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Plant sales collapse signals shutdown for Asian Tigers

CONSTRUCTION MACHINERY sales in South East Asia have collapsed along with the currencies of Indonesia, Malaysia, Thailand and Korea, plant manufacturers claimed this week.

At a preview of April's Bauma plant exhibition in Munich this week, manufacturers described the slide in sales as 'a disaster'. The sharp fall, particularly in 'front end' plant, signals that new projects in the region have all but closed down.

German foundation equipment manufacturer Bauer said its sales were now 'down to zero in Indonesia'. South East Asia generated 30% of Bauer's overseas business before the currency failures. But overseas sales manager Heidrun Lesti said that efforts would now be made to secure new orders in South America to compensate.

Finnish hydraulic piling hammer manufacturer Junttan described the market as 'all but closed'. Junttan's one bright spot is Hong Kong where the government has outlawed diesel hammers from 1 April and so sales of hydraulics are booming.

Schwing sales director Jochen Grlich warned that there might also be a problem in China 'within a year' since the country is short of money. At present a booming market in the US was compensating for lack of sales in Asia, said Grlich.

Compaction plant manufacturer Bomag recorded an 8% year on year drop in South East Asian sales, as a result of the currency crisis which started last autumn. European marketing manager Joachim United said this compared with a worldwide rise of 18% in exports and noted: 'Thailand is very depressed'.

Caterpillar took a more optimistic view. 'We won't get into a loss' over the market collapse, said its European head of communications Charles Belouin. 'Asia represents just 10% of our worldwide sales value.'

Cautious optimism was also expressed by the organisers of Bauma. 'It is difficult to forecast future development, but once the currency crisis is overcome we feel it [SE Asia] will return to a high growth rate,' said Bauma 98 Exhibitor's Council chairman Paul Eirich.

Mike Winney in Munich

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