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Cranes dominate the machinery market in the GCC

Cranes dominate the machinery market in the GCC



GCC crane market to reach $1.11bn

Cranes are expected to dominate the machinery market, owing to numerous construction projects, such as buildings and water projects that are going on in the GCC

August 2019

The GCC construction machinery market was valued at $2,230.53 million in 2018 and is expected to clock a CAGR of 3.09 per cent, during the forecast period, 2019 to 2024, according to Reportlinker.

Some of the factors driving the growth of the market are growing construction industry in the region, increasing demand for cranes, and developing trend towards automation and telematics. However, rising demand for rental services may hinder the sales and growth of new construction equipment sales in the region.

The GCC construction machinery market is expected to grow at a steady pace during the forecast period. The region has an overall strong demand for heavy machinery, with an estimated $128 billion worth of projects to be completed annually, between 2016 and 2019.

Cranes are expected to dominate the machinery market, owing to numerous construction projects, such as buildings and water projects that are going on in countries, such as the UAE and Oman.

The UAE and Saudi Arabian construction industry are on the rebound after witnessing a significant pressure, due to a prolonged slump in oil prices. However, both the governments’ increasing the infrastructure investment and launching development projects for the coming years is expected to boost the construction sector, and may also encourage private sector developers to bring forward their own projects, in turn, increasing the demand for construction machinery

 

CRANE SEGMENT DOMINATES

The GCC crane market is expected to reach $1,112.27 million by 2024.

The crane market has witnessed a short period of decline in the region, however, economies of the Middle East region are picking up, triggering investments in residential, commercial, and infrastructure projects.

Due to the major ongoing projects, the domestic and foreign tower crane manufacturers are showing great interest in construction activities among GCC countries. This is because the local demand for these machines is high, specifically in the UAE. UAE-based tower crane supplier and Potain dealer NFT currently have 208 tower cranes on hire between Abu Dhabi, Dubai, and Sharjah.

Highrise towers, which are very popular in the GCC countries, require luffing cranes with a big capacity, such as the Potain MR 418. For instance, 10 MR 418s have been installed at the Royal Atlantis Residences from the past two years. This makes the Royal Atlantis job site the first in the UAE to use the new Potain machine.

Apart from tower cranes, the increasing construction activity in the GCC countries has generated significant orders of mobile cranes. For instance, Sarens has deployed a fleet of 17 cranes to help build one of eight stadiums that will host the country’s World Cup championship matches. For this project, a total of 17 mobile and crawler cranes were mobilised on-site over a timeline of 18 months.

High capacity cranes are also high in demand in the GCC countries due to the high number of energy-related projects and construction of industrial facilities. For instance, Mammoet, which is a privately held Dutch company, has been involved in the expansion of a polypropylene plant in the Gulf Coast, which will increase the site production capacity by an additional 450,000 tonne a year.

The increase in overall crane count indicates that the construction market is rapidly growing in the GCC countries. It is anticipated that this growth may continue through 2019 and 2020, as, many cities in the GCC countries continue to add to their roster of proposed developments.

 

UAE: FASTEST GROWTH RATE

The UAE construction machinery market is expected to witness the fastest growth rate of 4.12 per cent, during the forecast period, 2019-2024.

The construction market is a key driver for the UAE’s economy. However, the sector has come under substantial pressure, due to the prolonged slump in oil prices. Despite the prevailing climate, the construction industry remains resilient and the outlook for the sector remains cautiously optimistic.

A large number of infrastructure works has been started in recent years in the Emirates. Major roadway, airport, and port projects are ongoing in preparation of further expected population influx and of the upcoming Expo 2020 in Dubai.

The ongoing airport expansion project at Dubai International, worth $7.8 billion, is expected to increase the demand for construction machinery in the country.

Analysing the potential increase in the construction machinery demand in the country, manufacturers are expanding their product portfolio. Among them, CNH Industrial NV is one such company, which recently launched entry-level backhoe loaders in the country.

With consistent real estate development in cities, such as Dubai and Abu Dhabi, the demand for construction machinery has been continually increasing.

The GCC construction machinery market is mostly characterised by the presence of numerous international companies, resulting in a highly competitive market environment. The top-ten players in the market account for around 63 per cent of the market share and the remaining 37 per cent of the market share is dominated by other players, such as Yanmar, JCB, Wirtgen Group, Terex, etc.

The market is a consolidated one with Caterpillar being the leader, followed by Liebherr, Komatsu, Volvo Construction Equipment, and CNH Industrial.

Major players are investing considerably in their research and development (R&D) department in order to integrate innovation with excellence in performance. The demand for high performance, efficient, and safe handling equipment from the end market is expected to make the market more competitive over the forecast period.




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