19102004History

KCI Konecranes Business Magazine | Special Issue 2004

KCI Konecranes went through manydifferent phases in its history beforebecoming the pure crane companythat we know today. History is animportant part of our company cul-ture. Knowing where we come fromcan be valuable when pursuing thegoals we have set for ourselves forthe future. By taking a deeper lookat KCI Konecranes’ past we find thesource of many of the strategies andoperating models we use today. Thissets matters into perspective andbrings out new aspects. The logic inour ventures becomes clear.

Although our history as KCIKonecranes starts in April 1994, ourhistory as a crane builder dates backto 1933, when the first ElectricOverhead Travelling (EOT) craneswere sold. But it is fair to start thehistory narrative all the way back in1910 when KONE Oy started opera-tions as a repair shop for electricmotors.

Most histories tell only part ofthe story, and this one is no differ-ent. More details about the back-ground of the many companies thathave joined the Group through the

years would have been an especiallyinteresting addition. This we willleave for the next history issue.

I owe a special thank you toJohn Simon, editor of the SpecialIssue of the KONE News & Views in-house magazine, numbers 1/1991and 1/1998 of which feature KONEhistory from 1910 to 1998. His thor-ough work made my job a great dealeasier.

This history issue is released incelebration of the first ten years ofKCI Konecranes as an independentcompany. In addition to what wasincluded in John’s history issue, thisscrapbook attempts to fill in thegaps and of course to describe theperiod since 1994.

At Group Communications, wehope you will enjoy this journeyback in time. We hope you will gainnew points of view, and perhapssome answers to matters that mayhave puzzled you.

Hyvinkää, April 2004

Franciska Janzon

History Gives Clues to the Present

1989 Finox Nosturit, Finland.Carruthers, UK.Munck-Freissler, Austria.

1987 Landel, Houston, Texas, USA.

1986 First French Acquisition,Verlinde, France.

1985 Equipo Industrial, Mexico.

1984 MCL Cranes,Quebec, Montreal, Canada.

1983 First US Acquisition, R&M Materials Handling, Springfield, Ohio, USA.

1980 Asea Crane Works, Sweden.

1976 Sowitsch Crane Works, Austria.

1973 International Expansion Starts with first acquisition of Norway´s Wisbech-Refsum.

2002 Shepard Niles, Inc., NY, USA.

Burlington Engineering Division, Boston,Massachusetts, USA.

Crane Manufacturing & Service Corporation, Milwaukee, Wisconsin, USA.

Historical entry into Japan through joint venture company Meiden Hoist System Company Ltd, Tokyo, Japan.

1999 Ecalevage, France

1998 Provincial International Cranes,Markham, Ontario, Canada.

Overhead Crane Service,Maryland, Baltimore, USA.

Trost & Hilterhaus GmbH, Germany.

1997 Copas ALM, France.

First German acquisition,MAN SWF Krantechnik.

1996 Theo-Tello-Bush, California, USA.

Matman, Paris, France.

Orley Meyer, Wisconsin, USA.

All Crane Parts & Service,Edmonton, Alberta, Canada.

CGP-Koné S.A., Orléans, France

1993 Kranco, Houston, Texas, USA.

1992 Intransmas, Crane Operation, Hungary.

1991 First major UK acquisition, Lloyds British Testing, with operations in UK & Australia.

1990 Action Crane & Maintenance,Chino, California, USA.Schippers Hjiswerktuigen,The Netherlands.

PublisherKCI Konecranes PlcP.O.Box 661, FI–05801 Hyvinkää, Finlandcommunications@kcigroup.comwww.konecranes.com

PhotosKONE and KCI Konecranes archives

Editor in chiefFranciska JanzonGroup Communications and Investor RelationsPhone: +358 20 427 2043Mobile: +358 40 74 8381franciska.janzon@kcigroup.com

Production and layout Onnion Oy

PrintedLibris 4/2004

Konecranes World Special Issue History 1910–2004

CoverKONE began producing harbour cranesin the early 1950s. Before long, thecompany emerged as a world leader inthe sector (photo from 1953). Photo (on page 3)Salmisaari powerstation in Helsinki

2 Konecranes world

KCI Konecranes timeline

2003 CraneMann Inc., Houston, USA.

KUBI Kran- und Beggerinstandsetzug GmbH,Lampertheim, near Frankfurt, Germany.

Three Joint Venture Companies formed in China.

2000 Kulicke Krane GmbH, Berlin, Germany.Kulicke Kranservice Schwedt, Germany.

Kulicke Kranservice Köpenick, Germany.

Service business of Noell Service und Maschinentechnik GmbH, Germany.

Donges Stahlbau GmbH, Germany.

Gruas Mexico S.A. de C.V., Mexico.

F.T. Crowe, Portland, Oregon, USA.

Cranex Sp.z.o.o., Gdansk, Poland.

Tepa-Mestarit Oy.Finland.

Caillard, Le Havre, France.

2002 Opening of own hoist factory in Shanghai, China.

2000 First IMD seminar

Harbour crane service unit established,KCI Koneports.

1997 First KCI Academy training

1996 March 27 KCI Konecranes shares are Listed on Helsinki Exchanges.

1943 Hyvinkää Crane Factory

1940 Crane no. 200

1940 Crane no. 100

1936 First Wire Rope Hoist sold

1933 First EOT Crane (Electric Overhead Travelling) sold.

1910 The Electrical Motors Repair Shop KONE Oy founded.

1969 Hanko Crane Factory

1960 First Maintenance Contract signed.

Crane no. 2000

Separate crane service unit established.

1952 Crane no. 1000

1950 First Harbour crane sold.

1994 KONE’s sale of the crane business to members of KONE Cranes Management and to Industri Kapital.

1988 Hoist no. 50.000

First Kone Cranes management Conference.

Separate division called KONE Cranes is established.

1975 Hämeenlinna Hoist Works

Konecranes world 3

EventsMajor acquisitions and JVs

In the begin-n ing therewere no cranes.There wereonly electric

motors and rebuilt electric motors.In those days, customers traded intheir old electric motors when pur-chasing new ones.

That was 1910, when a Finnishelectrical engineering company,Strömberg, decided to spin off therepair and sale of renovated motorsas a separate business to protect theprice levels ofits new motors.

T h e n e w company wascalled KONE –“machine” inFinnish – and all its stock wasr e tained by Strömberg. Atthat time, it wasnot much morethan a machineshop operatingout of an oldstable on theStrömberg fac-tory grounds inHelsinki, thehorses havingbeen moved to Gottfrid Strömberg’smanor farm to make room for themachines.

Going up…Strömberg was the distributor forGraham Brothers of Sweden, Scandi-navia’s leading elevator company. In1912, Lorenz Petrell, an engineerand head of Strömberg’s elevatordepartment, added the duties ofManaging Director of KONE to hisexisting responsibilities. Before long,Strömberg would transfer all its ele-vator business, including engineeringand field personnel and maintenancecontracts to KONE.

Finland at the time had been aGrand Duchy of the Russian Empiresince 1809. As the First World Warheated up across Europe, KONE’s

manufacturing resources wereincreasingly called upon to producesupplies for the Russian Army. Thecompany turned out, for example,over 10 million brass shell castingsand employed as many as 600 peo-ple at the height of wartime activity.

Postwar KONEIn 1917, the Russian Revolution cre-ated an opportunity for Finland todeclare its independence. Aftermore than 100 years of Russiandomination and six centuries as part

of Sweden, Finlandemerged to take itsplace among thefree nations ofEurope. The sameyear, Strömbergterminated itslicence with Gra-ham Brothers, andKONE establishedits own elevatorindependence. In1918 the youngcompany, with apostwar payroll ofonly 50, installedthe first four eleva-tors designed and manufactured inFinland.

KONE’s parent company,Strömberg, experienced difficulties inthe early 1920s. Strömberg asked amember of its advisory board, a civilengineer named Harald Herlin tomake recommendations for improv-ing profitability. He suggested sellingnon-core business operations andoffered to buy KONE. His offer wasaccepted. He immediately began look-ing for more adequate manufacturingspace for his growing elevator busi-ness to take advantage of expandingmarket opportunities. Herlin bought amargarine factory in Helsinki andconverted it into an elevator factory.

