The Crane Group of Cos was set up by Thongchai Praerangsi in 1990 to provide rental services of cranes, forklifts and other construction machinery for lifting, assembling and installing large and heavy objects as well as machinery sales under The Crane Services Co Ltd (TCS). As the industry continued to expand, Mr Thongchai set up The Crane Laem Chabang Co Ltd (TCL), The Crane Rayong Co Ltd (TCR) and The Crane Heavy Lift Co Ltd (TCH). In 1997, He set up Chu Kai Co Ltd to import used cranes and parts for sale and provide repair services. The group was restructured in 2004, when Crane held a 99.99% stake each in TCL, TCR and TCH. It also bought 99.99% of shares in TCS in 2006. Since the restructuring, Crane mainly sells equipment and provides repair services for cranes, while its subsidiaries only provide rental services. Chamnan Ngampojanavong, chief financial officer of Chu Kai Plc, discusses the company’s strategy and outlook.

 

BUSINESS:
What is Crane’s business model?

Our group of companies has been in business since 1990, providing rentals of cranes, forklifts and other construction machinery for lifting, assembling and installing large and heavy objects as well as machinery sales. We have four subsidiaries: The Crane Services Co Ltd, The Crane Laem Chabang Co Ltd, The Crane Rayong Co Ltd and The Crane Heavy Lift Co Ltd. Crane mainly imports used cranes and parts from abroad for domestic sale and provides repair services, while its subsidiaries only rent out equipment. Furthermore, Crane is the sole distributor of the No.1 Chinese crane brand Zoomlion, which is half the price of its German and Japanese counterparts. This gives our customers a choice of using new cranes at affordable prices.

How many types of cranes do you have?

Cranes can be divided into three main types _ rough-terrain cranes; truck and all-terrain cranes; and crawler cranes. Rough-terrain cranes are the smallest. They’re allowed onto highways but designed for pick-and-carry operations and off-road or rough terrain applications. They cannot be driven far along a road, so they need other vehicles to transport them. Truck and all-terrain cranes have two parts _ the carrier and the lifting component. They are allowed to run on highways legally with yellow licence plates, eliminating the need for special equipment to transport them. Crawler cranes are very heavy and cannot easily be moved. Typically, a large crawler must be disassembled and moved by some trailer, truck or ship.

How does Crane rent out the equipment?

We rent out our cranes on both a daily and a monthly basis, but mostly by project for 3-6 months on average. We charge customers by eight-hour shift and provide them with two staff _ a crane operator and an assistant _ per crane per shift. Prices vary by type and lifting capacity of cranes and the length of a project.

How many cranes do you have today?

More than 100 cranes, 60% are rough-terrain cranes, followed by truck cranes (25%) and crawler cranes (15%).

Who are Crane’s customers? What industries are they in?

For sale, Crane has two types of customers. In the first group are those who buy and use cranes in their own businesses such as seaports, property developers, construction contractors, prefab manufacturers and petrochemical plants. The other group comprises customers who buy and rent them out. They’re in the same business as Crane. For rental, Crane’s target customers are large projects such as petrochemical plants, refinery plants and power plants. The company gets the projects directly from the project owners or as subcontractors.

INDUSTRY:
What makes Crane different from its competitors?

The company values the needs and understands the expectations of our customers. We are able to provide not only immediate service to customers with highly experienced personnel but also integrated lifting consulting services using computer-aided design to ensure minimum interference with daily operations and load-safety calculation. Moreover, our group’s network is strategically located in main business hubs and industrial areas to provide a fast, reliable and affordable response to any lifting needs.

How many other competitors are there in the industry?

For small companies that provide mainly small cranes, we don’t think of them as competitors. In fact, they could even be our customers. Crane competes in the large-crane market, which has only two or three competitors whom we often meet when bidding for a project. Each player has its own customers or domain, as customers don’t want to change their service provider once a relationship has been established.

However, there is an exception. If one of the companies has an insufficient inventory of cranes, then perhaps we could take advantage of this and expand our market share.

MISCELLANEOUS:
What are the biggest risks facing your business today?

The critical factors are machinery and personnel. As our business is capital-intensive, we have to maintain our assets in good condition. We’re lucky that we are a one-stop service provider, as we have our own maintenance team and well-equipped workshop to take care of our assets and also provide this kind of service to our customers. For personnel, we can retain our team and invest more in people to expand the business.

How have the floods affected your business?

We’re lucky we’re mostly in the eastern area, as we were not directly affected by the severe flooding. But one of our branches, The Crane Heavy Lift, is in Rangsit’s Talad Thai area, and they were affected. Thankfully, our office was not flooded, but our work was temporarily delayed, as we could not get our heavy machinery to work that was situated in the East and the South. A few customers postponed payments, but all in all we’re thankful to have escaped the crisis relatively unscathed.

Where do you see Crane five years from now?

We think this industry is still in its sunrise period and that more players will enter the market, as there is still very high demand. There are many opportunities in Thailand due to the large number of mega-projects as well as power plants, wind-turbine power plants and the like. We plan to expand our crane portfolio to increase lifting capacities beyond our existing 600-800 tonnes.

With higher lifting capacities, we believe we can penetrate the market further. We’ve also been expanding our rental business to foreign projects in Burma, Laos and Cambodia, where there is high demand for cranes, equipment and, most importantly, an experienced company to help build their infrastructure.