ORIX Leasing Pakistan

Revised Project Report

Access Equipment Rental Aerial

Working Platforms
______________________________________________

Prepared by
Farooq Irfan
Mir Faraz Tariq
Mahreen Rajan

Table of Contents

Acknowledgement

Executive summary

Introduction to Access Equipment

Orix relevant Access Equipment details

Industry Analysis

Supplier Power

Buyers Power

11

Financial Feasibility of the Project

13

Assumptions

15

Conclusion

16

Appendix

17

ORIX Leasing Pakistan

ACKNOWLEDGEMENT

First & foremost, we would like to thank the entire Operating Lease Department, especially Mr.
Zeeshan Hammad, for their confidence in our abilities, their co-operation and assistance all
throughout our rotation period- without which further development on the existing project
seemed a daunting task.
Secondly, we would like to thank our fellow MTOs Hassan, Hussain & Mir Faraz (who is also
a part of this team) for the basic ground work and the solid basis they left for us to pursue further.
And lastly, we would like to our contact persons & organizations:

Mr. Syed Ali Nasir & Mr. Jaffer Fabricon Pvt. Ltd.

Mr. Kashif Tash International

Mr. Naeem Aziz- Global Technologies

Mr, Mohammed Sarwar- Mesec

Bilal Engineering Pvt. Ltd.

Dyconix

Focus Humanitarian Assistance, Pakistan

Sincerely,

Faooq Irfan
Mahreen Rajan
Mir Faraz Tariq

ORIX Leasing Pakistan

Executive Summary

The main objective of the report was to help Operating Lease identify the suitability of access
equipment rental as a prospective diversification segment. Our job was to build upon the work
done by the previous group.
Access equipment is a category of equipment used to reach high end inaccessible areas where
access through normal ways is not possible. Like reaching roofs of big warehouses for repairing
purpose or reaching out high end floors of any building for maintenance purpose, for
maintenance for bridges, high extension wires and a lot others unreachable areas. The focus of
our research lay upon Aerial Working Platforms- scissor lifts specifically. There are several
distinct types of aerial work platforms, which all have specific features which make them more
or less desirable for different applications. The key difference is in the drive mechanism which
propels the working platform to the desired location. Most are powered by either hydraulics or
possibly pneumatics.
The Access Equipment industry has suppliers both in the organized and the
unorganized(informal) sector. Coming first to the formal sector, we can further subdivide it into
manufacturers, registered official dealers & agents. Although these manufacturers are still
working at a small scale, but the fact that they are locally producing such equipment shows the
business promise of this sector. Our focus remained on the suppliers & manufacturers of
hydraulic scissor lifts. During our research we also came across information on the presence of
suppliers (especially of used equipment) on Punjab side (Sialkot) but due to time constraints we
were unable to pursue it further.
On the other hand, we also have the informal sector dealers concentrated in the Sohrab Goth &
Mauripur areas in Karachi. The informal sector usually deals primarily in various types of Cranes
& scaffolds. The informal sector does not offer a wide variety of product options as they usually
have a parked fleet. There are certain agents in this sector who import equipment through
informal channels we also found an informal dealer working with the name of Ali Corporation
who had provided a Sky lift to the Clifton Cantonment Board.
The Potential market of access equipments in Pakistan is basically divided into two sectors; the
private sector and the government sector. The private sector is further branched into the three
following categories like Plant maintenance, airports, warehousing etc,
Given the financial analysis and the market opinion that was gathered over the duration of our
report, we see great potential in the sector especially in terms of scissor lifts available for rental
purpose.

ORIX Leasing Pakistan

Introduction to Access Equipment

It is a category of equipment used to reach high end inaccessible areas where access through
normal ways is not possible. Like reaching roofs of big warehouses for repairing purpose or
reaching out high end floors of any building for maintenance purpose, for maintenance for
bridges, high extension wires and a lot others unreachable areas.

