7 mins
NEWS ROUND UP
TOP HIGHLIGHTS
> UKRAINE Korea Airports Corporation (KAC) and Hyundai Engineering & Construction (Hyundai E&C) have signed a US$983 million memorandum of understanding with Ukraine’s Boryspil International Airport Corporation for the reconstruction and expansion of the terminal and runway at Kyiv International Airport.
The three-way agreement is said to involve sharing business information and exploring joint projects to facilitate the restoration of the Boryspil International Airport, Ukraine’s largest airport.
> BRAZIL Develon, formerly known as Doosan Construction Equipment, has opened a new Parts Distribution Centre (PDC) for the Brazilian market at Jundiaí, close to the city of São Paulo.
The new facility in Jundiaí is the first in South America for the OEM and the 11th worldwide as Develon looks to continue its Global PDC Footprint expansion strategy. Young-cheul Cho, CEO of HD Hyundai Infracore (HDI), the parent company of Develon, said that there were “growing opportunities” in Brazil.
> GERMANY Germany’s government will subsidise gas power plants that can switch to run on hydrogen at a cost of approximately €16 billion (US$17 billion), it has announced.
The stimulus aims to speed up the transition to low-carbon energy, providing a supplement to intermittent renewable energy sources. Germany’s energy ministry said a tender process for the conversion of four gas plants with total capacity of up to ten gigawatts (GW) would take place soon. The state support will include capital and operating subsidies.
> BANGLADESH The Bengali government wants to build five bridges with the help of New Development Bank (NDB) loans as it awaits its first financing agreement from the group since joining membership in 2021. It is reported that five bridge projects – totalling Bangladesh Tk17,500 crore (US$8.9 billion) – would be serviced by the financing agreements.
The two largest projects include a bridge to connect the mainland near Barishal and Bhola district, and another to link Paturia with Daulatdia over the Padma River. At present, a ferry provides transportation services over this 3.3km section of the Padma River.
Visit www.constructionbriefing.comfor your daily fix of all construction related news
IN CASE YOU MISSED IT
A three-year research project looking at reducing the carbon footprint of specialist foundation equipment by using hydrogen fuel cells has been launched.
Over the next three years, the project partners will work together to develop a concept for operating specialist foundation equipment with zero CO2 emissions. The plan is to integrate a drive system comprising a hydrogen fuel cell, along with all necessary peripheral components, into a special foundation machine from Bauer Maschinen GmbH.
The fuel cell system, along with other required components such as a H2 storage unit and cooling unit, are designed as a plug-in module for universal use.
At the end of the project, the plugin module will be installed on a Bauer machine and tested in practical applications.
Bauer has previously produced the cable-bound eBG 33 and battery-powered eBG 33 H all electric and says the use of hydrogen technology in the form of a fuel cell is “a logical enhancement.”
A hydrogen-powered machine can be used where a cable connection is impossible or specific services are required that cannot be provided to the necessary extent using only batteries.
The consortium partners are Bauer Maschinen GmbH along with the Professorship for Fluid Systems Technology and the Chair for Fluid Mechanics at the Friedrich-Alexander University of Erlangen-Nuremberg.
In a previous interview with International Construction, CEO of Bauer Maschinen, Dr. Ruediger Kaub, said, "The industry will take time to really step in more and more into electrification.
"But it will come, whether it is battery, direct electric drive, fuel cell powered by hydrogen. We will see all sorts of combinations."
FINANCIAL RESULTS
WHAT HAPPENED?
OEMs, contractors and materials producers have all been releasing their fourth quarter 2023 and full year financial results.
Most firms enjoyed a positive 2023 regarding sales, although for many there was a decline in the fourth quarter of the year compared to the same period the year before as experts warn of a more challenging year for the sector in 2024. For instance, Caterpillar, the world’s largest construction equipment manufacturer, announced that sales for its Construction Industries in Q4 2023 were US$6.519 billion, a decrease of US$326 million (5%) compared with US$6.845 billion in Q4 2022. This trend was also reported by Volvo CE – the OEM saw an increase in sales for the full year (from US$9.57 billion in 2022 to US$10.03 billion in 2023) but saw sales drop by 4% in Q4.