With Harald Herlin as Chairmanof its Board of Directors and LorenzPetrell as President, KONE went onto become Finland’s leading elevatormanufacturer.

Harald Herlin had a pas-sion for business. He wasinvolved in shipbuilding,waterpipe and sewer construction, and otherventures. Many werelinked to the rapid expan-sion of Helsinki and sub-urbs. He was well-placedto know about new con-struction projects andlobby for the inclusion ofelevators in buildings.

1910

4 Konecranes world

Cranes and hoistsThe years leading up to the stock market crash of 1929produced boom figures for KONE: 160 elevators in1926, 200 in 1927 and 320 in 1928. The personnel roseto over 200. Then the bottom fell out of the market, andthe Great Depression set in.

President Lorenz Petrell’s health was failing and hewas succeeded in 1932 by Heikki H. Herlin, son of theowner and Chairman of the Board of Directors. Petrellhad built up elevator maintenance and service activities,and this foresight provided much-needed income duringthe years when new equipment sales hit bottom.

As elevator orders declined during the early depres-sion, Heikki H. Herlin sought other outlets for KONE’sdesign and manufacturing capacity. Herlin thoughtKONE should have another industrial leg to stand on,one exploiting technology familiar to elevator engineersbut serving a market with a different kind of investmentcycle.

KONE had already experimented with industrialcranes during the 1920s as a natural extension of thecompany’s existing technology, but in 1933 a seriouseffort was made to enter the crane market. The sameyear KONE produced its first electric motors and KONE

began producing sizable cranes for pulp and paper millsand power plants: 4 in 1933, 5 in 1934, 13 in 1935, and21 in 1936. In 1936 a second major step was taken whenKONE started manufacturing its own electric hoists: 14in 1936, 45 in 1937, and 68 in 1938. For Heikki H.Herlin, making all the components in-house was one keyto ensuring quality.

As a young engineerHeikki H. Herlin was on astudy trip in the USA inthe early 1930s. He cameback with an agencyagreement for ShepardNiles’ wire rope hoist inFinland and the Balticcountries, and the eddy-current brake, which was

used to get a foothold inthe North American papermills still in the 1980s. Forthe European customers wesold thyristor controls, butin America the good oldeddy-current brake wasstrong. Nowadays, ShepardNiles is part of KCI Kone- cranes.

In 1927, with elevator demand growing rapidly, KONE moved into aformer margarine factory in Haapaniemenkatu in Helsinki. Escalatorand crane production were both launched here, and the buildingwas later expanded several times during the 40 years it served asKONE headquarters.

In the mid 1930sproduction jum-ped to more than20 cranesannually, givingKONE the secondleg it needed toprotect againstsignificant dropsin elevator sales.The elevator onthe photo is aGraham Brothersinstallation fromSweden.

In 1943, despite war hostilities,KONE managed to build a new cranefactory in Hyvinkää. It providedroom for the assembly of much lon-ger bridge girders than could be pro-duced at the old Haapaniemenkatuelevator and crane factory in Hel-sinki. Even in the face of labour shor-tages and problems in obtainingmaterials, crane production conti-nued at the factory throughout theSecond World War.

On August 29, 1952 the last warreparation delivery by rail left theHyvinkää factory. It was a big bridgecrane with a 30-ton lifting capacitythat required seven train wagons fortransportation. The considerablecrane capacity left over after the lastwar reparations deliveries did notaffect employment at the Hyvinkääfactory, which had found a new out-let in harbour crane production.

8 Konecranes world

Jump in productionProduction immediately jumpedto more than 20 cranes annually,giving KONE the second productfamily it needed to protect against

significant drops in elevator sales.Before long the first wood handlingcranes began to open up Finland’simportant pulp and paper industrymarket to KONE products and ser-vices.

KONE’s diversification intocranes and hoists was extended dur-ing the 1930s into conveyors andconveying systems. Deliveries cove-red a wide range of applications,from iron-works to cigarette facto-ries and from Helsinki’s oldest brew-ery to the city’s brand-new centralpost office.

The elevator business underHeikki Herlin’s leadership enjoyed atechnological leap forward duringthe 1930s. With less emphasis on production, the com-pany turned its energies toward safety and performancefeatures. Export sales also became increasingly impor-

tant with deliveries to customers as far as Ireland andMoscow.

Return to warAs industry rebounded from the recession and construc-

tion activity picked up, elevatorand crane sales experienced asharp upturn. Elevator number2,000 was shipped in 1935;Crane number 100 was sold in1937. Elevator number 3,000was sold in 1939, but before itcould be shipped, Finland wasattacked by its eastern neigh-bour and KONE once again hadto divert its resources to mili-tary production.

After Helsinki was bombedin November, 1939, part ofKONE’s personnel and equip-ment moved to work in a bombshelter and began turning outmilitary supplies for the defence

effort. Elevator and crane production were slowed bymanpower and materials shortage as well as by delaysthroughout the construction industry.

A 15-ton KONE crane of lattice girder construction, one of the first to beequipped with a KONE electric hoist, nears completion at the

Haapaniemenkatu factory (1936).

Wartime hostilities sent KONE workers into fortifiedunderground shelters where they started to produceartillery shells and other munitions.

1930

Nevertheless, output continued at alevel only somewhat lower than thatwhich had been reached before theoutbreak of war.

New service philosophy Heikki H. Herlin also realised longbefore many others in the industrythe importance of good after-salesservice. Poorly maintained equip-ment and poor customer relationscould drive a company to ruin, nomatter how impressive its manufac-turing credentials.

Maintenance and repairs had tobe provided for by the original ele-vator manufacturers, whereas therewere no laws regulating crane main-

tenance. Crane owner’s usually ser-viced themselves their cranes. Untilthe 1960s KONE’s elevator techni-cians also performed service oncranes, but the priority was clearlystill on elevators.

Wartime heroicsThe Second World War began inFinland as the Winter War of 1939–1940. Soviet troops, expecting tooverrun Finland in a few days, werefought to a standstill by outnum-bered and under-equipped Finnishtroops. There followed an uneasyinterval when World War II began inearnest in Europe, and in Finland asthe Continuation War. From 1941

through 1944, Finland and theSoviet Union fought over Karelia andother territories along their mutualborder; during 1944–45 exhaustedFinnish troops regrouped to driveGerman troops from FinnishLapland.

More than two dozen KONEemployees died defending theircountry, a figure equal to seven percent of the 1941 workforce. HaraldHerlin also passed away in 1941. Hisson, Heikki H. Herlin, replaced himas Chairman of the Board ofDirectors and held the position forthe next 46 years.

Maintenance andrepair activities werenot yet seen as busi-ness opportunities inthe 1930s, but thecompany alreadyappreciated theimportance of goodsupplier-customerrelations.

Workers were required tomeet new and more difficultchallenges after the war(Photo from 1947).

Konecranes world 9

The larger assembly hallat the Hyvinkää CraneFactory allowed KONE toexpand into more ambiti-ous crane production.

This early wood handlingunit, one of KONE´s first

proper cranes, was deliv-ered to Oulu Corp. pulpmill in northern Finland

in 1935.

Design engineers in whitehad no choice but to enterevery detail of every draw-ing by hand.

The heavy demandsof wartime and war

reparations pro-duction left KONE

with a highly skilledworkforce to meet

rising postwardemands for cranesand elevators. Here

a young man besidea 45-ton hook ready

for shipment atHyvinkää works.

Assembling a hoisting gear at theHelsinki elevator factory (1947).

20-ton bridge crane at theCable factory in Helsinki.

The MT, KONE’s first electrichoist, appeared in 1936.

In 1914 Kone turned thisresidence into workshops.

more demanding than any the company had previouslyconfronted: in 1944 KONE turned out only 31 craneswith a combined hoisting capacity of 254 tonnes; by1948 the war reparations programme had spurredgrowth to an output of 103 units with a combined hoist-ing capacity of 1,835 tonnes.

