Kieran Hegarty is president of Terex Materials Processing (MP), the division that includes all cranes. (Photo: Telex)
Since the sale of Demag cranes in 2019, the remaining Terex crane brands were collected into the Terex MP business unit, but now everything has changed.
The reorganization transformed our tower crane and rough terrain businesses into two separate entities.
Currently, there are Terex tower cranes and Terex rough terrain cranes, both included in the lifting category of Terex MP, part of Terex Corporation. Other cranes manufactured by Terex are the Flanna pick-and-carry type and are manufactured in Australia and India.
Changes include independent leadership and brand identity.
In the first of a series of articles, Alex Dahm speaks to Kieran Hegarty about the transformation of the Terex Lifting business and other news.
AD: What does the transformation of Terex Cranes into two separate entities mean for crane end users and purchasers?
KH: Firstly, the Terex crane business within Terex MP is made up of so-called specialized lifting companies. We own Terex tower cranes based in Fontanafredda, Italy. Terex’s rough terrain cranes are also based in Italy, but with a factory in Cresperano. Additionally, there is the Franna, an iconic pick-and-carry crane from Australia.
These are three separate business units within Terex MP serving the lifting industry. Historically, when Terex had a complete crane division, everything from all-terrain cranes to tower cranes to rough terrain cranes to flannas operated as a single business.
The Terex TRT 65 rough terrain crane is manufactured in Cresperano, Italy. (Photo: Telex)
Terex sold its all-terrain crane and lattice boom crane operations to Tadano, a former Demag operation in Zweibrücken, Germany. The remaining lifting business was a good business and had been profitable for many years, so we basically wanted to keep it going. However, tower cranes are a unique business, with distinct and often different customer requirements. Customers using tower cranes tend to be very different from those using rough terrain cranes. They typically work on larger infrastructure projects, such as high-rise buildings and residential buildings.
We thought it would be better to follow the rest of the Terex MP models with these individual units. We believe this will lead to a very focused business. It is important to focus on product development and how to bring it to market. We decided to split Tower and Rough Land Management into two separate divisions. Over time, we believe this will lead to greater focus and greater intimacy with our customers.
This is also how we run the Franna business which has given us the autonomy to operate independently. We recognize that the pick-and-carry concept requires a certain level of focus.
As an example, rough terrain crane businesses typically go through traditional distribution. This is an agency buying, selling, and rental model. And the tower crane business focuses on a different customer base. That’s the logic behind it.
show me the money
AD: How much is the investment? Wait, does it cost that much to split the business?
KH: As a result of the separation and new focus, we have invested several million euros in our facility in Fontanafredda to facilitate some of our large tower cranes in development, as well as the production of self-erector cranes. We also did It is also a product segment within Terex Tower Cranes. We opened the factory in April. More than that, this reorganization did not require any major capital investment, but rather was aimed at refocusing the management team.
AD: Apart from a separate management team, does it also include a separate organization for spare parts, sales and everything else?
KH: Terex leverages its global footprint and shares facilities where it makes sense. This extends to all of our businesses. Although we work with our customers as individual companies, we utilize a common parts warehouse.
Terex has opened a new factory for freestanding tower cranes in Fontanafredda, Italy. (Photo: Telex)
Regarding our parts facilities, Terex has made significant investments in Europe with parts warehouses in Rosendaal, the Netherlands, and Northern Ireland. He has two investments in the United States, in Kentucky and Memphis. We continue to share physical infrastructure and warehouses, but our customer-facing teams are separate.
We also have a separate team for machine sales. This has been in place for the past two years and focuses on individual product lines.
AD: So the crane business, which is currently separated, is not being put together for sale?
KH: Absolutely not. If it had been sold, it probably would have been kept as is. Well, that’s not the case. This restructuring is due to the recognition that we serve fundamentally different markets and need to be highly focused. If you look at MP’s 22 business units, that’s our operating model.
By type of crane
AD: Regarding autonomous upright cranes, given recent investments, where and how do you see the field likely to grow?
KH: If you look at freestanding cranes, it is a very established concept, especially in central European markets such as Italy, Germany, Austria, Switzerland and France. In other European markets such as the UK, Ireland and Scandinavia, self-electrification as a concept has not reached the same level of market penetration.
However, the situation changes as freestanding cranes increase in capacity and larger models become mainstream. The company plans to launch a 47m self-erector in 2024. At the top end, the market expands as self-erector capabilities grow.
We also believe that as our capabilities expand, there will be additional opportunities to penetrate markets such as the UK and Scandinavia.
The regions where we see great potential are Germany and the DACH countries. Self-erectors are also beginning to be adopted in markets such as India. In the long term, we see this as a truly global opportunity.
AD: What about North America? Is this big new self-erector 47 meter model potentially interesting?
KH: Yes, my understanding of the North American market is that there is a preference for anything above the 40 meter class. We watch the market and are aware of our competitors. Although we have never sold a specific amount of Self-Erector to North America or the United States, we see it as an opportunity to launch a larger product.
Please switch to RT
AD: Similarly, what opportunities do you see for rough terrain cranes?
KH: Again, it’s infrastructure-driven, like road construction, bridge construction, general construction, oil and gas. When we look at rough terrain cranes, they typically come into play in situations where the market for pick-and-carry cranes levels off or rough terrain cranes take over in terms of production capacity. We believe this is a huge opportunity given the current infrastructure boom. For example, if India is trying to become the world’s fourth or fifth largest economy by 2030, that will require huge spending on infrastructure.
AD: Apart from one RT made in India, are all other RT models made in Italy?
KH: All made in Italy as a global design for Europe and North America. The company has begun to enjoy steady growth and success in North America, and we believe that North America will be an important market for Terex’s rough terrain cranes in the long term.
AD: Is there any possibility of restarting manufacturing in the United States?
KH: No, the honest answer is probably not. We have excellent facilities in Cresperano, Italy, where we manufacture rough terrain cranes and are able to offer the products manufactured there to the market.
AD: Terex previously offered Bendini telescoping boom crawler cranes manufactured in Crespellano using RT uppers. Is this something that could be revived?
KH: As part of our product roadmap and development plans, we will be returning our latest telescopic boom crawler crane to our product portfolio. We see it as an opportunity. In terms of lifting capacity, the highest volume spots tend to be accessed first.
AD: What other new products do you have in the pipeline? What’s coming next?
KH: In the traditional tower crane market, known as the top slewing sector, we are updating our luffing range. This includes several new models to fill the gaps needed to compete more effectively in the market. We’re also working on some of our smaller products when it comes to traditional flattops. We are working on introducing some new models, mainly to fill the gaps in our product range.
Overall, our luffing products have a good presence in the market, but we believe there are some gaps in traditional flat tops. We are working to close these gaps with our competitors. Over the next few years, we’ll see a fairly healthy pipeline of new products emerge.
AD: As the memory of Terex Demag fades, does that mean we are looking towards a bright future for Terex Cranes?
KH: Why was it kept? [RTs and towers] Because they all had strong long-term performance in their respective market segments. We will continue to focus on their growth. We will continue to invest in these products and further internationalize them. We’re really excited to see what we can do with these products, especially in a market like India.
Cranes are an integral part of what we do at Terex.