'L&T's Construction Equipment business has performed quite well during 2017, with good traction and growth. We have been successful in bagging many project orders for Komatsu and L&T equipment, and are upbeat on another successive year of growth,' says Arvind K Garg, Executive Vice President & Head, Construction & Mining Machinery, Larsen & Toubro, and President, ICEMA. He shares more...
Market scenario: Presently, the road sector offers immense opportunities for construction equipment, driven by the impetus from the Central Government on increasing the pace of road construction to beyond 30 km per day. Railways is another growth sector for our industry. In the southern states, major irrigation projects are on the anvil, which promise good offtake for the construction equipment. On account of ban on river sand mining, we have witnessed a number of quarries opening up across states. This will prove to be a good demand driver for the growth of the equipment market. The Bharatmala project, championed by the Government of India, will also provide a huge opportunity for us to grow.
Current trends: Apart from the focus given on road sector, Government of India is also working on development of smart cities, the Sagarmala project and improving airport connectivity to smaller towns. There is a lot of optimism attached to the river linking project and dedicated rail corridors. L&T has launched a range of vibratory compactors in early 2016 with a view to expanding its product offering in the road segment. At Excon, we launched new models of machines for the road sector, viz, skid steer loader, pneumatic tyred roller and hydraulic paver helping us in our endeavour of providing comprehensive solutions to our customers. Technologies such as telematics and intelligent machines have immensely helped in increasing the productivity and efficient utilisation of machines, and we are aggressively moving in that direction. Localisation, in line with Make in India, in my opinion, will drive expansion of employment opportunities and specialisation of sector skills.
We are spearheading various training initiatives under Infrastructure Equipment Skill Council to enhance the skill levels of Operators and Mechanics, in line with the Skill India initiative.
Reforms and growth: The year so far has been good for the industry, though demonetisation did have a marginal impact on the business, for some time. There was a huge upsurge in demand pre-GST introduction, but the rates have now been rationalised for a majority of construction equipment; the ministry and policy makers have been very supportive in this respect. The system has become transparent, and that has been a boost for the industry. We are currently projecting a CAGR of around 10-13 per cent over the next three to four years, but we have to now see whether the government's focus on infrastructure development can boost growth further. India is one of the bright spots across the globe for infrastructure development and in my view, the industry and our customers have to work closely to scale up with speed.