As the war reparations deliveries were completed,KONE found itself with improved technology, expandedfacilities, and the capacity to take on more demandingcrane orders. In short, KONE cranes were now competi-tive with many of the best brands being sold in Europe.

First KONE harbour craneDespite the pressure exert-ed by these war repara-tions obligations, KONEhad to pay attention to thedemands of its other customers as well. In 1947, KONEdelivered over 500 electric hoists, including 49 that wereexported to Sweden. In the same year, an order for 150hoists was received from Holland. Crane output topped100, and the hoisting capacity of individual units farexceeded what KONE had been able to produce beforethe war.

The considerable crane production capacity thatremained when the last war-reparation product deliver-ies left Hyvinkää for the Soviet Union found a new out-let in harbour crane production, which was destined togrow rapidly.

The first unit was delivered in 1950 to the Finnishport of Hanko, but before long, KONE would be shippingthese Very Large Cranes all over the world.

In 1943 KONE managed to build a new crane facto-ry in Hyvinkää, 30 miles north of Helsinki. Designedspecifically for crane manufacture, it provided room forthe assembly of much longer bridge girders and otherwelded structures than could be produced in the old ele-vator and crane factory in Helsinki.

War reparationsThe resolution of the Continuation War imposed onFinland heavy war reparations to be paid to the SovietUnion. Most of the payment was to consist of industrialproducts such as railway engines and cars, tug boats andbarges, electric motors, and all the machinery needed tooutfit ten complete wood processing factories. Includedin the list were 200 cranes (later reduced), 72 electric

hoists and 100 freight elevators,all to be made by KONE. Eventhe smallest cranes on the listwere as big or bigger than anyKONE had ever produced up tothat point. The largest units onthe war reparations list presenteda challenge that seemed all butimpossible at the time but turnedout to be a blessing in disguise.

The severe lack of raw mate-rials and skilled workers doubledthe difficulty of delivering thisequipment on schedule. TheHyvinkää crane and Helsinki ele-vator factories had to be expand-ed. Production schedules were

1950

Many of KONE’s earliest crane deliveries, including the oneabove, went to paper mills, helping the company gain afoothold in this very demanding process industry sector.

Tampella Oy Tolkkinen sawmill in Finland.

12 Konecranes world

Konecranes world 13

During the 1950s and 1960s, KONE made importantstrides in improving its crane technology. The firstKONE electric hoist was the MT in 1936. The KONE MTwas so durable that one licensee was still manufacturingand selling it in the 1960s. The MT range included mod-els with hoisting capacities of 400, 750, 1,500 and 2,250kilos and speeds up to 18m/min. Annual sales surpassedthe 500 figure in the 1940s. The MT hoist gave way tothe SN series in 1953. SN hoists were specificallydesigned for electric overhead travelling crane applica-tions. Their lifting capacities extended to 10 tonnes andlifting height to 60 metres. The hoist motor was relo-cated into the inside of the hoist drum, and the hoistdrum was fixed parallel to the traverse runway. As aresult, the SN unit took up less space than its predecessor.

Materials handling technologyIn the first half of the 20th century, materials handlingtechnology was heavily oriented toward traditionalmechanical solutions. KONE’s first cranes, for example,featured electric hoists but manual trolleys. Conveyorsystems required a substantial amount of manpower tofeed, unload and unplug bottlenecks.

This manually operated trolley with a 45-tonne capacity entered pro-duction in 1932 at the Helsinki factory. KONE would not beginmanufacturing electric hoists until 1936, when it began thinking ofitself as a crane company as well as an elevator supplier.

The first KONE electric hoist was the MT. It appeared in 1936 and wasstill being manufactured under licence in the 1960s.

The SN hoist line appeared in 1953.

1414 Konecranes world

Paper mills, steel mills, shipyardsand harbours All Finland’s most significant indus-tries before 1964 were potentialheavy duty crane customers. Thepulp and paper industry led the way,with needs that started from themoment bundles of wood arrived atthe plant. Since most wood trans-port in Finland was by water, specialsolutions were needed to lift thebundles of logs from nearby lakesand speed them toward the woodyard.

Pulp and paper mills wereamong the earliest customers forKONE Cranes. A strong home basein Scandinavia helped KONE Cranesacquire a competitive edge in thedemanding pulp and paper cranesector. In the 1980s KONE wonnearly every paper mill crane orderin Europe and Canada. In the case ofpaper mills, high precision craneswere needed to lift rolls off thepaper machine. Focused R&D effortsin microprocessor and mechatronicsapplications broadened this leader-ship into other process industries aswell. KONE Cranes also deliveredcranes to power plant and steel coilhandling operations. These demand-ing installations led to an expansionof the product range and to a con-stant search for competitive techno-logical solutions. KONE Cranesdeveloped its expertise within highlyautomated crane operations. Auto-mated waste handling cranes werefirst delivered to a Swedish incinera-tor in 1969.

With the rapid growth in world-wide cargo transport following the Second World War and KoreanWars, port authorities began toorder large dockside cranes for load-ing and unloading ships. KONE start-ed to design and produce harbourcranes during the 1940s. These weresingle boom slewing cranes for han-dling general cargo. From 1950onwards, KONE was very active inthe production of harbour and shipyard cranes and continued to

In the 1960s KONE began supplying com-plete log intake and slashing systems andwould become a leading supplier of keywood yard process equipment in the1970s.

Shipyards were very active in the 1970s.KONE Cranes delivered its first ShipyardGantry crane to Bremer Vulcan, inGermany. This delivery was followed by several other, a.o. to shipyards in Finland,Soviet Union and Poland.

Konecranes world 1515

expand this product line. At first thegiant jibs had to be riveted together,but in 1956 KONE introduced thefully welded lattice jib. It provedboth lighter and stronger than previ-ous jib types. Two years later, dif-ferential gears made luffingsmoother and more efficient. Suchinnovations helped KONE move tothe head of the field in a very shorttime.

The first eddy current brakes,introduced in 1955, symbolizeKONE’s commitment to applyingthe latest available technology tothe tasks of improving the safety,performance and economy of itsproducts. This application was anearly step before the tremendousleap forward in electronic andmicroprocessor technology thatwould occur in the coming decades.

A purpose-built factory for verylarge cranes was opened on theHanko peninsula in southern Finlandin 1969. Designed specifically forlarge shipyard and harbour cranes,the Hanko factory had its own deep-water dock for loading cranes direct-ly onto barges or ships for deliveryaround the world.

KONE became the leading supplier of paper mill cranes in the world, winning virtuallyevery order in the demanding Canadian and European markets.

Very large cranes constructed at the Hanko factory in southern Finland were a regular sighton the Baltic Sea in the 1970s as they weretransported all over the world by barge or spe-cial transport vessel.

Heikki H. Herlin shaking hands with customerafter successful delivery of a multiple har-bour crane order in the 1950s.

Harbour cranes at the Port of Göteborg in Sweden.

In 1969 the first fully erected VLC crane was deliveredto the customer’s site. In the 1970s the offshore oilindustry was booming, KONE Cranes got it’s share ofthis market in the early 1980s through deliveries of size-able offshore cranes to Finnish shipyards building ves-sels to be delivered to the Soviet Union. Lifting capaci-ties ranged from 600 to 1,600 tonnes. 1985 saw theintroduction of the first ship-to-shore container handlingcrane with AC frequency converter in all movements. In1987, the delivery of the first dual hoist ship-to-shorecontainer handling cranes with elevating platforms tookplace.

The collapse of harbour and shipyard crane marketsin the mid-1980s led KONE to outsource the Hankofactory production to its management team. The facto-ry continued functioning, and today it is working at fullcapacity, turning out container cranes, unloaders, andgoliath gantry cranes. It also produces other weldedstructures during times of lower crane demand.

