Construction Week recently reported that Bobcat is ‘considering’ adding backhoe loaders and wheel loaders to its product portfolio. The compact machinery manufacturer – most famous for its skid-steer and compact track loaders – revealed that although no plans have been finalised, it is looking into the possibility of adding new lines.
Commenting on the prospect, Jose Cuadrado, vice president of the Compact Business Unit at Bobcat’s parent company Doosan Infracore, says: “In the compact world, there are six or seven product lines. Any manufacturer that tells you it’s not looking at something they don’t have is lying. Everybody is looking at what they don’t have.
“[Bobcat] has [skid-steer loaders], mini-excavators, and compact track loaders; we don’t have backhoe loaders and we don’t have wheel loaders. Yes, of course we are considering [these lines].
“We are nowhere near telling you when, but yes – we are considering. We’ve learned from our past experiences and we don’t want to [overreach]. If we go to market with new lines, we will do it properly,” he adds.
Despite his reluctance to go into specifics with regards the introduction timeframe, Cuadrado’s admission that Bobcat is looking into expanding its product portfolio mirrors the current market trajectory of compact machinery – especially in the GCC.
“There are some [established] product lines in the Middle East that are growing [gradually] and there are other emerging product lines that are growing more rapidly,” he explains. “The mini-excavator product line, for example, is still an emerging product in this region. The number of units being sold in the Middle East is limited. However, growth is very high; double digits for the past three-to-four years.”
With regards compact equipment, Cuadrado predicts that the Middle East will follow a similar path to more mature territories. “If you look at how the mini-excavator has become popular in other global markets [like Europe and North America], it has typically followed the popularity of the backhoe loader,” he says.
“The Middle East is a very large backhoe loader market. When it comes to productivity and efficiency, a mini-excavator can do the job faster than the backhoe. It’s less versatile of course, but it does the job of excavation faster. With this in mind, I think that the mini-excavator will undergo significant growth in the Middle East during the coming years. This is already happening,” Cuadrado adds.
Manhal Al-Chalabi, Middle East and North Africa (MENA) manager for German compact machinery manufacturer Wacker Neuson, agrees that regional demand for compact excavators is on the rise, but adds that growth is “gradual and market specific”. He notes that the region is still developing primary infrastructure in wide-open spaces, as opposed to the confined urban worksites common in Europe and North America.
Moreover, Al-Chalabi points out that in the Gulf, there are no government regulations putting pressure on contractors to downsize their machinery. A lack of awareness over the advantages offered by compact excavators, he says, is currently prejudicing end users against change.
However, Cuadrado’s counterpart Gaby Rhayem, Doosan Infracore’s MENA director, argues that signs of maturity can already be seen in the Middle East. “[There is] increasing demand for compact excavators in the region,” he notes.
“It is part of a mature construction market, more dedicated to cities and confined urban spaces where big machines cannot work.
“Many authorities are asking contractors to use mini-excavators in small streets that heavy excavators cannot access, or where they would risk damaging infrastructure on the way,” Rhayem continues, pointing out that smaller machines are better suited to the installation of piping and fibre optics in already-built-up environments, not to mention landscaping projects in locales with limited road access.
Rhayem cites villa swimming pools as a prime example of projects that require compact excavators, whilst noting that cities are also pushing for the type of green landscaping that requires the delicate touch of smaller machines.
Manufacturers are in broad agreement over the direction in which the GCC’s compact machinery market is headed, especially when it comes to long-term potential. Taking the broad view, Dave Wood, product application specialist at Caterpillar, tells Construction Week: “The use of compact excavators continues to grow worldwide as urban job sites become more restricted.
“In addition, the excavating performance of mini-excavators has improved considerably over the years, and operators can now be more productive than they were a few years ago. In the Middle East, we see more mini-excavators as customers gain more knowledge of their capabilities and their ease of use.”
The benefits of compact or mini-excavators’ ease of use only grows in markets where there is “a lack of skilled operators” – which, despite the ‘bigger-is-better’ mindset of many GCC end users, is an issue that could favour the segment in the future. Wood adds: “Time-constrained projects such as laying cables and services – as well as highway maintenance – all have an impact on the increased acceptance of mini-excavators.”
Pressed on the subject of market conflict between compact excavators and other equipment, Wacker Neuson’s Al-Chalabi admits: “Customers tend to use more backhoes as they have been available in the market for years, and [they] manage to get around the digging work because of the availability of space and the lack of regulations from government.”
He goes on to note that product differentiation represents “a big challenge” as end users remain primarily concerned with the purchase price. Nevertheless, Al-Chalabi says that the cost of ownership will become increasingly important as the region moves towards deregulation of fuel prices. “It will become important to have a fuel-efficient machine – something that is not appreciated at this moment in the region,” he explains.
Doosan’s Rhayem, meanwhile, warns that compact excavators “can cross with backhoe loader applications where the backhoe loader is being applied to digging”. Conversely, skid-steer and compact track loaders, he notes, do not clash with backhoes; they are complementary.
Caterpillar’s Wood confirms: “The compact excavator complements the use of equipment like compact loaders, skid steers, and telescopic handlers. In many global markets, compact excavators are used together with compact loaders or small articulated dump trucks.”
Wood says that having a compact loader working alongside a compact excavator for bulk material handling – whilst an excavator works on the main task – can be very productive. Caterpillar mini-excavators, he continues, are available with dozer blades, which include float functionality for simplified and rapid ground levelling.
On the subject of raising awareness, Doosan’s Rhayem opines: “This business doesn’t require any additional setup or investment on top of what the dealers are already doing, but there needs to be more effort to explain the concept and the applications.”
Wacker Neuson’s Al-Chalabi, however, warns that there exists a need for suppliers to ensure the local availability of machines and parts, particularly given their typical applications.
“It’s necessary to have a very good-quality and reliable machine to reduce the risk associated with parts availability,” he explains. “This is a very critical aspect for product and brand success in this region.”
Elaborating on this point, Caterpillar’s Wood points out that many of the projects that could benefit from the addition compact excavators are constrained by time; suppliers that lack the means to provide equipment on demand risk missing – or even failing – customers.
Looking forward, Al-Chalabi says: “We anticipate good potential for future demand once the cities have fully developed and the market has matured. Currently, demand is more specific to certain projects where they have to work in very tight spaces.”
Doosan’s Rhayem adds that whilst the number of units being sold in the Middle East may be relatively small at present, compact excavators represent an important growth segment within the market due to their diverse selection of compatible attachments.
In summary, Caterpillar’s Wood says: “The compact excavator is a versatile tool. It is traditionally thought of for use in areas where other machinery might not be able to gain access – and this is where these machines excel.”
But factors such as ease of transport, and the ability to handle tools other than buckets, also make these machines valuable additions for work sites away from built-up areas, he continues.
As Doosan’s Rhayem concludes: “It is a market that will grow significantly in the coming years.”
