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Thursday, 20 November 2008 21:02 UAE time

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City of cranes

by ArabianBusiness.com staff writer  on Wednesday, 02 January 2008

The arc and swoop of a tower crane above a building site is one of the first things visitors to the city notice. It's a sight repeated in many of the growing cities around the region, from Doha to Abu Dhabi.

But while apocryphal figures about the percentage of the world's cranes that are in Dubai - usually 25-30% - abound, contractors have to deal with the day-to-day reality of long lead times and tight supply when it comes to getting hold of the equipment they need. According to information from Indusmarket, a research company, this problem is one Dubai shares with many other parts of the world.

"The outlook for delivery time of cranes in the US, Europe and Japan shows delivery times of between 6 months and two years plus," said Theo de Boer, managing director, Indusmarket.

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"I don't have a solution, but I think people need to manage their project tenders so there is enough time to hire equipment and plan for a two year lead time."

De Boer recommends tracking projects region wide, to keep an eye on when jobs are coming to a conclusion, making cranes available. He also warns of the dangers of changes in currency value over a long equipment lead-time, making him in favour of shorter tenders and currency hedging.

"Two years waiting time means you should secure your currency for what you're buying," said De Boer.

Long waiting times don't just apply to traditional manufacturers from the US and Europe, it is also affecting emerging market producers from countries such as China. While De Boer thinks China is worth watching, there is a caveat.

"While China is also producing more equipment, it's facing problems too, because it can't get components on time," he said.

That said, there are local equipment companies doing a steady trade with Chinese-sourced equipment, as well as companies from other Asian countries keen to get their products into the UAE's booming construction market, either going it alone or through various partnerships.

HanKook, a South Korean company, and Modern Emirates Heavy Cranes Company are a case in point. HanKook set up HanKook Tower Crane in Dubai, in 2007.
"HanKook Tower Cranes started in South Korea in 1978," said Martin Park, regional branch manager. We found it relatively simple to adapt and enter the Middle Eastern market as crane products are in great demand with all the construction going on right now.


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