DiversityBesides elevators and cranes KONE’s product rangeincluded a diverse mix of businesses. Advertisementsfrom the early 1930s displayed a product range whichincluded passenger and freight elevators, cranes andhoists, chain and belt conveyors, and various mechani-cal and electrical components ranging from gear wheelsto electrical relays. KONE started making conveyors in

the 1930s. The business grew, eventually forking intoseparate units for wood handling and bulk handling. In1976 the Roxon range of mining equipment andhydraulic rock breakers was added. In 1986, however,KONE decided to concentrate on wood handling andsold both its bulk handling and breaker business units.KONE Wood was sold in 1994.

KONE also included a KONE Instruments division,which developed microprocessors for computerised ele-vator controls. Also in shipboard cargo access equip-ment KONE had a leading market position through itsdivision MacGregor-Navire. (Later both of these divisionswere also sold, in 1995 and in 1993.)

Crane maintenance mentality After-sales services were considered for many years tobe a necessary evil. Maintenance and repair had to beprovided for by the original equipment manufacturersbecause otherwise no one would buy their products.However, high labour costs and energy costs in Finlandinsured that KONE Cranes would not be able to competeworldwide on price alone. In addition to efficient pro-duction, technological superiority and service-minded-ness was to become KONE Cranes basis for its operatingstrategy.

Although KONE Cranes and KONE Elevators alwaysshared a basic KONE approach to doing business, forexample in developing their service business orientation

The first maintenance agreement was signed in 1960.

Finland’s pulp and paper industry developed technology that spread all over the world. FromHeikki Herlin’s own patented log-bundle handling invention to complete wood yards, KONEmade an important contribution.

Despite structural changes in the very large crane market in the1980s that depressed demand, KONE continued to make break-

throughs with such revolutionary equipment as the continuousship unloader. Two units were delivered to the Port of Tilbury,

UK in 1990.

16 Konecranes world

or quality improvement processes they followed differ-ent paths.

Elevator maintenance is ruled by laws that state thatthe elevator must be serviced. In the crane industry, reg-ulations on safety and maintenance were introducedmuch later. Traditionally, crane owner’s have their ownmaintenance crews servicing also the cranes. KONECranes faced the challenge to convince crane owners ofthe benefits of professional crane maintenance. Benefitsin the form of higher crane availability, improved safetyand cost savings. The KONE Cranes approach repre-sented a new philosophy emphasising the importance ofpreventive maintenance and continuous modernisation.The result is reduced downtime in the customers under-lying business process.

Headed by Åke Gagneur, a separate department forcrane service was established in 1960. Later that sameyear, the first service agreement was signed in Helsinkiwith Witraktor, part of Wihuri-group. In 1962 there werea total of 102 service agreements and the time was rightfor KONE Cranes to start activities outside its home mar-ket.

The first maintenance agreement outside of Finland,whereby we assumed full responsibility for crane avail-ability in the customer’s operation was signed in 1962with Fiskeby Ab in Sweden. The agreement included 96cranes. This marked the start of Konecranes mainte-nance activities, as they are known today. Records showthat in 1975 the maintenance agreements had grown to403 (covering 5,100 cranes and hoisting units) and thisdevelopment was to continue at the same or acceleratedrate.

KONE Cranes also chose the approach of providingmaintenance services for all types of overhead travellingcranes regardless of their original manufacturer. KONECranes was alone in this respect, as other crane manu-facturers serviced only their own equipment. The logicbehind this approach was to increase growth.

Being a fairly young business, with a small installedbase of its own equipment, KONE Cranes pursuedgrowth and scale benefits by servicing also competitors’equipment. This became a major source of feedback andinspiration for product development. Today, Konecraneshas been faster than its rivals to introduce new technology.

The first service cars were of the type Citroen2CV. They, however, proved to be much toosmall. Here on the picture the first proper servi-ce car a Peugeot 1963 model with Mr. Telamoand Mr. Nurminen proudly posing by its side.

In the 1970sKonecranes hadfine cars for exhibi-tion purposes. Onthe picture Mr. TeuvoTero shows the “3rdmodel” of the UNhoist.

KONE Cranes alsorealised that themost expensivecrane is the cranethat does not work,and that ideally,equipment shouldbe checked andrepaired before afailure takes place.This led to theconcept of preven-tive maintenance.

Konecranes world 17

senting advanced or traditional tech-nology in markets where customersmight prefer one or the other.

KONE Cranes’ reputation as theleader in high technology and auto-mated applications for processindustries was firmly established inthe 1980s. Canada’s MCL and Mexico’sEquipo Industrial were added in1984. America’s Landel (1987),Scotland’s Carruthers (1989),Austria’s Munck-Freissler (1989),Holland’s Schippers (1990), former

First among the acquisitions outsideFinland came Norway’s Wisbech-Refsum in 1973, followed by thecrane business of Austria’s Sowitschin 1976 and the crane business ofAsea (formerly Hvilans) of Swedenin 1980.

Two major hoist manufacturerswere also brought on board: Robbins& Myers (1983) of the United Statesand Verlinde (1986) of France.Their addition gave KONE Cranesthe option of selling hoists repre-

One of the first acquisitions was Sowitschcrane business, Austria, in 1976.

Through the integra-tion of LloydsBritish, a U.K.based crane servicecompany with sub-sidiaries in Australiaand New Zealand,MaintenanceServices becamethe largest of KONECranes unitsaccounting for onethird of the divi-sions’ turnover.

As with KONE Elevators, growth in the crane business came partly as organicgrowth, partly through acquisitions. The desire to enlarge the company´s servicebase gradually became a more important criterion for acquiring new companiesthan trying to increase new crane market share.

Internationalisation

JV company Gruas KONE ofVenezuela (1990), Lloyds BritishTesting Company Limited (1991),Hungary’s Intransmas (1992),America’s Kranco Browning (1993),America’s Theo-Tello-Bush, Matmanand former JV company CGP-KonéS.A. in France (1996), America’sOrley Meyer and Canada’s All Crane& Parts & Service (1996) followedsuit.

Copas ALM (France) and MANSWF Krantechnik (Germany) wereadded in 1997. In 1998 Canada’sProvincial International Cranes,America’s Overhead Crane Serviceand Germany’s Trost & Hilterhauswas added to the Group. In 1999Ecalevage (France) and BrevaTechnics (Belgium) was added andGruas Konecranes of Venezuela wassold.

Year 2000 was the year of acqui-sitions with 10 new companies join-ing the Group: Germany’s Kulicke

Konecranes world 19

MajorMajortechnologicaltechnologicalwatershedwatershed

Automated manufacturing cells for gear components at HämeenlinnaFactory, Finland.

The construction of a newelevator factory in Hyvinkää,Finland, equipped with thelatest automated machinery,came at a critical point in thecompany’s history. These advanced machining centres-paved the way for Just In Time production, a revolutionthat swept KONE factories in the 1980s. Cell organisa-tion replaced traditional assembly lines, and qualitybecame a matter of doing each job right the first timerather than catching and correcting costly mistakesthrough tight control procedures.

1960

Krane, Kulicke Kranservice Köpe-nick and Kulicke KranserviceSchwedt, the service business ofNoell Service und Maschinentechnik(Germany), Germany’s DongesStahlbau, Gruas Mexico, America’sF.T. Crowe, Cranex Sp.Z.o.o. inPoland, Tepa-Mestarit of Finland(earlier acquired 50% share) andCaillard of France. America’sShepard Niles, Burlington Engin-eering Division, and Crane Manufac-turing and Service were added in 2002.

In 2003 KUBI Kran- und Beg-gerinstandsetzung of Germany andAmerica’s CraneMann Inc. completethe list of major Konecranes acquisi-tions.

Not to be forgotten, however,are significant joint ventures as wellas licensees and distributors in manycountries. Konecranes also acquiredalong the years ownership of formerdistributors in Asia and Australia,and built up a presence in Russia,the Baltic countries, and otherpotential growth market areas.Japan being one of the largest (if notthe largest) crane markets in theworld, 2002 marked a historicalevent as KCI Konecranes andMeidensha Corporation of Japanagreed to become Joint Venturepartners in Japan. Previously, KCIKonecranes had a presence onlythrough a sales office in this market.

