Expert opinions, TECHNOLOGY

Construction equipment market: New and used equipment as two parts of a whole

The events of 2022 did not spare the construction equipment market: its composition has changed, and construction companies are thinking of ways to cut costs without compromising quality. Therefore, there are benefits of buying used equipment.

Ramil Sitdikov / RIA Novosti

The markets of new and used construction equipment, being inextricably linked, have been growing over the past few years. As a rule, most construction companies utilize both new and used equipment, especially when it comes to formwork systems: any of it becomes “used” after the first batch of concrete is poured.

At the same time, there is a trend for import substitution and many solutions are localized. But it is important to understand that not everything can be localized, and some foreign-developed solutions are replaced by similar, but not identical analogs. There are unique products that cannot be replaced at all, but there are not too many of them on the market, as it has mostly simpler, universal and accessible products. In this regard, the Russian construction market differs from the Western one, which has bigger demand for niche products.

However, foreign-made used formwork systems are in demand in Russia. The demand is stable because such systems speed up the construction process and are cheaper than the new ones. It is especially relevant when there is a short deadline and given that the rate of construction in Russia are high in general, used equipment comes in very useful. Especially this concerns high-tech systems, which allow for significantly speeding up the construction – say, to build several stories per month instead of just one.

All work, if we are speaking about complex multifunctional systems, is covered by the manufacturer. For instance, we purchase the equipment, restore it, making it as good as new, and again lease it out or sell – all this helps our clients to significantly save on equipment without compromising quality. In some cases, the same formwork system is used for 15-20 years and longer.

Of course, such longevity can only be achieved when the company has skilled teams and trusts its employees. This trend is becoming more popular since the culture of construction is being developed and people learn to work with complex systems.

Nevertheless, the market currently mostly offers simple systems: this regards both leasing and purchasing of new and used equipment. There is also a market that has the so-called stay-in-place formwork, or “beams and plywood.” But the sector is gradually becoming more civilized by transitioning to system products and adopting innovations. But one should bear in mind that the construction market in conservative by nature, so it changes more slowly than other sectors.

Equipment leasing helps to make the market more civilized. This practice is quite popular due to its flexibility: a company leases equipment it needs at the moment and returns it when the project is finished. If there is another project that requires different equipment, another system is leased. Ultimately, leasing is the opportunity to not spend money on storing and repairing instruments that are not in use at the moment.

But when there is a question whether to buy new or used equipment when creating your own fleet, the complexity of the equipment is a key criterion. As a rule, specific systems are better to be purchased new. Another important issue is the term of construction. Estimates are approximate, but our experience shows that if a construction is going to last less than 8 months, one can handle it with leased equipment, and if it exceeds 8 months, it makes sense to purchase new or used equipment. Also, if it is necessary to save money or you are engaged in the construction of a non-standard building and the equipment will not be used after the project is completed, in this case it would be viable to lease the equipment for a short-term project and purchase used systems for the long-term one, after which it can be resold for up to 40% of its initial price.

In conclusion, I say that the market will keep growing in the foreseeable future. Some hardships on the market of new equipment, for instance, increased delivery terms, will be partially compensated by offers of used equipment. Therefore, there is no reason to expect any serious deficit on the market at the moment.

By Dmitry Petrukhin, Head, Indirect Sales Department, PERI

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