Some commonly used access equipment includes

Cargo lifts
Boom lifts
Self Propelled Lift
Truck and Trailer Mounted Lift
Hydraulic Scissor Lift
Scaffolds,
Hydraulic Platforms

Usually usage of these equipments is temporary so some customers usually prefer to get it on
rent rather buying it, but in construction companies they prefer buying it due to usage for longer
period of time. Buying or rental decision is based on nature and duration of work.
These equipments are of high importance and have high demand in western and other developed
countries. In markets like USA, UK, Australia and UAE, these equipments have high usage due
to tall building and big infrastructure.
In our society most of these works are done in an unsafe and in efficient manner. The labor
performing these tasks is not aware of its consequences and even if he is, he does not care about
it.

Orix relevant Access Equipment Details

ORIX Leasing Pakistan

Aerial Work Platform Category

Through the course of our research we found out that Aerial Work Platforms are the best suited
equipment for Orix to start off its Access Equipment rental business with. An aerial device or
elevating work platform is a mechanical device used to provide temporary access for people or
equipment to inaccessible areas, usually at height. These two distinct types of mechanized access
platforms may also be known as a "zoom boom" or "cherry picker" (both regional terms for
aerial device); or "scissor lift" (the universal North American term for elevating work platform).
They are generally used for temporary, flexible access purposes such as maintenance and
construction work or by firefighters for emergency access, which distinguishes them from
permanent access equipment such as elevators. They are designed to lift limited weights (usually
less than a ton, although some have a higher safe working load (SWL), distinguishing them from
most types of cranes. They are usually capable of being fully operated (including setup) by a
single person.
Regardless of the task they are used for, aerial work platforms may provide additional features
beyond transport and access, including being equipped with electrical outlets or compressed air
connectors for power tools. They may also be equipped with specialist equipment, such as
carrying frames for window glass.
Lifting Mechanisms:
There are several distinct types of aerial work platforms, which all have specific features which
make them more or less desirable for different applications. The key difference is in the drive
mechanism which propels the working platform to the desired location. Most are powered by
either hydraulics or possibly pneumatics. The different techniques also reflect in the pricing and
availability of each type.
Boom Lifts or Aerial devices
They were once exclusively operated by hydraulic pistons, powered by diesel or gasoline motors
on the base unit. Lightweight electrically-powered units are gaining popularity for windowcleaning or other maintenance operations, especially indoors and in isolated courtyards, where
heavier hydraulic equipment cannot be used. Aerial devices are the closest in appearance to a
crane- consisting of a number of jointed sections, which can be controlled to extend the lift in a
number of different directions, which can often include 'up and over' applications.
This type of AWP is the most likely of the types to be known as a 'cherry picker', owing to its
origins, where it was designed for use in orchards (though not just cherry orchards). It lets the
picker standing in the transport basket pick fruit high in a tree with relative ease (with the jointed
design ensuring minimum damage to the tree). The term 'cherry picker' has become generic, and
is commonly used to describe articulated lifts (and more rarely all AWPs).
This type of AWP is now widely used for maintenance and construction of all types, including
extensively in the power and telecommunications industries to service overhead lines, and in

ORIX Leasing Pakistan

arboriculture to provide an independent work platform on difficult or dangerous trees. A