In 2002, KCI Konecranes alsostarted to build up a network ofJoint venture partners in China. In2003, three Joint Ventures in Chinawere completed.

Crane and hoist production ben-efited from the same new technolo-gy being introduced next door in theelevator factory. Numerically con-trolled machines were introduced in1966, and serial design and produc-tion of gears started. Although thefirst computer had only arrived inFinland a few years before, 1967saw the introduction of computer-based design in the same factory.Computer aided design (CAD)became a basic work tool not only inthe factories but also in the localdesign departments of most sub-sidiaries.

ModularityBy the mid-1960s, half of KONECrane Division’s invoicing was foroverseas deliveries. Further designimprovements to reduce the weightand overall dimensions of hoists andconstruction costs for cranes wereneeded to keep KONE Cranes’prices competitive. In 1967, theprinciple of modularity was estab-lished for all crane components, giv-ing customers almost unlimitedchoice of product features whilemaintaining the benefits of large-scale component production. TheUN hoist series featured standard-ised parts that could be combined ina multitude of ways to produce cus-tom-tailored units for specific appli-cations. This modular approach orig-inally covered hoisting capacitiesfrom 1,000 – 24,000 kg but was laterexpanded to 500 – 50,000 kg.

Hardening of all crane gears andwheels was also introduced in 1967.1978 saw KONE Cranes introducingthe revolutionary low-headroomUNV hoisting trolley. The UNV hoist

line complemented UN hoists at theupper end of the duty range. Forextra heavy duty, the UNV seriesprovided hoisting power up to250,000 kg.

1975 KONE Cranes bought asmall forklift manufacturers’ workshop in Hämeenlinna and moved themanufacturing of UN hoists fromHyvinkää to Hämeenlinna. Hoist pro-duction took a great leap forward in1983 with the complete automationof the Hämeenlinna Gear Factory.Four years later KONE Cranes intro-duced a fourth generation hoist, the

The appearance of the UN hoist line in1967 signalled the arrival of one ofKONE Cranes’ most successful andlongest lasting product lines (left).

The compact SM Spacemaker cranefor heavy-duty processes appeared in

the 1990s (right).

The XL hoist series was introduced in 1987.

XL series, on the 50th anniversaryof the development of the first MTunit. The XL became the basis forthe most advanced crane systemsavailable on the market. In additionto design innovations and outstand-ing reliability, XL introduced built-inCondition Monitoring with SWPmeasurement (Safe Working Period)as a serial feature as part of KONECranes emphasis on preventivemaintenance. In 1988, the KITCranes were introduced, later re-named Modular Cranes. In 1993 theFEM Safety norm, which incorporated

20 Konecranes world

Konecranes world 21

the SWP concept co-initiated byKONE Cranes, was published.

The heavy duty UNV hoist linegave way for the SM line in 1992-1993. The heavy duty range of hoist-ing trolleys had been standardised,the design had further been opti-mised to more compact dimensionsand the lifting capacity of the rangehad been increased. The SM hoistline provided hoisting power rangingfrom 5 tonnes to 400 tonnes of lift-ing capacity. The line is now beingextended to 500 tonnes.

Automation and control technologyIn crane, wood and chip handlingand cargo access application, high-tech solutions had to struggle foracceptance against conservativeindustry tradition. Little by little,however, KONE succeeded in con-vincing customers of the addedvalue they would receive throughthe addition of intelligent operationand labour-saving automation toproven equipment.

Computerised monitoring andcontrol systems produced bettermaterials-flow in factories andreduced expensive down-time. Qua-lity improved, and so did through-put-times.

In the 1970s, KONE Cranes wasalready a forerunner with itsThyristor Stepless Speed Controlsfor heavy-duty cranes.

A leap forward came with the intro-

duction of advanced control systems

such as the inverter drive, which pro-

vides smooth and accurate crane

and hoist movement.

A second leap forward camewith the introduction of advancedcontrol systems such as the inverterdrive, which provides smooth andaccurate crane and hoist movement.In 1989, KONE Cranes introducedthe industrially manufacturedFrequency Converting Drive rangeDynAC and DynaHoist for cranespeed control. Inverter drives featur-ing high reliability and low mainte-nance requirements are ideal build-ing blocks for large scale automationprojects such as the Autostore paperroll storage and retrieval system.These innovations helped improvenot only the cranes’ efficiency butalso their operational safety. KONECranes R&D efforts continuouslynarrowed the gap between automa-tion and manual operation. Increas-

ingly, small scale automation be-came a standard feature on all engi-neered cranes.

Along with a higher degree ofstandardisation in operations in thelate 1980s, KONE Cranes as the firstin its industry introduced computer-aided engineering and sales softwaresolutions. The EOT-Man softwarefeatures design, calculation and con-figuration capabilities for large EOT(Electric Overhead Travelling) cranes.For serial light duty industrial cranesKONE Cranes launched the Mark-man software package.

The first fully automated Paper Reel Storagecrane was delivered to Nordland Papier

GmbH, Germany in 1990.

22 Konecranes world

The world-wide reces-sion spurreda restructur-ing of KONE

Industrial crane operations in theearly 1990s. A combination of newproduction methods and increasedreliance on supervised local steelstructure production allowed KONECranes to reshape the crane-buildingpart of its business. Manufacturingcapacity was brought back into linewith reduced demand. Regional reor-ganisation brought decision-makingcloser to the customer base. Craneswere standardised and the manufac-ture of crane components was con-centrated to three manufacturingplants. Construction of standardcranes was streamlined to assemblyof components produced in KONECranes component plants, and sub-contracting of steel frames. Therestructuring programme resulted inthe closure of 15 manufacturingfacilities and a reduction of person-nel by approximately 600 during theperiod from 1988 through 1995 anda significant reduction of fixed over-head costs. As a result of thesechanges a manufacturing culturewas replaced by a greater focus oncustomer service.

After a fairly difficult period of restructuring necessitated byreduced volumes in the industrialcranes sector, KONE Cranes im-proved its financial performance sig-nificantly in 1993. KONE Cranesclearly increased its share of theshrinking industrial crane market.Crane service volume grew by onefourth, component deliveries in-creased by one sixth, and the orderbook at year end was up almost

12 per cent over the figure for the endof 1992.

Back to basicsIn 1993 KONE Oy, headed by presi-dent Gerhard Wendt, decided toconsolidate its activity into itslargest division – KONE Elevatorsand dispose of all its other opera-tions including crane building.During 1993 the production andservice units of KONE Cranes wereincorporated as a separate company.In total some 40 crane companies in

Stig Gustavson joined KONE in 1982 andheaded KONE’s Roxon and Wood handlingunits before moving over to head the opera-tions of the crane division in 1988.

Streamliningactivities

20 countries with a combined per-sonnel of 2,850 constituted the inde-pendent KONE Cranes organisationunder one management team head-ed by Stig Gustavson to guide oper-ations.

With hoist production in Fin-land, France, the United States andBrazil and crane production in Asia,Europe and North and SouthAmerica, KONE Cranes was one ofthe world’s leading suppliers ofindustrial and dockside cranes. Salesaccounted for roughly 14-18 per centof KONE’s total Group sales.

Standing on its ownFor 60 years KONE Cranes steadilyrose from a novice in crane buildingand hoist manufacture to become aworldwide leader in virtually everyaspect of the industrial, shipyardand harbour crane business. Withthe backing of Industri Kapital, aleading Scandinavian private equitycompany, KONE Cranes stepped outfrom the shadow of KONE Elevatorsin 1994. The new KCI KonecranesInternational Group (aka KCI) andKONE Oy reached an agreement onMarch 4, 1994. Six weeks later thedeal was closed and KCI started outas an independent company. Thepurchase price was partly dependenton the Balance Sheet at closing,which took place on April 15, 1994.The Balance Sheet underwent athorough audit. Just before the endof the year, on December 28, 1994,

1990

Konecranes directors

1916–1947 Walter Jakobsson Manufacturing & Engineering1947–1955 Erik Ingvall Manufacturing & Engineering1955–1972 Lars Eriksson Manufacturing & Engineering1958–1966 Mauri Sormaala Crane Department1966–1968 Arto Torpo Crane Department1968–1969 Pekka Sillanpää Crane Department1969–1972 Lars Eriksson Materials Handling Engineering Group 1972–1994 Gerhard Wendt Materials Handling Engineering Group 1987–1988 Heikki Harjuvaara KONE Cranes 1988– Stig Gustavson KONE Cranes / KCI Konecranes Plc

all remaining matters were settledbetween KCI and the old parentcompany, KONE Oy.

