Dubai: Construction cranes that used to populate the Dubai skyline have flown to third world, Asian and more recently recovering Arab Spring countries in a brisk re-export and rental trade for local businesses.
Once the crane capital of the world, Dubai was home to almost 25 per cent of the world’s cranes during the height of the property boom but the cranes began to disappear gradually with the ensuing slump.
So where did all the cranes go? “Where all the money goes,” said Gary Jones, business development manager at Orientals Specialist Lifting, a mini-crane company, on the sidelines of the Big 5 show.
And right now the money is in renting cranes to local construction companies or selling them abroad to recovering Arab Spring countries like Egypt and Libya as well as Iraq and Saudi Arabia, according to Nabil Al Zahlawi, managing partner of NFT, an Abu Dhabi-based firm that specialises in renting and selling new and used cranes.
The company is negotiating a Dh2 million deal supplying 100 new cranes to a government housing project in Iraq and a similar deal worth Dh50 million to Dh70 million to supply 50 cranes to a Libyan government housing project, he said.
In Saudi Arabia, NFT is renting and selling 100 cranes for Dh180 million to the King Abdullah Financial District (KFD) project that is due for completion in 2014, he added.
The Bin Laden Group, the Saudi construction giant, has been shopping for cranes in Dubai.
“We are using the Potain cranes, a French brand, that we buy from Dubai through NFT. We bought Dh150 million in cranes just from Potain last year,” a senior company official told Gulf News during the exhibition.
With a slowdown in new construction projects in Dubai, contractors are unwilling to invest large amounts of money in buying new cranes, preferring instead to rent them, crane companies say.
For NFT, during the boom, 80 per cent of business came from selling cranes and 20 per cent from rentals. Today this has reversed to rentals making up 80 per cent of their business.
“Unfortunately, no one is buying these days. Either they have enough cranes or they don’t want to invest on a long-term basis so the replacement is to rent cranes, said Al Zahlawi.
Buying a tower crane costs from €50,000 to €2 million depending on brand and size whereas the average rent rate reaches Dh30,000 a month, he said.
Mini-cranes are also seeing a shift from purchases that cost €60,000 euros to rentals at Dh. 12,500 a month for a UNIC Spider crane, Jones said.
“Capital expenditure has gone down and contractors don’t want to put all their money in equipment,” he said. Their business mainly comes from machinery installation companies, aircraft maintenance, palm-tree installations and façade companies.
After Dubai’s property slump in 2008, projects were delayed or cancelled and companies had to figure what to do with the cranes guarding the ghostly construction sites.
“We bought back a lot of the cranes from the market and re-exported them to different destinations starting from beginning of 2009 until now,” said Al Zahlawi.
They re-exported branded used cranes to India, Pakistan, Bangladesh, Taiwan, Singapore and African countries while some cranes ended up in the scrap yard.