specialist type of the articulated lift is the type of fire apparatus used by firefighters worldwide as
a vehicle to provide high level or difficult access. These types of platforms often have additional
features such as a piped water supply and water cannon to aid firefighters in their task.
Some articulated lifts are limited to only the distance accessible by the length of each boom arm,
however, by the use of telescoping sections, the range can be vastly increased. Some large
hydraulic platforms mounted on a lorry can reach heights of over 100 metres.
The majority of articulated lifts require a wide supportive base to operate safely, and most
models have extending legs/struts to help accomplish this. These legs can be manual or hydraulic
(usually depending on size and price of the machine). Some AWPS are classified as 'spiders' due
to the appearance of these legs. Spiders are also available in especially compact form, to fit
through doorways for use inside buildings.
A Scissor Lift is a type of platform which can usually only move vertically. The mechanism
to achieve this is the use of linked, folding supports in a criss-cross 'X' pattern. The upward
motion is achieved by the application of pressure to the outside of the lowest set of supports,
elongating the crossing pattern, and propelling the work platform vertically. The Platform may
also have an extending 'bridge' to allow closer access to the work area (because of the inherent
limits of vertical only movement).
The contraction of the scissor action can be hydraulic, pneumatic or mechanical (via a leadscrew
or rack and pinion system). Depending on the power system employed on the lift, it may require
no power to enter 'descent' mode, but rather a simple release of hydraulic or pneumatic pressure.
This is the main reason that these methods of powering the lifts are preferred, as it allows a failsafe option of returning the platform to the ground by release of a manual valve.Almost every
retail or manufacturing concern will eventually be making use of some type of scissor lift
equipment. For starters the scissor lift equipment is initially a form of Aerial Working Platform
which is a device that is used to provide temporary access for people or equipment to
inaccessible areas, usually requiring access to high or elevated areas and also providing lift for
materials or loads. Scissor can also be mobile elevated work platforms which can be a type of
working platform that can be moved along the ground while it is extended. For manufacturing &
retail industry almost all sorts of scissor lift equipment deal in lifting, moving, positioning and
handling heavy loads and can reduce the need of less people to do the lifting and bending.
Scissor lifts are categorized by the loading capacity, table sizes, how much it costs and their
specific features for specific functions. Certain scissor lifts have the lift function for loading and
un-loading. The powered scissor lifts usually have heavier loading capacity. The Electric battery
powered Scissor Lifts are usually used for internal uses and light external uses. For heavy duty
external use, the diesel/gasoline powered Scissor Lifts are used. The lift capacity of scissor lifts
ranges between 230 kg to more than 50,000 kg.
AWPs are often bought by equipment rental companies, who then rent them out to construction
companies or individuals needing these specialized machines. The market for these machines is
known to be marked by especially strong boom and bust cycles.

Industry Analysis

ORIX Leasing Pakistan

SUPPLIER POWER
Supplier Dynamics:
The Access Equipment industry has suppliers both in the organized and the
unorganized(informal) sector. Coming first to the formal sector, we can further subdivide it into
manufacturers, registered official dealers & agents. Through the course of our research work we
found out that this type of equipment is being manufactured by certain players locally. The
following is the list of players in our market who we were able to track down during the course
of our research.

Manufacturers:1

Fabricon Pvt. Ltd (Fablift-Hydraulic Scissor lifts)

Refer to the Appendix for details of individual companies and their products.

ORIX Leasing Pakistan

Tash International(AWPs)

Bilal Engineering(Truck mounted Boom Lifts)

Dealers/supplier:

Global Technologies Genie

Abaseen International variety of brands

Mesec

Ahbab Associates

Although these manufacturers are still working at a small scale, but the fact that they are locally
producing such equipment shows the business promise of this sector. Our focus remained on the
suppliers & manufacturers of hydraulic scissor lifts. During our research we also came across
information on the presence of suppliers (especially of used equipment) on Punjab side (Sialkot)
but due to time constraints we were unable to pursue it further.
On the other hand, we also have the informal sector dealers concentrated in the Sohrab Goth &
Mauripur areas in Karachi. The informal sector usually deals primarily in various types of Cranes
& scaffolds. The informal sector does not offer a wide variety of product options as they usually
have a parked fleet. There are certain agents in this sector who import equipment through
informal channels we also found an informal dealer working with the name of Ali Corporation
who had provided a Sky lift to the Clifton Cantonment Board.
Truck-mounted Boom Lifts:
Bilal Engineering is manufacturing power boom lifts which are mounted on base
trucks(Hino/Isuzu/Master). Bilal Engineering has provided us with rough price estimates of the
equipment which costs aroundRs.1.3 million(13 metre reach - Excluding the base truck cost).
The minimum life of this equipment is around 10 years. The overhauling is done after 4 years on
average. The approximate cost of overhauling is around Rs70,000 to 80,000. The actual figures
will be provided to us by Mr.Bilal(CEO-Bilal Engineering by 12th January 2010.)
Construction Industry Alliance:
The construction giants working in Pakistan e.g. Paragon Group, ACL group etc, have purchased
their own construction-related access equipment(tower cranes, mobile pumps, lifts, scaffolds)
which is not only utilized at their own ongoing projects(TCL Tower Project by ACL and Sofitel
by Paragon) but in fact its also being utilized by smaller construction companies. Mr.Arshad
(Project Manager, Paragon Group) was of the opinion that for big construction groups taking
equipment for rent is not feasible due to the extensive use and access to various credit lines and
the high rents potentially tend to cover the equipment price within 2-3 years. But he said that the