KCI Konecranes was nowexpected by its new owners to pro-duce a return on the investmentthey had made. The new sharehold-ers of KCI Konecranes were primari-ly institutional investors fromSweden, Finland, Denmark andNorway. The majority of theinvestors formed a consortium rep-resented by the Investment FundIndustri Kapital 1994. GroupManagement, both at the headquar-ters and in subsidiaries overseas,were invited to take stock positions.The invitation was fully utilised, andsome 70 members of top manage-ment became shareholders.

In total, the new Group raisedequity of 300 MFIM and debt.During 1994 KCI Konecranes gradu-ally reduced its net debt burden, andat the end of the year the Groupboasted a net debt-to-equity relation(gearing) of 1:4. The Group’s solidi-ty was good, which was not a verycommon feature among its competi-tors.

The entire KCI Konecranesorganisation, including all personnel,thus became an independent groupunder separate ownership. The ulti-mate goal was to turn it into a pub-licly traded company. “We stronglybelieve that the combination of rap-idly growing service business withthe market potential of East Asiaand Eastern Europe will make KoneCranes an attractive stock marketcompany in the future” said HaraldMix a director of Industri Kapital inKONE’s News and Views In-housemagazine 1/1994.

Meanwhile, KONE Corporationsignificantly strengthened its finan-cial position through the sale first ofMacGregor-Navire (1993) and thenof KONE Cranes and KONE Wood.Equity as a share of assets climbedto approximately 40 per cent, upfrom 26.5 per cent in 1992. LaterKONE was able to acquire the

Montgomery Elevator, the fourthlargest elevator and escalator com-pany in the United States. This madea significant contribution to KONE’sfuture success as a pure play eleva-tor and escalator company.

In front of the KCI Konecranes headquarters in Hyvinkää in 1994 (from left:) Eero Odelma,Chief Financial Officer, Stig Gustavson, President & CEO, Antti Vanhatalo, DIrector, EngineeredCranes, and Teuvo Rintamäki, Finance Director.

“We have matured to the point where we canstand on our own”, says KCI Konecranes’ presidentStig Gustavson.“We are a crane group with astrong worldwide organisation and a good repu-tation. We start out on this new road with andaggressive approach and strong financial back-ing from Industri Kapital.”

Konecranes world 23

1994 KCI Konecranes brought to market the first fully electro-mechanical 16-wheel RTG (Rubber Tyred Gantry) crane with AC Drives. They were to become a market success. The first fourRTGs were ordered by Georgia Ports Authority (GPA) in Savannah,USA in November 1994.

Jump startAlthough the Group changed pro-foundly in 1994, normal development inoperations continued, with growth andimproved profits in nearly all sectors. Thepayback from the difficult years of thor-ough restructuring that began in theearly 1990s started to show.

24 Konecranes world

Arto Juosila (right) opened the KCI hoist assembly line in Singa-pore in 1992 and appointed Michael Ho (middle) to run thebusiness. 1995 annual hoist volume had grown from 350(1992) to 1,300 units, keeping Kari Utriainen (left), who ran theshop, a very busy man.

The inspired atmosphere was visible also in theartwork of KCI Konecranes Annual Report 1995. US

Crane Services was born in 1984 when Tom Sothard(left) presented his first budget to Chuck Vanarsdall

(middle), Chief Executive Region Americas. Ed Yakos(right) headed modular crane sales.

In short, the restructuring meant replacing inefficientmanual crane building at some 20 factories all aroundthe world with an industrial concept of flexible assemblyshops assembling modular, computer-designed cranesfrom industrially manufactured components. Therestructuring also included a strong emphasis onMaintenance Services. Lastly, the component lines wereupdated, and the Group was set with the most modernand versatile product range in the industry.

In 1995 KCI Konecranes rearranged its reporting tofollow three business areas: Maintenance Services,Standard Lifting Equipment and Special Cranes. Thechange in reporting reflected the restructuring in whichKCI Konecranes reorganised products and operatingunits to conform with customer requirements.

The restructuring set the basis for KCI KonecranesGroup Strategy, where the strategic cornerstones are

growth and efficiency. The principal growth pursuits arethe development of the Maintenance Services businessand acquisitions.

In Maintenance Services, KCI Konecranes saw a gen-uine growth business. Over 70 per cent of all cranemaintenance was still carried out by the crane owner’sin-house maintenance staff. However, new safety rules,technological complexity and the chase for cost-efficien-cy are all factors that support outsourcing of crane main-

Delivered in 1984, Daewoo Shipbuilding was the first Korean shipyard to receive a KONE GoliathGantry crane. It had a lifting capacity of 450 tons and a span of 165 meters. In early 1990s KCI Konecranes share of the global market for Goliath Gantry cranes was close to 80 per cent.

tenance Services. Maintenance services also provides stability tothe business. In times of lowerinvestment into new equipment, agreater interest is taken in main-taining and modernising old equip-ment.

Acquisitions support growth in amature market and growth inMaintenance Services. Havingacquired one company per year onaverage since the 1970s, KCIKonecranes maintained a strongtrack record of integrating newmembers to its organisation.

Going publicWith lean profitable operations and a solid growth strategy, KCIKonecranes (KCI KonecranesInternational back then) became apublicly quoted company in March1996 as its shares started trading atthe Helsinki Stock Exchange. Onlytwo years after their investment inthe company, investors could exittheir positions in KCI Konecraneswith an excellent return on invest-ment. The initial public sale ofshares (IPO) included 8 millionshares, which were sold mostly toinstitutional investors in Finland aswell as outside Finland. The initialoffering price was 68 FIM (approx.11.44 euros) per share. The sale ofshares was a smashing success;shares were oversubscribed 10times, which gave KCI Konecranes avery good start as a listed company.The company’s shareholder struc-ture consisted mostly of institutionalinvestors and close to 90 per cent ofthe shares were held by non-Finlandbased institutional investors.

The KCI cultureThe years just before and immedi-ately after becoming independentwere very turbulent and strenuousfor Konecranes personnel. It meanthard work, both in taking on newduties and a strong personal com-mitment to making KCI Konecranesa success. KCI Konecranes is a com-pany with a clear mission: toreshape the crane industry and

achieve a global leadership position.In pursuit of this goal KnowledgeManagement is a cornerstone.

Reborn in 1994, there wasurgency in communicating the KCIbusiness idea to the people in thefront line units. Training focusedfirst on the service technicians. 1994saw the first group of senior servicetechnicians taking part in theTechtrain program. The trainingfocused on developing and sustain-ing service technicians’ unique set ofskills and instilling the KCI concept.Between 1994-1997, 200 servicetechnicians participated in the two-year program. Having found thebasic outline for the program, thetraining nowadays, is run locally byin-house trainers in different parts ofthe world. The trainers meet twiceevery year to update themselves onnew developments.

Management developmentKCI Konecranes management ap-proach is based on a solid inheri-

Konecranes world 25

tance from its past. The first KCIConference took place in Hyvinkääin 1994, although the first “CraneConference” was held already in1988. The Conference is an annualmeeting where top management dis-cusses strategic issues and has work-shops crossing the business areaboundaries. The Conference hasbecome an important part of net-working in KCI Konecranes.

Once training was in place forthe front line organizations, it wastime to move on to management. Asnew companies every year join theGroup, a high priority is set on intro-ducing newcomers to the corporateculture and instilling the company’svalues: trust in people, total servicecommitment, and sustainable prof-itability.

