Machinery: Backhoes buck the trend

The backhoe loader is providing steady volumes even in the current scenario of stagnating sales, major manufacturers say

It’s no secret that 2016 is not the best year for construction equipment makers and sellers in the region. The all-terrain cranes, heavy excavators, wheel loaders, motor graders, pavers, dumpers, et al are not having their fastest moving year in recent memory. However, one class of equipment that is having somewhat of a bull run in a bearish market is the backhoe loader.

As Gaby Rhayem, Bobcat’s regional director for the Middle East and Africa, puts it: “The backhoe today is a very, very good and important business in the region. Even though there is a slowdown, this category is still selling well. For Bobcat, it’s a very promising field and we believe this product will be developed a lot more in the future.”

And he should know. Back in May, Bobcat, already the prime brand to reckon with in the region’s compact machinery segment and a by-word for skid-steer loaders, entered the segment for the first time ever, choosing Dubai as the global launchpad for its backhoes. The timing was just right for growth, Rhayem says, and he has not been disappointed.

“Based on recent statistics, we estimate the regional backhoe market today to be around 3,500 units, which is quite big,” Rhayem says. “In fact, around 3,458 backhoe units were sold in the region last year. This year is turning out to be another good one for the backhoe, with around 1300 units sold by mid-year. Compare that with skid-steer loaders – the most popular machine in the region – which sold around 2,000 units in the same time period and you see it’s quite close. It is actually the second most popular among compact machines with a huge lead of more than 700 units over the next most popular segment, the telescopic equipment.”

A late entrant it may be, but Bobcat is aiming to occupy the third spot in backhoe sales in the region by the end of the year. “We are confident of achieving that position based on the fact that our production is booked all the way until January,” Rhayem explains. “My bookings are full and I already know that if I ship more than 200 units in a region with a total market of 1,300, it gives me around an 8% market share. That’s not bad at all for our first year of selling backhoes.”

Bobcat may be a recent addition, but first off the block in the backhoe’s history was JCB, the inventor of the machine. As they won’t hesitate to remind you, almost 50% of all backhoes sold globally are JCB. The manufacturer has five main models in the market, from the 1CX up to the supersize 5CX, but the 3CX has been its biggest volume seller around the region, a representative from the company told CMME earlier.

JCB finds Saudi Arabia and the UAE to be its two largest markets for backhoes in the region. While in the former, the more basic variant, with canopy, two-wheel drive or 4wd, front shovel and standard backhoe is the bigger seller, in the UAE customers opt for the fuller spec 3CX, with cab and AC, 4wd, the six-in-one front shovel with flip over forks and JCB’s Extradig extending dipper.

Tough competitor

Another tough competitor in the market is Caterpillar. While globally JCB is the top dog in the backhoe market, Caterpillar has entrenched market position in the GCC through the strength of its dealers. Caterpillar recently updated its line of backhoe models to the F-Series, from the 7.5t operating weight 422F up to the 9.7t 444F.

“The type of the projects and applications running in our territory, such as building construction and general construction, play a major role in increasing the demand for backhoe loaders. The durability and versatility of Cat backhoe loaders enable them to be the most suitable and compatible machines for different applications meeting different project requirements and demands,” says a spokesperson for Mohamed Abdulrahman Al-Bahar, the Caterpillar representative in the region.

“In addition to the new uses and applications for the machine, the affordability and versatility of the machine are the attributes that meet the needs of various classes of customers – small, medium, or large, making it more profitable and cost-effective to any customer.”

With five models in the F-Series, each can be ordered with one of two engine options. The smallest 422F is offered with a naturally aspirated diesel engine that puts out 56.5 kW gross power, or a direct injection turbo (DIT) engine outputting 68.5kW gross, with air conditioning only available with the DIT engine.

In the larger models in the range, the DIT engine option becomes the standard, with a C4.4 turbocharged after-cooled engine as the option. In terms of the model series update, all four machines benefit from the main improvements, including an updated high ambient temperature cooling pack. Caterpillar says the system utilises separate coolers for the engine coolant, transmission and hydraulic oils.

“Attributes like performance, features and on-going research for product enhancement, along with the competitive advantage Cat machines have in terms of parts availability sets them apart from the competition,” says the Al-Bahar spokesperson. “In addition to these, Cat backhoe loaders come with a range of support and services, like customer support agreements (CSA), extended warranty, fleet management solutions, and equipment protection plan – all of which add to the strong market history we have, giving us the extra edge against our competitors.”