ORIX Leasing Pakistan

small construction companies do prefer to take this equipment on rent due to capital constraints.
His opinion on the high margins on rentals was also shared by Mr. Jaffer at fabricon Pvt. Ltd.
Impact of Inputs on Cost:
The cost currently depends on the channel of purchase utilized. The official dealers obviously
enjoy a slight price advantage over the other agents. But globally, manufacturers usually are very
flexible in providing equipment to any credible agent that contacts them, hence this slight cost
advantage of official dealers tends to be insignificant. Access equipments cost also depends on
its country of origin, equipment is being manufactured in various countries but the best brands in
terms of quality are the German brands. On the other hand, Chinese brands offer the cheapest
prices. The element that stimulated local production is the saving of the elaborate shipping costs
which then can be reflected in lower prices. But the local brands have still not earned a sound
reputation in terms of quality.
Threat of Forward Linkage:
There was a time when official dealers like Ahbab Associates and Global Technologies were only
into the selling of Access Equipment, but due to the changing market dynamics and recessionary
pressures, more and more dealers are moving towards the concept of renting out equipment. So,
a few years back the players who could be Orixs partners in the Access Equipment venture
might prove to be fierce competitors now. Secondly, there is another threat of local
manufacturers, like Fabricon and Tash International to start off with their own renting agency
offering some installment packages/rental package. In fact, fabricon has already ventured into
rentals whereas Tash, right now, claims not to want to opt for the rental market. The larger
construction giants like Paragon Group & ACL who own their own construction-related access
equipment have already started renting their equipment to smaller construction players in their
off-periods.
Importance of Volume to Supplier:
The importance of volume is quite substantial for suppliers in differing ways. If more equipment
is rented out, and hence the equipment demand is on the higher side, eventually the local
manufacturers can achieve economies of scale. In the case of dealers, the more volume they
achieve, the more quickly they recover the asset cost & minimize the relevant risks. But in the
current market state, the volumes are on the lower side as this market still needs to be
aggressively tapped.

Buyers Dynamics
The Potential market of access equipments in Pakistan is basically divided into two sectors; the
private sector and the government sector. The private sector is further branched into the three
following categories:
ORIX Leasing Pakistan

