Al-Bahar and Hitachi tell James Morgan why it will take more than a global pandemic to dampen demand for tracked excavators on the construction sites of the Middle East.
As is the case in the wake of any crisis, economic commentators have been forced to hit the reset button during recent years, and with good reason. Without making the distinction between pre- and post-pandemic figures, contrasting the year-on-year performance of the construction industry would be akin to comparing apples with oranges. It just wouldn’t make sense.
Total contract awards for GCC construction projects dropped by 35 percent to just $69 billion in 2020, according to analysis from Deloitte and MEED Projects. The authors of the study note that the effects of coronavirus, coupled with falling oil prices and reduced government spending, resulted in the worst market conditions in nearly two decades.
Fortunately, amid ongoing relaxations in pandemic-related restrictions and a resurgent oil price, things appear to be looking up for the Gulf’s construction sector. In the UAE, for example, the equipment market is on course to grow at a compound annual growth rate (CAGR) of 7.80 percent during the period 2021-28, according to research from Arizton Advisory and Intelligence.
Encouragingly, regional excavator demand is likely to witness an above-average uptick, according to the analysts.
Two companies well placed to capitalise on this landscape are Mohamed Abdulrahman Al-Bahar (Al-Bahar), Caterpillar’s official dealer in the Middle East, and Hitachi Construction Machinery Middle East Corporation (HMEC).
Piet van Bakergem, General Manager of HMEC, tells Plant & Equipment that his team has succeeded in meeting regional requirements for Hitachi tracked excavators, despite the many challenges posed by coronavirus.
“After the slowdown caused by Covid-19 and the restart of construction projects, the demand for our equipment enjoyed a tailwind in 2021 – a trend which we are seeing continue into 2022,” he explains. “As everyone knows, many countries were forced to close their borders and transactions were very limited during the pandemic. This had a significant impact on logistics and transportation, but we succeeded in managing transactions on a case-by-case basis, maintaining full support and satisfaction for both Hitachi’s dealers and end users across all GCC countries.”
Samer Ismail, Product Manager – Earthmoving and Excavation at Al-Bahar, seems similarly stoic about his team’s performance during the past 12 months. “Every year comes with its own challenges, and 2021 was no different,” he tells Plant & Equipment. “At Al-Bahar, we are glad to have continued supplying durable, industry-leading products along with some truly customer-focused offers during this period. We also look forward to a much more fruitful year for everyone in 2022.”
Perhaps because of their versatility and durability amid soaring temperatures and rough terrain, the Middle East’s appetite for tracked excavators tends to be maintained even during the most challenging of economic climates. This, of course, is music to the ears of companies such as HMEC and Al-Bahar, both of which have extensive experience of supplying these units to the region.
“Due to the nature of the projects we tend to see in the Middle East, mid-size excavators are usually in highest demand,” says HMEC’s van Bakergem. “This is great news for Hitachi because we are a premium construction machinery manufacturer that end users can rely on. Consequently, we are witnessing healthy levels of demand for tracked excavators, with our 20-tonne and 30-tonne models proving the most sought after at present.”
Orders for Caterpillar’s tracked excavators have remained equally strong for Al-Bahar, according to Ismail, who explains that these units are perennial favourites among the Middle East’s construction sites.
“Demand for the right machines has always existed and will continue to exist,” he says. “New projects and growth are inevitable; it is all about tapping into this demand with the best products and a solid track record of customer support.
“At Al-Bahar, we have a rich legacy of more than eight decades of serving this region,” Ismail continues. “Moreover, we have a world-renowned partner in Caterpillar, which is focused on building products that are durable and tailored to our customers’ requirements.
“In terms of our most popular models, Caterpillar’s 320 medium excavators and 336 large excavators are in highest demand, based on the current applications and project requirements of our customers.”
But what types of project are driving current demand for mid-range and heavy-duty tracked excavators in the Middle East? Landscaping, road development, infrastructure programmes, waste-handling requirements and general construction works are among the primary segments to which HMEC is currently catering, according to van Bakergem. While Al-Bahar is also supplying Caterpillar crawlers for infrastructure and construction projects, Ismail notes another raft of potentially lucrative contracts on the horizon.