Since 1997, the KCI KonecranesAcademy forms the core of theBusiness Administration training. Itruns five courses on Konecranesbusiness concepts, employee atti-tudes and managerial skills over a

The annual KCI Conference ends with a tradi-tional Award ceremony, where units are

awarded for outstanding performances. Onthe picture (from left): Matti Ruotsala, Mike

Patritto, Dale Smith and Tom Sothard.

Yrjö Hämäläinen, Headmaster, Crane Institute (standing) andWillem Pelt, Trainer, (right) with one of the trainees.

KCI Conference in Hämeenlinna Finland, 1995.

period of two to three years. In 2004, some 200 personshad graduated from this program and another 200 arecurrently in the process.

Finally, in 2000 a program for prospective top exec-utives providing high-level leadership insights waslaunched. The Lausanne leadership process (LLP) isoperated in co-operation with IMD in Switzerland.

Crane College and Institute“We need people with expertise in particular areas, but

they must also have a good grasp of the entire range oftechnical, business and management skills that arerequired in today’s competitive crane business environ-ment”, says Antti Vanhatalo, Group Vice President,Business Development and one of the few men in theworld who fits that description himself. Not being ableto find a course with these requirements in a universitycatalogue, KONE Cranes looked for a partner willing tocreate and implement such a program.

1988 saw the start of the most interesting and inno-vative “training programs” for crane engineers thatcould lead to a university engineering degree in cranetechnology. This “Crane College” was a joint projectwith the Center for Continuing Education for Engineers(Edutech) of Tampere University of Technology in

Finland. The program is designed to motivate workerswho demonstrate strong potential for career develop-ment and are willing to work hard to fill the gaps in theireducation. In total some 50 persons have graduatedfrom these programs with a Bachelor, a Master or evena Ph.D degree. The creation of this program shows howserious Konecranes is about developing and maintainingthe best work force in the business.

In 1996 KCI Konecranes founded its own CraneInstitute. The Crane Institute is a specialised vocationalschool in crane technology supported by the FinnishGovernment. Today the education at the Crane Instituteis carried out in co-operation with the vocational schoolin Hyvinkää and in other parts of Finland. Over the yearssome 60 crane technicians have participated in this pro-gram.

2626 Konecranes worldKonecranes world

Konecranes world 27

A recession in the crane marketin the late 1990s triggered a newwave of product developmentcovering KCI Konecranes’ entireproduct range. The Asian crisis,

that started in 1997, reduced sales to region Asia-Pacificfrom 20 per cent to 9 per cent of total sales in 1999. Thelower demand especially reduced process and harbourcranes sales to the region. Price competition in the mar-ket increased. To compensate for the lower demand inAsia and to retain its leadership position worldwide, KCIKonecranes increased emphasis on developing new costefficient products and production methods. The higherproduction volumes and access to the latest technologymade several new innovations possible.

In 1999, Konecranes VLC successfully commis-sioned a new innovative Ship Grab Unloader for bulkmaterials mainly used in coal terminals. In 2001 the har-bour and shipyard crane engineering group added thefinal leg to its ambitious R&D programme and launchedan all-new ship-to-shore container crane, the BoxHunter.All designs capitalize on modern computer controls giv-ing maximum handling speed and unique reliability.

The development of a new wire hoist line for lightduty lifting capacities below 100 tonnes started in 1998.

The new wire rope hoist line platform, the CXT (3.2tonnes model), was first launched at the trade fair in2000 in Hanover, Germany and immediately became thebenchmark of the industry worldwide. The new CXT linewould replace the XL, which had been in production forover 10 years.

The CXT design included four major performanceand safety improvements: 1. The world’s most compacthoist design increased the space served 2. A large ropedrum considerably reduced rope wear and hook side-ways travel 3. Stepless speed controls as a standard fea-ture 4. A higher standard duty class. KCI Konecranesproduction volumes had doubled in the last ten years.The new wire rope hoist line was designed for scale pro-duction, cutting some 20 per cent of the manufacturingcosts compared to older designs. The new line enabledphasing out wire rope hoist production at two plants,realising substantial savings.

The new product lines helped KCI Konecranesdefend its sales and margin levels despite overall lowerdemand in the crane market.

The CXT wire rope hoists were first launched in 2000 and immediately became the benchmark of the industry worldwide. CXT Cranes at Rolls Royce, Scotland, UK.

Sharpening the edge

2000

1999 Siemens took delivery of a 300-ton EOT crane at their PowerPlant in Santa Rita, Philippines.

Originally a Norwegian design, the firstMunckloader Shipboard Gantries featuringKonecranes componentry were sold 1996. Thismarket was very active in the late 1990s.

Fully automatedpaper reel storage(KonecranesAutostore) admi-nistration withvacuum lifter cranesat Papierfabrik Palm,Eltmann, Germany.The cranes were delivered in 2002.

Fully-automated coil storage cranes were first deliveredto Alcan Rolled Products, South Wales, UK in 1989.

28 Konecranes world

RTG cranes in operation at APM Terminals in Houston, USA.

Delivery of BoxHunter ship-to-shore container cranes to the Port of Barcelona, Spain in 2003.

Automated Refuse handling cranes, Cleveland Power, Middlesborough, UK.

Nassco (National Steeland ShipbuildingCompany), USA tookdelivery of a 200-tonShipyard Gantry cranein 2002.

27-ton single-legcoker cranes atLyondell CitgoRefinery, Houston,USA (delivery in1996).

30 Konecranes world

Early 1990s Maintenance Services accounted for onethird of Group sales. Since then, Maintenance Serviceshas shown the highest growth rates in KCI Konecranes,fuelling also growth in the equipment related activities.The number of cranes in the service agreement baseshowed continuous growth, with 59,000 cranes in 1992,97,000 in 1996, passing the 150,000 mark in 1998 andexceeding 220,000 in 2002. Feedback from the cranes inthe agreement base has proven to be one of the bestsources of input for new R&D, both in maintenance andcranes. In the 1990s KCI Konecranes also establisheditself as a forerunner in developing new maintenancetechnology.

Growth areasNew growth areas within Maintenance were identified. InFinland, KCI Konecranes already had a strong marketposition in crane maintenance and started to look forgrowth in neighbouring activities. KCI Konecranes start-ed experimenting with service on production machinery.These machines feature similar complexity; they involvethe same basic service skill sets etc. as cranes. MachineTool Maintenance proved very compatible with thecrane service activities and added both scale and growthto the Finnish service operations. In 2000, KCIKonecranes also increased efforts to enter the harbourcrane maintenance market. A separate service unit, KCIKoneports, was established to target the specific needsof this very maintenance intensive customer segment.This business soon started to grow very rapidly.

Today, the maintenance requirements and durabili-ty of industrial products are defined both nationally andinternationally by ISO standards and by various nationalstandards and regulations. KCI Konecranes has played akey role in the development of standards in the craneindustry. KCI Konecranes’ has moved to incorporatenew standards into its products long before their officialrelease. For example, KCI Konecranes was the first tointroduce a condition-monitoring device as a standardfeature in hoists and cranes. Subsequently, this earlyintroduction of modern industrial electronics helpedKonecranes’ customers to realise the benefits that resultfrom being able to implement a preventive maintenanceconcept.

Maintenance is highly dependent on informationprocessing and the business is being transformed bycomputerization and remote data transmission. KCIKonecranes has introduced information managementand diagnostic systems to add efficiency to itsMaintenance activities. In 1998 there was the introduc-tion of Mainman, the Konecranes computer software tosupport preventive crane maintenance, in the USA andEurope. In 1999 the first CART (Crane Analyzing andRecording Tool) was installed on a Special crane fortroubleshooting. CART analyses hundreds of parametersin the crane with extreme accuracy and detects anyirregularities in crane operation. The CART enables

In the 1990s, KONE Cranes began to work seriously on the develop-ment of training programs aimed at making personnel more custo-mer-oriented and service-minded.

Maintenancethinking evolving

Konecranes world 31

service experts based in anotherlocation to access data from thecrane operations and assist the localservice team remotely.

