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Product gains headway in Russia

31st May 2013

  

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South African cranes, hoists and components manufacturer Condra’s Bulgarian subsidiary reports that it has secured orders from Russia for a further three overhead cranes, expanding the footprint created by last year’s initial installation in that country and cementing the partnership between Russian agent Vniiptmash and Condra’s two factories, in Pazardjik, in Southern Bulgaria, and Johannesburg.

The orders, taken in the first quarter of this year, are valued at about R20-million and are seen by industry observers as a vindication of Condra’s carefully considered strategy to maximise the benefit of low Eastern European labour costs by combining that advantage with South African design skills in modular manufacturing techniques, the company notes.

These orders follow many years of careful research into the Russian crane market, and initial difficulty in competing against other Bulgarian firms for the supply of standard cranes and hoists.

Condra identified the potential of the Russian crane market in 2000, but research revealed several obstacles to entry, which included widespread Russian scepticism of all capital equipment of African manufac- ture and an ingrained confidence in traditional supply from Poland and Bulgaria, the designated suppliers of lifting equipment to the former Union of Soviet Socialist Republics.

“When Bulgaria entered the European Economic Community in 2007, legislated acceptance of foreign subsidiary companies into that country paved the way for Condra to establish a base with the right national address. This, combined with German origins and connections, provided the company with the marketing platform necessary to make inroads into Russia,” Condra explains.

Condra Bulgaria was opened as a subsidiary in 2008, recruiting skilled staff from the pool of artisans that was fed by a Bulgarian crane industry much troubled after the opening up of the region to global competition.

A year of unsuccessful quoting on various projects followed, owing to uncompetitive South African labour costs and Russian scepticism.

Condra Bulgaria director Stefan Babatchev explains that labour costs in Russia are one-fifth of those in Germany and about half of those in South Africa.

“To overcome the disadvantage of competing with standard hoists of Bulgarian manufacture, we decided to focus on special designs and high-lift hoists, where Condra has wide experience and advanced design and cost containment skills,” Babatchev says.

“Whereas, for most other companies, this type of machine would fall into the cate- gory of a special project, Condra’s high-lift experience renders design and manufacture almost completely straightforward. In South Africa, Condra is difficult to beat on price in these segments, and we decided to carry this advantage through to the Russian market,” he adds.

The breakthrough came with an order from the Varvarinskoye gold mine, in Kazakhstan, where the main contractor for the mine extension, South Africa-based MDM Engineering, was already familiar with the Condra product and ordered it as part of the contract.

This installation allowed prospective Russian customers to visit a working installation and personally inspect the cranes, explains Babatchev.

“When they saw the cranes at Varvarinskoye, the Russians readily accepted the open drums and open brakes of our design,” he adds.

“Our participation in the 2011 Crane Expo also helped to impress upon the market Condra’s technical aspects, such as the simple gearbox construction facilitating access for maintenance, the direct drives and the unique design of short headroom and compact hoists.

“However, the challenge was to overcome Russian suspicion that the cranes are under-designed. On the first order for a 70 t crane in September last year, which was a complex machine with high travelling speeds, we exchanged calculations to prove engineering effectiveness, after which the Russians were satisfied.”

Condra’s next step was to appoint a Russian agent just before year-end, bringing it closer to its target customers. This agent is Vniiptmash, a company with manufacturing facilities and closely connected to Uralmash Machine-Building Corporation, a leading local producer of heavy-duty Class 4 cranes.

The culmination of these actions has been the orders of three complete high-lift overhead cranes taken in this year’s first quarter: one 90/20-tonner for despatch in June, and two identical 100/20/5-tonners for despatch in August.

Orders have also been received for the components for two 10 t cranes and a 15 t crane, all of which comprise end-carriages and high-lift crabs to be manufactured by Condra South Africa, and girders and electrics to be supplied by Vniiptmash.

“The primary hoists of these cranes are special, with high lifts of between 23 m and 30 m that require large drums and multiple rope falls,” states Babatchev.

He adds that Condra will continue to penetrate the segment comprising standard Class 2 and Class 3 workshop cranes, based on the product’s robust design and rugged reliability, both of which are better suited to Russian conditions than equivalents from Western Europe.

“Condra will do well in Russia,” continued Babatchev. “We are going to have to expand production in South Africa, and I think we will find it necessary to improve our manufacturing capability in Bulgaria to eliminate the communication and time difficulties that come with liaising between the two countries.”

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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