The pace of change
By Helen Wright14 November 2012
Emerging markets are of growing importance to German manufacturer Liebherr, whose traditional stronghold has been Europe. Expansion into new territories has fuelled revenue growth at the company, and helped to insulate it to some extent from the impacts of the downturn in the developed world.
Brazil is of key significance. The country is hosting the 2014 World Cup and 2016 Olympic Games and is not only improving infrastructure ahead of these events, but also embarking on a long-term programme of investment – making it attractive territory for the construction industry.
Klemens Ströbele, managing director of Liebherr Brasil, said the company had rapidly expanded since it was first established in the country in 1974.
“Within the last 10 years Liebherr Brasil’s revenues of increased more than eightfold to almost BRL 450 million (US$ 218 million) in 2011,” Mr Ströbele said, adding that the forecast for the current year was for revenues of BRL 497 million (US$ 241 million).
The locally-produced portfolio includes the R 944 C, R 954 C and R 964 C crawler excavator models (with operating weights ranging from 40 tonnes to 80 tonnes), the 25 tonne category A 924 C wheeled excavator as well as the L 538 and L 580 wheeled loaders, which have operating weights of 12 tonnes and 25 tonnes, respectively.
For mining customers, Liebherr Brasil currently manufactures the 302 tonne R 9350 and 345 tonne R 9400 large hydraulic excavators, while it also fabricates tower cranes, truck mixers and dry batching plants in the country, and plans to restart its offshore crane production line in Brazil next year, after it was discontinued in the 1990s.
“For all these varied engineering and manufacturing activities, our plant in Guaratinguetá [a municipality in São Paulo] today has a total production area exceeding 116,000 m²,” Mr Ströbele said.
Guilherme Zurita, commercial manager for mixing technology at Liebherr Brasil, highlighted the fact that the company is increasingly developing bespoke machinery for the Brazilian markets, as the individual needs of local customers shape design criteria.
“The features and designs of standard product solutions designed for European customers are not always appreciated here,” Mr Zurita said.
“Furthermore, for machinery powered by combustion engines such as our earthmoving or mobile crane product lines, recent emission regulations in Europe and the US have separated the world into regulated and non-regulated markets, requiring completely different drive-train solutions. This is another important reason to adopt locally engineered or at least locally adapted technologies for markets like Brazil.”
Mr Zurita said Liebherr Brazil was currently developing a wheeled loader production programme for the Brazilian market, to be based at its Guaratinguetá site, and had also introduced a tailor-made concrete batching plant for the Brazilian market.
As far as the local wheeled loader range is concerned, Mr Zurita said it would follow the same pattern as the L 556 II wheeled loader production for non-regulated markets that the company developed at its Chinese manufacturing plant in Dalian in 2011. This saw the introduction of a 3.5m³ bucket size machine last year, with more sizes under development.
“We are currently pursuing exactly the same concept to establish a wheel loader production program for the Brazilian market here in Guaratinguetá. The first model is due to be introduced in 2013,” Mr Zurita said.
Meanwhile, the company has also introduced a new concrete batching plant developed specifically for the Brazilian market – the TDA 100 Dry Batch Plant, which has a maximum output rate of 140 m³ per hour, and boasts an inline aggregates silo with four compartments with a total capacity of 70 m³.
The plant is also equipped with a dust filter system and extractors at the cement silos and the discharge hopper.
“This product emerged from a completely local technical design and engineering approach,” Mr Zurita said, explaining that the TDA 100 was available exclusively to customers in Brazil because it helped contractors to comply with local tax regulations.
“Unlike in Europe, tax regulations in Brazil for concrete supply to construction sites traditionally require the concrete to be mixed inside the truck mixer and not in a stationary mixing plant. Dry batching plants, in contrast to wet concrete mixing plants, weigh the constituents without water and add them to the truck mixer in parallel with the water, after which the concrete is produced in the truck mixer’s drum.
The standard Liebherr portfolio for batching plants did not include this kind of solution, since there is no demand for it in our traditional markets. In order to succeed with this product range in Brazil, the only choice was to adopt dry batching technology.”
Mr Zurita explained that, although Liebherr Brasil’s objective was to serve the local market, it now also saw potential to export the TDA 100 internationally, into areas where dry batching is the norm – he said the focus would initially be on markets in Latin America such as Peru, Chile and Colombia.
Stefan Heissler, a member of the board of directors of parent company Liebherr International, said the company’s strategy was to manufacture products in or near its most important sales regions.
“Our aim is to be recognised as a local manufacturer with a high technical competency by our customers in these regions,” he said.
Overall, Mr Heissler said Liebherr Group expected to report sales of around € 9 billion (US$ 11.4 billion) for 2012, up +9% year-on-year. Mr Heissler said the manufacturer also planned to have invested € 770 million (US$ 978 million) by the end of the year in the modernisation and expansion of its worldwide production facilities, as well as strengthening its sales and services network.
Meanwhile, Mr Ströbele said the company expected the Brazilian economy to continue its phase of economic growth – boosted by the 2014 FIFA World Cup and the 2016 Olympic Games, but not for these reasons alone.
“The Government’s Growth Acceleration Program (PAC) is expected to provide funding of approximately BRL 990 billion (US$ 486 billion) for investment in infrastructure measures during the next four years. These activities will be complemented by on-going private investment in the industries in which our customers are active,” Mr Ströbele said.
Twelve Brazilian stadiums are being either constructed or modernised for the 2014 FIFA World Cup, representing a total investment of over BRL 1.9 billion (US$ 900 million).
Nine of these projects are being conducted with help of Liebherr cranes, the largest of which – a 1,350 tonne capacity LR 11350 crawler – is operating at the Arena Corinthians Stadium construction project in São Paulo.
Covering a total area of 200,000 m², this BRL 800 million (US$ 393 million), 66,000-seater stadium is planned for completion in December 2013. It is located near a metro and a train station in the heart of one of the city’s favela (slum) districts, and it is hoped that the development will bring a boost to the area.
Contractor Odebrecht is using two Liebherr 195.3 HC tower cranes, two top-slewing 98.3 HC models and a 450 C top-slewing crane on the project, together with the LR 11350 – the largest Liebherr crawler crane operating in Latin America.
With its 1,350-tonne capacity and maximum boom length of 228 m (achieved using a combination of a main boom and a luffing fly jib), the LR 11350 is being used for heavy-load duties as well as manoeuvring the stadium’s roof trusses into place.
Furthermore, two 200 tonne capacity LTM 1220-5.2 wheeled mobile telescopic cranes and one LTM 1100-4.2 100-tonner were used for temporary lifting jobs for this project.