The importance of remote diag-nostics continues to grow as thepace of technological developmentaccelerates. Diagnostic data fromremote sites give our engineersuniquely valuable and timely infor-mation with which to advise cus-tomers about a particular unit’s

KCI Konecranes focus is always on preventive maintenance and elimination of future trouble.The aim is to maximize availability for the equipment while minimizing the overall opera-tional and maintenance costs for the crane owners.

In ports, the core pro-cess is about materialshandling and the craneis the main productionmachine. Therefore,crane maintenancereceives a high priorityin ports. Photo fromthe Port of Kotka,Finland.

The complexity of modern crane technologyrequires highly skilled service technicians,with knowledge both of the mechanical,electronical and computer-controlled featuresof the crane.

maintenance requirements, or evenif a part will need replacing. This canprolong the working life of the craneand avoid unexpected componentfailures. The data also give our R&Dpeople an extremely clear insightinto evaluating future developments.Technological sophistication is of nouse however, if customers aren’twilling to pay for its application totheir specific needs. KCI Konecranesmust be sensitive to signals in the

market and respond quickly toensure that technological innovationis in tune with customer require-ments.

2002 saw the launch of a newinspection tool, CRS (CraneReliability Survey) that analyses theexpected lifetime for each compo-nents and the crane as a whole andresults in an optimum maintenanceprogram for the crane.

KCI Konecranes deliveredthe first steel mill cranes toChina in 1994 to China’slargest steel producerBaosteel. The second orderfor heavy-duty steel millcranes was for ZhujianSteel’s smelt shop inGuaungzhou China in1997. On the picture: Mr.Taisto Järvinen (back thenDirector, Process Cranes)with representatives fromZhuijan Steel at the signingceremony.

Successful entryThe beginning of the 21st century is characterized by a low investment cli-mate in both Europe and North America,and fast growth in Asia-Pacific. China isthe clear growth motor of the world.

32 Konecranes world

Konecranes hoist factory in Shanghai.

Konecranes Chinese logowas part of the marketing

efforts in 2002.

To be part of the China phe-nomenon, KCI Konecranesapplies for full operatinglicenses in China in all itsbusinesses and opens in

November 2002, in record time, its own hoist assemblyfactory in Shanghai.

Konecranes sales activity in China started in theearly 1980’s concentrating mainly on harbour and ship-yard projects through trading houses and agents. EOT(electric overhead travelling) crane business was alsostarted during this time. Orders were mainly receivedthrough Japanese and European main contractors build-ing power plants and related projects. Through thisarrangement Konecranes was at the time by far thelargest foreign crane supplier in China. Konecranes’ firstoffice in China was established in the late 1980’s inShekou to provide maintenance services for the deliv-ered harbour crane projects. In 1997 Konecranes star-ted operations in Shanghai within Very Large Cranes,

2002

Maintenance Services as well as Process and IndustrialCranes.

At the end of 2003, KCI Konecranes was the largestnon-Chinese crane maker in that market. KCI Konecranesnow operated 20 points-of sale in China, under own own-ership, as joint ventures or as contract partners. Inestablishing its network of vendors in China, KCIKonecranes had much help from its former parent, KONE.

Finland’s Minister of Transport and Communications Mr. Kimmo Sasiwith Mr. Stig Gustavson and other members of KCI Konecranes’ topmanagement at the inauguration ceremony of our new hoist factoryin Shanghai (November 2002).

2002 saw thefirst order for hot

metal cranesusing AC tech-nology from aUS steelmaker.

These weredelivered to

Nucor of Texasin 2002.

Orders more than doubled in China in 2003 com-pared to 2002, and Asia-Pacific passed North America asKonecranes’ second biggest market area for StandardLifting Equipment, by number of units sold. Besidesseeking growth, KCI Konecranes saw opportunities forcompetitive global component sourcing in China.

Increasing efficiency globally In the beginning of the 21st century, events such as the9/11 catastrophe in the Untied States, the SARS epi-demic in China and the Iraq war, all contributed to await-and-see attitude in crane investments. Also the cur-rency effects of a stronger euro could no be ignored.Reflecting the world market developments and deter-mined to seek growth, KCI Konecranes began in 2003 toincrease efficiency in its global operations. The renewalof product lines that started in the late 1990s, hadalready given way for new efficient production methods.Now, KCI Konecranes was committed to go one step fur-ther in shifting from traditional own manufacturing tomodern management of own highly automated factories,global assembly plants and a global network of vendorsfor parts fabrication. R&D and product management wasto remain centralised, as also the management of supply,purchasing and logistics.

Consolidation on its wayIn 2004, KCI Konecranes celebrates its tenthanniversary of independence. The Group is young,but we are no beginners. We have been cranebuilders since 1933, when KONE Oy decided todiversify its electrical motor business and started tomanufacture hoisting appliances.

Today, more than 70 years later, the KCIKonecranes Group is one of the world leaders in itsbusiness. In the Western world there is only one othermanufacturer equal in size.

Our operations include a complete range of lift-ing appliances, from lightweight chain hoists with alifting capacity of a few hundred kilograms to heavy-duty industrial cranes lifting up to 1,000 tonnes andhigh performance harbour and shipyard cranes.However, the importance of preventive maintenanceand continuous modernization of equipment hasseen Maintenance Services become our largest busi-ness area accounting for half of Group Sales. Here,too, we have a background of solid experience. Thefirst preventive Maintenance agreement was signedin 1960 and today we perform regular maintenanceon more than 220,000 cranes of different originalmanufacturers.

We work through our own personnel, agentsand partners in more than 40 countries all over theworld. We have global suppliers and assemblyplants of our own on all three continents – in Asia,America and Europe. We have flexible capacity andexcellent cost competitiveness. All our vendors andplants follow the same strict quality standards andprocess procedures. The result is a highly competi-tive crane company.

Equipped with a strong balance sheet, KCIKonecranes is well-positioned to drive the consolida-tion in its industry and grow also through acquisi-tions. A thoroughly modern product portfolio and thegenuine growth business of crane maintenance painta very interesting picture of the Group’s future.

We are proud of our past and we look forward toour future.

Here’s to a new decade of successful operations!

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As one of the very first in its industry KCIKonecranes saw the potential in applying new tech-nology to the old art of building lifting equipment.Being a pioneer, KCI Konecranes had to developmost of the technology in-house. Today, KCIKonecranes has created a solid knowledge base of itsown in modern lifting design. Innovative technologyhas been a driving force behind KCI Konecranes mar-ket success.

KCI Konecranes is actively involved in the devel-opment work and decision making in the followingorganisations: ISO, CEN, FEM, HMI and CMAA. Thelatest international norms and directives of theEuropean community that apply to cranes are aresult of this work. KCI Konecranes also participatesin joint research projects with other industries anduniversities.

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Product launches 1930-2004RemoC • DynAMove Vector 3 CRS - Crane Reliability SurveyBoxHunter • DynA Vector 2 DynAMove Vector 2CXT Wire Rope Hoist • Control Pro DynADriveCW Trolley • DynAReg • DynABus CART–Crane analysing and recording toolAGD-Grab Unloader • DynAMoveXN Chain HoistVacuum Lifter • WGR • DynA VectorRemox • DynA-VRTG – Rubber Tyred GantryInfraxDynAMSWM – Safe Working MonitorDynAHoist • DynACEMS – Electronic Micro SpeedXL Modular CraneEOT-Man software • Markman softwareCU1-Condition monitoring unitXL Wire Rope HoistSM TrolleyACT/ACH Thyristor ControlsUNV Heavy Duty Hoisting trolley UN Wire Rope HoistLV/NT Open WinchKA Thyristor ControlMaintenance ServicesECB – Eddy Current BrakingKNX Chain HoistSN Wire Rope HoistMT Wire Rope Hoist

A winter scenery at theport of Kotka in 2003.

KCI KONECRANES PLCP.O. Box 661

FI-05801 Hyvinkää, FinlandTel. +358 20 427 11

Fax +358 20 427 2099www.konecranes.com