loaders. The company was founded in 1958, and in 1966 produced China’s first modernised wheel loader.

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