French construction group Vinci has reported a 12% increase in revenue to US$74.2 billion in 2023, while infrastructure consulting firm Aecom’s financial results for the first fiscal quarter of 2024 exceeded its expectations as revenue grew 15% year on year to US$3.9 billion.
Continuing the theme is Terex AWP, which includes Genie Terex and Utilities, reporting a small drop in fourth quarter sales, but a 17% increase across the full year.
WHAT IT MEANS
Despite a concoction of challenging circumstances, the construction industry has proven to be remarkably robust, with sales remaining at high levels for a number of years. This may be coming to an end in 2024, with a number of companies warning of tougher market conditions this year.
“The progress and milestones we have made in 2023 will prepare us for the challenges of 2024. There is no doubt our industry is coming into the new year faced with a weaker market landscape,” said Melker Jernberg, President of Volvo CE.
This sentiment was echoed by Terex AWP CEO, Simon Meester, who said, “We do anticipate some headwinds from European markets as well as lingering, yet slowly improving supply chain disruptions.”
As well as sales in Europe becoming more challenging, it is expected that the Chinese market will remain difficult. Sales in China were down last year with a major problem being the turbulence in the real estate sector, as evidenced by Evergrande being placed into administration and heading for liquidation. In addition, the equipment market is being impacted by economic headwinds of stalled growth, falling exports, failing consumer confidence, high local government debt and high unemployment among the young.
Caterpillar expects sales to remain similar in 2024 compared to 2023
WHAT’S NEXT?
China is not expected to see a real recovery until the period of the 15th Five Year Plan (2026-2030), primarily as a result of increased sales of compact equipment and the returning replacement demand. The market may return to sales of 270,000-300,000 construction units per year, but even that volume is lower than previous years.
North America is expected to remain a strong market, with non-residential construction holding at similar demand levels due to government-related infrastructure investments. Sales may decline in 2024 for the sector, but any drop will likely be small. Caterpillar’s CFO, Andrew Bonfield, told analysts that the OEM anticipates that sales of equipment to end users within the Construction Industries division would be “roughly similar” to the strong year the OEM enjoyed in 2023. “We also anticipate our services initiatives to benefit the segment in 2024,” he added.
PHOTO: ADOBE STOCK
US SKILLS SHORTAGE
The Associated Builders and Contractors (ABC) trade association has released data suggesting the American construction sector will need to hire 501,000 workers to meet demand. There is a huge gap in labour and demand in the US construction industry, and an ‘allhands-on-deck’ approach is needed to combat the deficit, ABC president and CEO Michael Bellaman said.
“ABC estimates that the US construction industry needs to attract about a half million new workers in 2024 to balance supply and demand,” said Bellaman. “Not addressing the shortage through an all-of-the-above approach to workforce development will slow improvements to our shared built environment, worker productivity, living standards and the places where we heal, learn, play, work and gather.”
MAGLEV TRAIN FOR ITALY?
Italian contractor Webuild and aerospace company Leonardo have won a €4 million (US$4.4 million) contract to study the feasibility of building a high-speed magnetic levitation train.
The project, commissioned by Concessioni Autostradali Venete, represents a preliminary test for building sections of a maglev ‘Hyper Transfer’ line in Veneto. It aims to set the foundations for the world’s first operating prototype at a cost of around €800 million (US$870.6 million).
Webuild leads the joint venture with a 96.22% stake, and partner Leonardo with the remaining 3.78%.
LOW CARBON CEMENT
A Chinese body representing more than 50% of the world’s cement production has signed an international agreement to collaborate on sustainability and the development of lowcarbon cement.
The China Cement Association has joined forces with the Global Cement and Concrete Association, whose members account for 80% of cement production capacity outside of China, for the pledge.
The pledge includes an agreement to work together on sustainability, and the low-carbon development of the cement and concrete industry. Concrete accounts for around 7% of global CO2 emissions.
DATA CENTRE INVESTMENT
Amazon Web Services has revealed plans to invest US$10 billion in the construction of two data centre complexes in Mississippi, US. The two complexes will be built in two Madison County industrial parks.
The new construction extends Amazon’s presence in the state, where it has already invested US$2.3 billion since 2010 in the construction of five fulfilment and sorting centres, four delivery stations, five solar farms, and Mississippi’s first utility-scale wind farm. The investment is the single largest capital investment in Mississippi’s history, according to the company. The new data centres are expected to create around 1,000 jobs.