WHILE many contractors have ditched their plant divisions and are outsourcing their equipment needs, Ray O'Rourke has invested heavily in Laing O'Rourke's Select Plant Hire.
In the 2004 financial year hirer Select had sales of £140 million - only Hewden and Ashtead topped it.The plan is to become the biggest: sales of £180 million are forecast for the current financial year - that is a year-on-year leap of more than 25 per cent, and six times the turnover of three years ago.
Select has got to where it is for two main reasons.One is a healthy order book from its parent company's contracting operations on projects such as Heathrow's T5. But the real secret behind its rapid growth, according to a senior colleague, is Ray O'Rourke's anatomy.
'Ray O'Rourke has balls like an elephant, ' his colleague says.'Who else would spend £50 million a year on new plant?'
Mr O'Rourke knows how to get a good deal - after all, he picked up Laing for £1 in 2001.At Bauma this year he ordered 68 large tower cranes and 13 all-terrain mobile cranes (up to 250-tonne capacity) for £15 million.
Select Plant Hire today owns nearly one in three of all topslewing tower cranes in the UK. Its fleet has grown in the past six years from next to nothing to about 330 units, ahead of the next largest player, HTC's 200-plus.
Select's tower fleet has grown partly by acquisition, taking on Liebherr cranes from Laing's EPL division and Peiners from Baldwin's Delta subsidiary. But mostly it has grown through purchases, all of which have been from Terex's Italian operation Comedil. Since 1999 Select has been the UK and Ireland distributor for Terex Comedil, a deal engineered by Mike Studd.
Mr Studd is the former boss of Hewden Tower Cranes, which used to deal in Comedil and used equipment, and is now running Select's tower crane operations.
Mr Studd is in a curious position: he is not a director but attends board meetings with Paul Collins, the managing director of Select Plant Hire.Mr Studd is a consultant but his experience has been central to the growth of Select in the crane business.
Select's tower crane fleet has an average age of less than four years and most cranes are less than two years old. Some 70 per cent of the fleet is Comedil-built, 20 per cent Peiner and 10 per cent Liebherr.The number of Comedils goes up monthly. Select's fleet has many larger-than-average cranes. Select's prize project is Heathrow Terminal 5, where it has up to 32 tower cranes on site - the number fluctuates as cranes are moved around. Just starting up is Grosvenor Estates' Paradise Road project, where Select will have about 25 towers on site, and the Ascot racecourse refurbishment.
It has 49 cranes in Dubai, including 45 on the new airport there.All of these are Laing O'Rourke projects, which represent around 60 per cent of tower crane turnover for Select. But Select is also 'busier than ever'according to one employee, on projects for rival contractors. Skanska, Wilson Bowden and Wates are regular customers. Bovis, significantly, is not. But Select is supplying cranes to a subbie for Bovis's Drakes Circus project in Plymouth.
As Comedil's UK and Ireland distributor, Select claims to have sold about 30 new cranes in the past 12 months, a better record than other manufacturers with direct sales forces.
The growth of Select's tower crane fleet continues. Since the Bauma order, which included 10 units of the CTT 561, Select has placed an order for five more CTT 561s - some of which will go to Ascot - and 15 CLT 180s, a new type of Comedil luffer.
Select's plant interests go beyond tower cranes. It has about 140 excavators - the majority are Caterpillars - plus concrete pumps.
It also has approximately 30 crawler cranes, two-thirds of which came from Laing subsidiary EPL and one third that have been bought since the Laing takeover.A 100-tonne capacity Liebherr crawler was bought for the Manchester stadium project a couple of years ago, for example, and more have been added for T5.
In mid-2003 Select moved into mobile cranes.Many contractors own plant, crawler cranes or even tower cranes - though few, bar Kier, seek to participate in the open hire market as Select does. But, bar the odd ancient Iron Fairy or yard crane, no other UK main contractor runs a fleet of mobile cranes.
Mobile crane hire operates in the UK on a taxi basis with operator-supplied kit - this is distinctly different from other types of plant hire.
In July 2003 Select took delivery of its first seven all-terrain telescopic mobile cranes - all Terex-Demag models.
Select has 22 all-terrain mobile cranes, including five 200tonners and a new 250-tonne capacity Terex-Demag AC 250 with an 80 m main boom.
Construction News reported an incident in August when Select sent a mobile crane out to dismantle a tower crane only to find that its boom was too short. Some observers believe Select was simply unlucky in that a minor cock-up reached the public gaze. But many were not surprised by the report.When hiring outside mobile cranes, Select would often try to haggle for a smaller telescopic crane to be sent, since it would be cheaper, rivals say.
'When we used to supply cranes to them, they would always argue for a smaller crane, ' says one crane hire boss.'It has bitten them before. But I find it surprising that they would send the wrong crane for one of their towers.'
There is no doubt that Select has its suspicions about the mobile crane hire community and is sensitive to paying over the odds for anything. Its motive for buying mobile cranes, at least in part, was to avoid rip-offs.
Select says it did not go into mobile cranes to go into competition with Ainscough and other major mobile crane owners. Building a mobile crane fleet was seen as good housekeeping rather than a diversification.At the time, Select was spending about £5 million a year on hiring telescopic mobile cranes to erect and dismantle its tower cranes.Most of this was with Ainscough, Select's supplier of choice.Typically, Select was hiring 14 mobiles a week in the 150 tonne to 200tonne capacity range.
Select knew that the first delivery of mobile cranes last year would not be enough for its internal needs.The line then was that having some in-house capability would make it easier to manage the peaks and troughs of activity and keep costs down.
This year's expansion of the mobile crane fleet has been driven by two factors: other mobile crane hire companies are pushing up their rates (or trying to); and Select can turn a decent profit hiring its mobile cranes to outside customers when neither Laing O'Rourke nor the tower crane division has any requirement.
The story has changed.The mobiles are not just for internal use any more but are starting to be aggressively marketed. It is likely that Terex-Demag will be receiving another substantial order before long.