on any new investments.
As previouslymentioned, around80%of
access equipment in the country is ownedby
rental companies.According toMrChunyu
endusers are found in the Shipyard and
construction industries - the former being the
first customer ofAWPs inChina.
“With the development of rental companies,
more construction companieswill prefer to
rent rather than topurchase.Themind-set of
people is changing andnowmore people prefer
to rent,”There is a long-heldbelief inChina
that ownershipof goods is preferable to leasing
or renting them, but thatmindset is changing.
“It’s partly todowith the slowdownof the
China economy –whenpeople look at their
accounts theywouldnowprefer to rent than
buy,”saysMrChunyu.
Saturation point
So,howwill this translate intonumbers? “It’s
difficult to say,but some people think therewill
be 50000 to60000AWPs inChina in the next
three years.”This could lead to500000units in
China by the time it reaches saturationpoint,
althoughMrChunya points out this is based
on an estimate by amajormanufacturer.
The reality is, it’s difficult tomake accurate
estimates,particularlywhen it comes toputting
a timescale on a saturationpoint.
“The economy here is so
changeable – fast
then slow– it’s difficult to say.”
MrChunyu adds,“Wewill not see explosive
growth in themarket because as it develops the
equipment volumemay not increase at such
a fast speed,due to greater competition and
lower rate of return.”
Challenges also lie infindingoperators.
“They are subject to intensiveworkloads and
harshworking environment,”explainsMr
Chunyu,“As the population structure changes
inChina, youngpeople become reluctant to
engage in this profession.”
Horizon is also leading theway in its
working environment policy, and feels effective
operator training is important.“We have
perfected a systemof training and evaluation.
Operators can carry outworkonly after
professional training andbeing approved
through evaluation.”
Additionally, the company is applying
for IPAFmembership,“andwe are looking
forward to further cooperationwith the
organisation.”
MrChunyuputs a value ofCNY1.2billion
onHorizon’s fleet andbelieves therewill be
30% to40%fleet growth in coming years,
purely because theAWP is on a greater growth
trajectory thanother construction equipment,
which is reaching saturationpoint,he says.
ShanghaiHorizon’s annual revenue is about
CNY300m toCNY400m and is basedon a
50% growth last year.“Wewill certainly grow
in the future but itwill perhaps be 40%next
year and30% the year after that.
“It’s natural for us to grow at a fast rate
becausewe are a young company that has just
invested in lots equipment,but thiswill slow
down.
“Maybe themarket does not need thatmuch
immediate demand from rental,but there is a
demand in rental in general andperhaps it’s
about 30%up a year fromnowon.”
The company’s bigboomswill exploit some
of those rental opportunities, twoof them
being a bridge project in centralChina and an
export centre in central Shanghai.
Expandingon the company’s purchasing
policyMrChunyu explains it does not yet buy
products produced in the domesticmarket and
iswaitinguntil they becomemore proven.
“However,we have heard from certainparts
of themarket that they are okay touse,butwe
have not tried them.This is from a short-term
prospective; I think theywill have the chance
toprove themselves, and the construction
market is sohuge inChina that some of those
construction companieswill choose to invest in
them.Also small scale rental companieswith
less cashwill invest in them.
Summingup the general rentalmarketMr
Chunyu saysChina holds great promise,“From
a long-term view,China has broadpotential
due to fast economic development and the
rising awareness in safety,while from a short-
term view, the external economic situation and
the huge influx of equipmentwouldbecome
certainhindrances todevelopment.”
AI
One of Horizon’s Genie booms during the
construction of the Beijing National
Stadium, commonly known
as the Bird’s Nest.
27
JANUARY-FEBRUARY 2015
access
INTERNATIONAL
Horizon took delivery of
the first 185 ft working
height 1850SJ Ultra Boom
in China. The company’s
president JiayinWang
and JLG Industries’
president Frank
Nerenhausenmarked the
occasion at Bauma China
2014.
INTERVIEW