10

Plant & Building Maintenance: Recently we have witnessed tall building mushrooming in
Karachi and they require building maintenance services. Unfortunately most of these buildings
use traditional ways of accessing in-accessible areas like Jhola. But this trend is changing , as
mentioned by Syed Ali Nasir-Director Sales that PSO has already purchased a hydraulic scissor
for the Maintenance of PSO House( govt. Institutions usually buy equipment rather then going
for rentals). MCB has already taken the fablift(hydraulic scissor) on rent from Fabricon Ltd.
Hence the building maintenance segment does offer a promise. Coming to the Plant maintenance
segment; we contacted players providing Plant Maintenance Services like Pak-Arab
Engineering, Jaguar Pakistan, AMS Engineering, Dyconix Plant Maintenance. Through these
players we got to know that usually large manufacturing concerns e. Engro, FFBL, GSK etc.
following strict quality certifications( e.g. ISO 9001) usually have annual inspections of their
facilities to ensure compliance with the given standards. These inspections usually require
Aerial Working Platforms. We also came across a tender by OGDC for the order of 3 hydraulic
scissor lifts intended to be used in the Indoor/Outdoor Maintenance Works at its Oil & Gas
Processing Plants.(Hence we assume that being a Gevernment firm, OGDC is inclined towards
buying this equipment but in the case of the Private Sector in the Oil Exploration/Refining
Segment many players will be intended towards renting AWPs) As Karachi has several such
Plants, the business potential is quite promising.
Ware housing and freight handling: There are a number of warehouses which require various
sorts of access equipment that can make their work much faster and more efficient. Giant stores
like Macro and Metro also require a smaller range of access equipment to store their inventory
on shelves and transfer goods from one part of the store to another.
Airports: There is always need of access equipment at the ports for maintenance purposes and
for handling transfer of goods. Often inaccessible places like high roofs or low areas require such
equipment to facilitate the skilled personal to perform the specialized jobs. During the meeting
with Mr.Kashif(Marketing Manager)-Tash International, we got to know that airport services
companies like Shaheen Airport Services does use access equipment for providing their
services, hence they can be one of our potential clients. The initial assumption that airport-related
services fall totally under the Government was exactly not true. Hence we can tap the
opportunities in the private sector dealing in airport-related services.
Disaster Recovery and Rescue: Fire brigade in Pakistan is poorly equipped and can hardly cater
to the needs of the nation. In case of fire or other national calamities, these forces can provide a
very limited help. Unfortunately there is no concept or capacity of rescue in Pakistan. With
introduction of various access equipments to their fleet, the overall performance can be
enhanced.
SUPARCO Pakistan Space and upper Atmosphere Research Commission: Recently
SUPARCO released a tender stating a need for a hydraulic scissor. They also use access
equipments for their day to day operations. A copy of the tender is attached in the annexes of the
report.
USAGE OF THE ACCESS EQUIPMENT: As the nature of usage of access equipment is
temporary, the average max. working hours for an equipment like hydraulic scissors & boom
lifts is around 2-3 hours daily. Hence that makes it to around 700-900 hours per year. The basic
operations expenditure heads for AWPs is the Engine Oil which usually costs around Rs.125

ORIX Leasing Pakistan

11

per litre(20 litre usage for every 400 hours of usuage for a 40ft/0.5 ton Hydraulic Scissor), and
the replacement of hydraulic filters after every 800 hours usage which costs around Rs.800-1000.
Due to the nature of the usage, where equipment is required for limited time periods, taking this
equipment on rent is a pretty feasible option.

Financial feasibility of the Project

ORIX Leasing Pakistan

12

ORIX Leasing Pakistan

13

ORIX Leasing Pakistan

14

Assumptions
1. The revenue figure is based on the Rental figure PKR 100000/month provided by
Fabricon Pvt. Ltd.
2. Depreciation is calculated based on the formula:
Cost of the fixed asset Residual value

* actual number of hours

Estimated total number of hours

3. The scissor lift will be rented out all year round.
4. O & M is calculated as per the share of the asset manager.
5. The profit sharing will be carried out on a 60:40 basis; with 60% being Orixs share in the
venture.
6. The cost figure is based on the per unit cost provided by Fabricon Pvt. Ltd.

ORIX Leasing Pakistan

15

CONCLUSION

In view of the extensive untapped potential of the Aerial Working Platform(AWP) Equipment
consisting of the Scissor Lifts & Boom Lifts, we recommend that this access equipment type
best suits to the local Access Equipment Rental Market. This inference is made on a twopronged basis; firstly considering the financial feasibility; secondly, the extensive usage potential
of AWPs & thirdly, the temporary nature of the usage of this asset which makes it ideal for
rental purposes.
Given the financials, the unit gives a ROA of 50.35% in the first year that increases sequentially
in the following years. At the same time, the project gives an IRR of 134.74% throughout the
span of the machines life.
We hope to see the project come to life!!!!

ORIX Leasing Pakistan

16

Appendix

ORIX Leasing Pakistan

17