What Buyers Want

The Modi Government has ensured that the construction and equipment industry remains bustling. Ranging from housing to infrastructure development, there is a gamut of projects - the equipment requirement is set to transcend expectations. Prime Minister Narendra Modi has envisaged to provide ´housing for all by 2022´, a $2 trillion initiative. In the water sector, equipment procurement will witness a surge with the government´s Clean Ganga initiative worth Rs 2,037 crore along with the Clean India initiative and toilets in every school and household. The government has also allocated Rs 37,880 crore for the construction of highways and an additional Rs 3,000 crore to boost road connectivity in the Northeast, which will further add to the equipment demand. Ports are also expected to do their bit with the 16 new proposed ports at an outlay of Rs 11,000 crore and the allocation of Rs 11,600 crore for the development of outer harbour port projects. Low cost housing schemes have been alloted Rs 4,000 crore and Rs 7,060 crore have been sanctioned for the creation of 100 smart cities across India. Overall, India is expected to become a haven for construction equipment manufacturers, and in this background, the think-tanks of the construction industry share how their companies will further boost the equipment appetite for the forthcoming year. Devendra Jain Director, Dilip Buildcon ´Currently, we have almost 60 batch-in plants and are procuring almost 20 more. Our current equipment bank is almost Rs 1,200 crore. Of the total equipment purchase, 20 per cent is investment and 80 per cent debt. This financial year, we are going to have procurement plans of almost Rs 1,700 crore and most of the procurement will be done for road projects. We mainly specialise in road projects. However, at present, we have one dam project worth Rs 500 crore and a Rs 1,000 crore canal project in Madhya Pradesh. We are also carrying out projects in the irrigation and water supply segment. Of the total amount, we are investing about Rs 4,000 crore in road projects and the remaining Rs 2,000 crore in irrigation and water supply projects. We are also continuously bidding for EPC contracts of NHAI and MORTH.´ Bollineni Seenaiah Managing Director, BSCPL ´We have bagged almost Rs 20,000-25,000 crore worth of tenders in the past two months. In terms of equipment, our requirement is not much as we had acquired it around five years back. But, if we get an additional Rs 3,000 crore work, then the need to procure equipment will arise. We normally buy the required equipment and invest almost Rs 600 crore annually on procuring the same. There are many upcoming projects related to National Highways, state highways, Railways, etc. We hope that in another one to two years´ time, approximately Rs 100,000 crore worth work will be floated across sectors. That said, a lot of construction equipment will be required.´ K Satyanarayana Vice President & Head CS, Tata Projects ´Our upcoming projects range from commercial or residential building projects, metro rail projects, power plants, steel plants, bridge works and hydro power projects. Our construction equipment requirements for the coming year include batching plants of capacity 30 cu m per hour, batching plants of capacity 60 cu m per hour, transit mixers 6 cu m per hour, boom placer 90 cu m per hour and 36 m height, fixed tower cranes 80 m height and 50 m jib length - 1.5 tonne tip load, builder or material hoist-1 T payload capacity, passenger hoist-1 T capacity, system formworks for building and special industrial structures, scaffolding or staging material, spray plastering machines, crawler cranes of capacities ranging from 40-650 tonne, hydra cranes - 15 tonne ( F 15 type), laboratory equipment, survey instruments and diesel generators from 40 KVA to 250 KVA. We have a process in the organisation to hire or lease or buy the equipment based on asset vs. turnover ratio, repeatability of usage, cost benefit ratio etc. and accordingly we balance these three options.´ Vikram Sharma Managing Director, Supreme Infrastructure ´For the coming year, we are looking for marine equipment such as jack-up barge, road equipment, mainly earthmoving and transport equipment such as tippers, crushers for the enhancement of our existing units abroad. We have got some running marine projects and water pipeline projects in Maharashtra. Annually, the company spends approximately Rs 10 crore to Rs 15 crore depending on the project requirement and feasibility of owning or leasing. However, we are looking at a mix of both buying and leasing equipment.´ Paresh Mehta CFO, Ashoka Buildcon ´Major projects will come up in the next two quarters. We are sufficient as far as construction equipment is concerned; we might require to spend another Rs 10-15 crore more. We are already in the process of acquiring equipment worth Rs 25 crore, and annually, we generally invest around Rs 25-50 crore in procuring construction equipment.´ Shobhit Uppal Deputy Managing Director, Ahluwalia Contracts ´At present, we are executing building projects, which includes all types of buildings; residential, hospital, institutional, metro station and metro depot, hotel, and commercial complex. For our nature of construction, we require equipment such as tower cranes, batching plants, concrete pumps, and transit mixers, etc. As per our past track record, we have always purchased construction equipment. In the last six months, we have purchased nearly Rs 6 crore worth of construction equipment for our ongoing and new projects.´ Rama Subramanian General Manager, KNR Constructions Ltd ´In the first quarter of 2015-16 in Andhra Pradesh, we are executing a Rs 800 crore worth road project covering a distance of 80 km. We look forward to bagging more projects as we can deploy directly. Also, the company has been doing well in road-based construction and will invest Rs 120-150 crore in equipment purchase. This will include the purchase of tools and attachments, etc. While the trend is to lease certain equipment, we generally buy equipment.´ Jayant Sarkar Senior Vice President & Head-Construction, Technip India ´At present we are gearing up for a major construction project - Onshore Gas Terminal for ONGC at Kakinada. Scope of construction work includes site clearance, levelling comprising of cutting and filling earth, entire civil, structural, mechanical, electrical and instrumentation work on EPC basis. We work on a long-term basis with specialised sub-contractors. These sub-contractors mobilise their own construction equipment. Technip does not invest in equipment for on-shore projects. The company makes the necessary capital investments worldwide in spool-bases, manufacturing plants, construction yards and vessels for off-shore and subsea projects. Present in 48 countries, Technip has state-of-the-art industrial assets across five continents and operates a fleet of 21 specialised vessels for pipeline installation and subsea construction.´ Rakshak Singhvi Head (Procurement), Sadbhav Engineering Ltd ´There has been a steep growth in our businesses during the last three to four years. As the government policies are changing and more facilitated for an infrastructure organisation, we expect better flow of projects in mainstream and innovative sectors like bullet trains, sky bus, smart cities, etc. We expect a steep hike in our machinery and materials procurement during the next financial year to meet our fast growing requirements and challenges. We are into the road, mining and irrigation sectors; recently, we started working on the Mysore-Bellary road project, Jodhpur-Panchpatra road project; Kapurdi-Jalipa (Barmer) mining project, Bhanpura canal works and are expecting some huge projects during the next couple of months. During the next acquisitions, our major equipment requirement will be mining excavators (40-60 tonne), dump trucks (30-50 tonne), paver finisher (5.5 and 9 m), grader (200 Hp) and dozer (300 Hp), hot-mix plant, micro-surfacing machine, crushers, concrete equipment.´