PMV finds out about some of the road-building kit that is helping to pave the way for the Middle East’s future transport infrastructure
Middle Eastern decision makers are investing in transport infrastructure, and in a big way. Whilst initiatives such as the $15.5bn GCC-wide rail network and high-profile metro projects might be garnering the lion’s share of media attention, road construction will be no less important to the overall success of this regional push.
The confirmation of major events, including the UAE’s Expo 2020 and the 2022 FIFA World Cup in Qatar, seem to have succeeded in convincing governments to put their hands in their pockets.
Dubai’s Roads and Transport Authority (RTA), for example, approved a budget of almost $2bn for 2014, more than half of which is being spent on new projects. Qatar’s Public Works Authority, Ashghal, meanwhile, has signed seven roads contracts worth a combined $2.8bn under its local roads development programme.
With similar projects either underway or planned across the GCC and the Levant, contractors will need to invest in road-building equipment capable of coping with the Middle East’s high temperatures, choking dust, and long working hours. To this end, experienced regional dealers such as UAE-based GENAVCO will be indispensable.
“The current demand for road construction equipment is very encouraging,” explained Asif Sayeed Khan, the divisional manager of GENAVCO’s Heavy Equipment Business Unit.
“These levels are reminiscent of those experienced in 2007 and 2008. This sudden surge in demand is the result of the government’s decision to resume various road projects that were previously on hold, and of course, the awarding of fresh contracts,” he told PMV.
During the past year, UAE authorities have invested heavily in infrastructure projects across the country’s northern and western emirates.
“The road construction segment is looking very positive in terms of the coming years, largely thanks to Expo 2020 and the related infrastructure projects planned by the Government of Dubai,” said Khan.
“On the other hand, the Abu Dhabi Economic Vision 2030 involves infrastructure projects spread over the next 16 years. We are very optimistic about growth in demand for road construction equipment during the coming years,” he added.
In respect to the region as a whole, Caterpillar Paving Products’ Massimo Mezzofanti told PMV that the road-building sector still has a way to go before it catches up with pre-crisis levels.
“The demand for road equipment has not seen a dramatic increase in the last few years,” he conceded.
“Between 2010 and 2012, only Saudi Arabia demonstrated consistent growth, with the rest of the region showing lesser demand than during the 2007-to-2009 period.
“2013 was slower, both in the KSA and other Gulf countries, primarily because of government policy concerns and customers consolidating and revaluating their capital investments.
“This year, we expect the overall demand to be similar, or being optimistic, between 2% and 4% higher than in 2013. We also predict that there will be some changes to the product mixes and acquisition channels adopted by local operators,” he explained.
Despite his measured assessment of the road equipment sector’s performance of late, Mezzofanti seems quietly optimistic about prospects during the coming years, especially in Saudi Arabia. However, he also warns that his peers shouldn’t get carried away; fresh products do not automatically lead to increased demand.
“In Saudi Arabia, there has been an almost linear correlation between growth in equipment demand and project announcements during the last three years,” he said.
“We expect this trend to continue over the next two to three years, after which time, there is likely to be a greater degree of asset management and equipment rollover from other projects. The Gulf is now seeing more asset management, redistribution of equipment assets, renewal of fleets, and varied channels of distribution. As such, demand is not linear with project investments, and there is a greater focus on the effective utilisation of existing fleets.
“Not only are there fewer projects than before in the UAE, but customers are limiting their equipment purchases. Countries such as Oman might be experiencing strong demand linked to new project announcements, but overall, the Gulf is still experiencing a lag in terms of road equipment demand,” he added.
Regardless of the exact levels of demand, the road-building kit that is enlisted by regional operators will need to be sufficiently robust to cope with unforgiving operating conditions.
“Customers in the UAE look for reputed and reliable equipment,” explained Khan.
“Moreover, it must be backed by dependable after-sales support from the relevant dealers and manufacturers. Road construction is a critical job. If a contractor does not meet the compaction and rideability guidelines set by authorities, they are asked to remove the asphalt and lay it afresh. Contractors are staking their credibility, money, and time; they have to opt for the most reliable equipment to keep their track records intact,” he said.
With the reputation of end users on the line, dealers must ensure that the manufacturers with whom they choose to partner are up to the job.
Fortunately for Khan and his colleagues, GENAVCO enjoys a long standing relationship with Wirtgen Group, the manufacturer responsible for brands such as Vögele and Hamm. Moreover, the company seems perfectly willing to strengthen its product portfolio when the right brand comes along.
In 2013, for example, following a thorough study of product quality and features, GENAVCO signed an agency agreement with asphalt plant manufacturer, SIGMA.
“The most popular pieces of road equipment offered by GENAVCO are the Vögele S1800 paver, the Wirtgen W200 road-milling machine, and the Hamm GRW18 pneumatic tyre roller,” Khan told PMV.
As a manufacturer, Caterpillar is also acutely aware of the need to produce high-quality machinery. In addition, Mezzofanti observes that fleet operators in the Middle East have become more fiscally aware in the wake of the global economic downturn.
“Obviously, customers have always wanted to get the most out of their machines, but over the last few years, they have also become much more conscious of project life-cycle costs,” he explained.
“The need to minimise downtime has become a driving force in the road equipment sector, as contractors look to reduce the money and time being spent on maintenance. Caterpillar has also been working to deliver machines that are simple to operate and maintain,” added Mezzofanti.
To this end, Caterpillar has released a raft of road-building products during the last 12 months, including its B-Series range of vibratory compactors. The manufacturer has also introduced a number of rollers to the Middle Eastern market, including the eight-wheeled CW34 pneumatic model.
However, Mezzofanti and his colleagues are by no means finished. Caterpillar has plans to further strengthen its range of road-building equipment during the coming 12 months.
“We have some exciting product releases coming up in the next year to complement our recent introductions,” revealed Mezzofanti.
“These products are going to play a significant role in helping Caterpillar to consolidate its market position. More importantly, these user-friendly machines will offer reduced maintenance and greater operational safety.
We are also placing a lot of effort into the training of our customers’ crews. Our dealers’ demonstrators and technicians are able to provide expert advice, not only in terms of servicing, but also with regards machine application,” he concluded.