That history stretches a long way for the Al-Bahar-Caterpillar combine, as Al-Bahar says: “Caterpillar
introduced the first backhoe loader in the early 80s. The ability of Caterpillar to meet various demands in different markets and for different applications by providing a wide variety of products has been the corner stone of our partnership.

“Al-Bahar has a very strong distributional channel in the UAE, Oman, Kuwait, Bahrain and Qatar, as well as very quick machine repair and service abilities. The continuous efforts from Caterpillar to ensure top-notch technology, innovation, and optimal machine performance, in addition to the support year after year, have been the biggest contributors towards achieving a perpetual success for CAT backhoe loaders over the past years.”

Case Construction Equipment has a number of models in the market, including their latest down-specced 570T, but its most important machines for the region are the 580T and 695T. Franco Invernizzi, senior business director, Middle East and Africa, told CMME earlier that while the backhoe is in demand in all construction segments, they see particular demand coming from smaller and medium contractors. “However, as the rental segment is expected to grow across the region, there will be considerable demand from the rental companies, which are by definition fleet owners.”

Speaking about the 570T Invernizzi says that the machine is able to play an “effective and main role” on construction sites, especially road projects, due to its high productivity, economical fuel consumption and durability, as well as its being equipped with ergonomic features which contribute to an improved working environment for the operator. “Customers looking for a simple, reliable and cost-effective tool will find that this machine matches their needs to the maximum.”

Key features of the Case T-Series range include an overall lower height, achieved by the use of overlapping cylinders, so that the backhoe needs a lower height clearance. The units are built with CNH/Fiat tier 3 engines, with Case CE claiming a 10% power advantage over competitors. Design strengths include robust design of the backhoe boom and dipperstick, which contributes heavily to productivity and the safety of operators.

Jostling for position

Chinese maker SDLG is another player in the region’s backhoe market. Owned by Volvo CE and represented in the region by Volvo dealer FAMCO, one of the largest machinery suppliers in the GCC, SDLG is keen to take the fight to the market leaders.

“In the past few years compact machines have made up around half of the construction equipment market, and the backhoe occupies a major portion of the compact range,” says Bassem Albermawy, regional product manager for construction equipment at FAMCO.

“With SDLG backhoes we are aiming to boost our market share by leveraging on proven technology, robustness and cost-effectiveness of the company’s B877 model, backed-up with FAMCO’s reliable aftermarket services.

“The B877 delivers a power output of 93.9hp, digging force of 56kN and breakout force of 60kN, assuring powerful operation. Its cost-effective operation makes us believe that the B877 is the right match for most of our customers’ needs.”

But what does the future hold for this versatile machine? Almost all market players are quietly confident that the popularity of the backhoe in the region’s market will continue unabated and the equipment class will remain a growth story in the years ahead, owing to its various attributes, not the least of which is versatility.

“Our projections for SDLG backhoe in the next four years is to be the most preferred, cost-effective backhoe loader in the territories we cover, where we are confident that the B877 can efficiently meet customers’ demands for higher productivity and least downtime,” says Albermawy.

“While the backhoe loader Industry has been witnessing a flat growth over the past two years, we have succeeded in achieving a sales growth over the same period,” says Al-Bahar’s spokesperson.

“The construction industry forecast until 2020 seems to have promise for upcoming and on-going projects, and we are expecting a steady and progressive demand increase, year after year for the backhoe industry.”

Agreeing with this view, Rhayem adds: “I do not see demand for backhoes in the region tapering off in the future. Be it smaller, single-unit owners or fleet operators, the backhoe’s versatile design makes it a favourite for all. When the going is good, all machines are in demand, including the backhoe. But when it is not so good, the backhoe is still in demand because it can do the work of several machines in a single package. We have a winner in this machine, which is going to rule the roost in the region for the foreseeable future.”

Wheels matter

At the larger end of the backhoe range, models are normally equipped with equal-size front and rear tyres.

Caterpillar’s product specialist Adrian Forrester, explains the benefit: “One of the main advantages of any backhoe loader with four equal-size wheels is that the ground pressure of the machine is reduced. This increases the floatation and mobility of the machine over soft ground conditions, enabling the machine to gain access to areas that otherwise would be more difficult.

“High traction generated from the larger front wheel also helps to improve loader performance, increasing the machine’s performance when using the loader on duties such as site stripping or truck loading.”

However, regardless of the size of the wheels, a diff lock also improves machine performance on soft ground. “Maintaining traction is important if the machine is working in soft ground conditions, and all Cat backhoe loaders are fitted with a differential lock as standard,” he says.

“If traction is lost at any time, the operator can easily engage the differential lock so that the drive is equally distributed to both wheels, enabling the machine to be driven onto firmer ground.”

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