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Sat 1 Apr 2006 04:00 AM

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Bargain hunter plant dealers target Dubai

International dealers and hirers hunt for construction equipment bargains in boom town

Plant dealers and hire companies from across the globe are descending on Dubai to source machinery, as a global shortage of kit forces them to buy machines from overseas.

The increased demand from overseas buyers has pushed up second-hand kit prices by as much as 20% over the last year, according to local plant dealers.

But the increased prices did not deter the foreign legion of plant dealers from converging on Dubai this week to view the 1,700 lots available at the Ritchie Bros. auction in Jebel Ali.

Companies from all over Europe, as well Malaysia, Singapore and Pakistan, were present at the two-day auction of used construction equipment.

Henk Schotsman, owner of Dutch plant firm A Schotsman, told Construction Week: “In Europe, it is simple, there are just no quality used machines, and those that are available are being sold at premium prices. There are so many end users vying for the same equipment; this has pushed up prices considerably.

“Dubai is the place where all the construction work is happening, which is why it is better to buy here where there is much more to choose from and you can decide what to pay.”

The owner of a self-drive plant hirer in England, who didn’t want to be named, said he had returned to Dubai after discovering last year that it was cheaper to ship home Italian breaker models than buy direct from Manchester, where the company is based.

“Although it does not appear to be as cheap here compared to the end of last year, the used equipment still costs less than the UK and other parts of Europe,” he said.

Representatives from Belgium, Luxembourg, Sweden and Wales were also present at the event.

However, Mohmoud Al Sheikh, marketing manager at Ayad Trading Company in Dubai, believes the UAE is also suffering from increased costs: “I have seen prices for used excavators, bulldozers and wheel loaders rise by 15-20% in the past year alone.”

A spokesman for Caterpillar admitted: “Availability has not yet recovered to where it was in the first half of 2004, and increases in demand continue to pose a problem for many of our production operations.”

Keith Lupton, director and vice president of regional sales at World Wide Auctioneers Middle East, said: “There is a definite shortage in steel, and with the giant rubber tyres used on most dozers.

“There is even an element of greed now, in that prices in the second-hand market are pushed up because firms know that demand is outstripping supply.”

Stephen Branch, divisional manager of Ritchie Bros. Middle East, said that every continent is having problems: “Regional discrepancies result in shortages of equipment right across the globe,” he said.

“If there is not enough equipment to meet demand, this produces very competitive prices, and this is evident right now in one of the world’s strongest markets — the US.

“It is also difficult to buy plant out of Europe because of the strong Euro, and it is a similar situation in China and Japan.”

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