“We expect most GCC countries to push forward with national railway works before long, which will lead to greater demand for tracked excavators and construction equipment in general across the region,” he explains.
The popularity of tracked excavators among Gulf-based contractors may be evergreen, but that’s not to say leading manufacturers such as Hitachi and Caterpillar are resting on their laurels. On the contrary, both HMEC and Al-Bahar are continuing to expand and enhance their regional line-ups.
“Built on the foundation of its superb technological capabilities, Hitachi Construction Machinery is delivering green ways for end users to cut carbon emissions and mitigate their environmental impact, in line with life cycle assessment (LCA) methodologies,” says van Bakergem. “The latest Hitachi models utilise a range of technological advances, including the new standard mode which optimises fuel efficiency. We also have a long-standing commitment to the recycling of components, such as aluminium parts in radiators and oil coolers, and resin elements, which are marked for recycling.
“Hitachi’s environmental vision is to help build a low-carbon and resource-efficient society that is in harmony with nature. The Hitachi Environmental Innovation 2050 strategy sets out the long-term targets that we will meet in order to contribute to this sustainable society.
“Our new models also employ advanced technologies to achieve excellent productivity with enhanced controllability,” van Bakergem adds. “Our cabs are comfortable, our units are easy to maintain, and Hitachi’s comprehensive service package enables operators to work effectively in the toughest of environments.”
Al-Bahar, meanwhile, is looking to capitalise on tracked excavator demand with the regional launch of a new efficient and cost-effective crawler. “Our most recent addition is the Caterpillar 320 GX, which Al-Bahar introduced to its line-up in Q4 2021,” explains Ismail. “Our new GX models offer greater fuel efficiency, reduced maintenance costs and lower initial purchase prices compared to our other popular models. This means our customers have more choice than ever before.
“With the support of Caterpillar, we plan to further expand our GX line-up with new models during the coming year, and we will introduce some enhanced machines to our premium GC range as well.”
As for the next 12 months, both Hitachi and Al-Bahar are confident that requirements for tracked excavators will remain high in the Middle East. According to the latter, keeping pace with demand will represent the biggest challenge.
“So far this year, we have seen huge demand for Caterpillar tracked excavators in this market,” says Al-Bahar’s Ismail. “Of course, the pandemic has had a significant impact on the global logistics sector, so ensuring we have sufficient supply to meet our customers’ requirements will probably represent our greatest focus.”
Van Bakergem anticipates that HMEC’s order book will be similarly full in 2022, noting: “We are expecting more demand for Hitachi tracked excavators in our territory as work resumes on projects and Gulf countries continue to push forward with new developments connected to infrastructure and tourism.
“We also predict increased demand for these units due to initiatives such as Saudi Vision 2030, Egypt Vision 2030 and UAE Energy Strategy 2050,” van Bakergem concludes. “Here at Hitachi, we are well prepared to support these ambitious projects with our reliable products.”
Is It Still ‘Crawl Or Nothing’ In The Gulf Market?
Tracked excavators have reigned supreme on Middle East construction sites since time immemorial. Indeed, their wheeled counterparts continue to fulfil a supplementary role in the region, although – thanks to increased urbanisation – this situation is perhaps not as one-sided as it once was.
“The Middle East’s terrain is one of the main reasons behind the continued popularity of Caterpillar’s tracked excavators, in addition to other factors such as project type, typical applications and operating budgets,” explains Al-Bahar’s Ismail. “As such, tracked excavators remain in high demand on large-scale, remote developments, although it’s important to note that wheeled models are preferred inside the region’s cities.”
“Hitachi tracked excavators are still outperforming other variants,” agrees HMEC’s van Bakergem, “but with so many cities finalising infrastructure, wheeled excavators are becoming more and more commonplace owing to their multifunctional nature.”
So, could the crawlers’ dominance wane as the Middle East pushes forward with urban developments? Only time will tell.