11
ZHANGCHUNYU INTERVIEW
IRN JANUARY-FEBRUARY 2015
than topurchase. Themind-setofpeople ischanging
and now more people prefer to rent.” There is a
long-held belief in China that states that ownership
of goods is preferable to leasing or renting, but the
recent slowdown in China’s economy is having a
positive impact on attitudes; “when people look at
their accounts theywouldprefer to rent thanbuy.”
So, howwill this translate intogrowth?“It’sdifficult
to say, but some people think therewill be 50000 to
60000 AWPs in China in the next three years.” This
could lead to a total fleet of 500000 units in China
by the time it reachesmaturity, althoughMr Chunyu
points out this is based on an estimate by a major
manufacturer.
The truth is, it is difficult to make an accurate
estimate, particularly when it comes to putting a
“It’s natural for us to grow at a fast rate because
we are a young company that has just invested in
lots equipment, but thiswill slowdown.
“Maybe the market does not need that much
immediate demand from rental, but sure there is a
demand in rental in general and perhaps it’s about
30%up a year fromnowon.”
The company’s new big booms will exploit some
of those rental opportunities, among them a major
bridge project in central China and an export centre
in central Shanghai.
Investments
Expanding on the company’s purchasing policy, Mr
Chunyu says theyhavenot yet invested inplatforms
produced by Chinese manufacturers, preferring to
use established Western suppliers until the local
product ismoreproven.
“However, we have heard from certain parts
of the market that they are okay to use, but we
have not tried them. And this is from a short-term
prospective; I think they will have the chance to
prove themselves, and the construction market is
so huge in China that some of those construction
companies will choose to invest in them. Also small
scale rental companies with less cash will invest in
them”
Summing up general rental Mr Chunyu says
China holds great promise. “From a long-term view,
the general rental industry in China has a broad
potential due to the fast economicdevelopment and
the rising awareness in safety. From a short-term
view, the wider economic situation and the huge
influx of construction equipment [before 2012 as a
result of themassive Chinese stimulus programme]
havehindereddevelopment.”
The economic slowdown has impacted the
construction market, and this is leading Horizon to
prioritise its capital investment in aerials, power
generators and industrial forklifts – products that
lend themselves to non-construction sectors that
are less impacted by the slowdown. Even so, it will
continue to invest in the road building and shoring
fleets aswell.
In fact, Horizon’s investment in its five different
product groups is also providing some kind of
protection by diversifying its customer base: Mr
Chunyu says that few of its customers rent more
thanoneof its product categories.
Diversified customer base and an increased focus
on non-construction markets: that’s a formula that
many rental companies in theWestwould recognise.
China’s rental sector may be young, but it is
accelerating through thegrowthphases.
IRN
timescaleon reaching the stageof full development.
“Theeconomyhere is sochangeable – fast then slow
– it’s difficult to say.”
He adds, “We will not see explosive growth in
the market because as it develops, the equipment
volume may not increase at such a fast speed due
togreater competition and lower rates of return.”
Operator challenge
Challenges also lie in finding operators. “They are
subject to intensive workloads and harsh working
environments,” says Mr Chunyu, “As the population
structure changes in China, young people become
reluctant to engage in this profession.”
He says Horizon is leading the way in terms of
improving working conditions, and feels effective
operator training is important. “We have perfected
a system of training and evaluation. Operators can
carry out work only after professional training and
being approved through evaluation.”
Thecompany isalsoapplying for IPAFmembership,
“and we are looking forward to further cooperation
with theorganisation.”
Mr Chunyu puts a value of CNY1.2 billion (€164
million) on Horizon’s fleet and believes there will
be 30% to 40% fleet growth in the future, purely
because the AWP market in China is on a greater
growth trajectory than its other products, which are
alreadywell established inChina.
Horizon’s annual revenue is about CNY300million
to CNY400 million (€40 - €55 million), and grew by
50% growth last year. “Wewill certainly grow in the
future but it will perhaps be 40% next year [2015]
and 30% the year after that.”
Horizonwas employed to help build the Shanghai World Expo Exhibition & Convention Centre
One of Horizon’s Genie booms during the construction of
the BeijingNational Stadium, commonly known
as the Bird's Nest
Road building (compaction
roller and a paver)
machinery fromHorizon’s
200-strong fleet
Horizon took delivery of
the first 185 ft (56m)
working height 1850SJ
Ultra Boom in China. The
company’s president
JiayinWang and JLG
Industries’ president
Frank Nerenhausen
marked the occasion at
Bauma China 2014
