Focus

Falling Short on Earthmoving Machines

March 2019
While vendors are lining up earthmovers for companies engaged in infrastructure projects and mining, users attest to the shortcomings of Indian brands.

About 60,000 earthmoving units were sold in 2018, according to Nischal Mehrotra, Director, Sales & Marketing, LiuGong India. 
“The construction of highways was a key driver of this growth.”
“Road construction was the key driver of the construction equipment market in India in 2017 and 2018,” says Dimitrov Krishnan, Vice President and Head, Volvo CE India, who sees this trend continuing in the future.
“Hamm soil compactors have been driving strong demand in the past three to four years,” says Ramesh Palagiri, Managing Director and CEO, Wirtgen India. “We expect this momentum to continue, considering the road projects under execution, projects currently being bid for and the Bharatmala project in future. Opportunities in the roads 
sector should be good in the coming years provided we have a stable government after the national election.”
“Allocating the budget to build 35,000 km of roads under Phase-1 of the Bharatmala project along with allocations for urban rail and airport expansion projects will boost demand for earthmoving equipment,” says Krishnan.
“National highways, state highways and dedicated freight corridors are the major projects in the pipeline,” says Mehrotra, citing the Char Dham Mahamarg Vikas Pariyojna, Delhi-Nagpur Expressway, Delhi decongestion plan and Delhi-Mumbai Industrial Corridor as examples.
“Many mega projects have been recently awarded and some six and eight-laning projects are coming up in the next few months, like the Poorvanchal Expressway, Samridhi Expressway, Ganga Expressway and Delhi-Vadodara Expressway,” observes Ashim Paul, Plant & Machinery Head, Adani Transport. He believes such projects will spur demand for earthmoving equipment in the next few years.
“Investments in infrastructure, in particular roads and highways, and regular bidding for projects, real-estate development and growth in mining are crucial drivers for earthmoving equipment,” 
says Ajay Aneja, Brand Leader, CASE India.

Mining as a demand driver
Over the course of the next three to five years, Krishnan expects the mining industry to grow at a CAGR of between 5-7 per cent. In this sector, he sees opportunities for growth in coal because the government is opening coal mining to private companies. “Even though it is still in the early stages, these projects will increase production capacity,” he says. 
Turning to iron mining, he adds, “Over the past few years, production has been lower but we expect the government to address legal bottlenecks, which should lead to higher production volumes in India.”
Palagiri agrees that steady growth in the coal sector and some signs of revival in the iron ore segment will also drive demand.
Krishnan is also expecting further development in the irrigation segment and increased demand to upgrade and expand sea ports.

Indian vs. overseas brands
Indian brands of earthmoving equipment are making inroads in the market but still do not measure up to machines from global brands like CAT, Wirtgen and Vogele, says Pramod Joshi, Deputy General Manager, P&M Operation, 
JMC Projects India. “Machines from overseas brands are more expensive to buy but make up in higher productivity and lower maintenance cost, besides performing more accurately.”
“We are engaged in reputed four to eight-lane expressway projects that need heavy and quality machines,” says Paul. “We usually prefer compactors, pavers, 
graders and excavators from 
global brands as they are more accurate, productive and meet the NHAI codes specified for equipment.”
“The lack of quality of products made in India relevant for the requirement has led to demand for foreign alternatives, Chinese or Italian machines that can fit contractors’ RoI target,” agrees Manish Arora, Business Head, Mahindra Construction Equipment.
“Volvo CE is heavily focussed on productivity and lowering the cost of operations, or cost per tonne, for customers,” says Krishnan. “A big contributor to this is fuel efficiency. It’s not unusual for a Volvo CE customer to report fuel savings of 10 per cent or more for one of our machines versus a competitor model.” 
With many global brands now manufacturing in India, it isn’t as if using a global brand implies using an imported machine. Mehrotra tells us that imported construction machines form a minuscule amount of all machines in use: “Primarily, motor graders and higher tonnage excavators are being imported.”

So, what needs to be done to build world-class Indian construction equipment brands?
Joshi believes Indian companies need to be driven by quality over quantity and focus on R&D to compete with global manufacturers. He cites the example of asphalt pavers – “India is still nowhere in that segment; we need to develop a world-class machine.” 
“Government incentives to the sector may help improve the quality of machines,” believes Joshi.
Additionally, he also sees scope for the government to support Indian brands. “To some extent, the government is furthering the use of equipment from global brands by specifying (in tenders) the use of machines with built-in sensors; and rightly so because they perform better,” he says. “To incentivise domestic companies, the government must insist on the use of Indian equipment for all projects.”

What’s new?
Mahindra has newly launched the RoadMaster G90, a motor grader custom-made for Indian conditions, “optimised to deliver zero compromise grading at a fractional 40 per cent cost compared to conventional motor graders,” says Arora. The RoadMaster G90 is apt for applications such as the construction of medium roads and state highways as well as widening of national highways, embankment or earthwork for the laying of railway tracks and levelling large plots for industrial construction and ports.

LiuGong India has launched excavators in the 8 tonne to 50 tonne range, an 11-tonne compactor and new variants of wheel loaders in the 5-7 tonne payload capacity.
Volvo has recently launched the DD100B, a tandem compactor to achieve a high level of quality and productivity, the fuel-efficient G-Series L90Gz wheel loader, the versatile DD100B double-drum asphalt compactor; and the low-noise HB38 hydraulic breaker attachment for the EC380D excavator. These extend Volvo’s existing range of products for highway construction, including pavers such as the P6820C, P7820B, SD110 soil compactor, excavators EC200D, EC210D, EC300D, etc.
Wirtgen slipform pavers are now being offered with innovations like the dowel bar inserter system (DBI), super smoother, central tie bar inserter, oscillating beam, etc. These slipform pavers pave a width of 1.5 m to 16 m, and all these models are currently working in India at different project sites. 
New machines for cold milling from Wirtgen India include the W55H, W120R, W195, equipped with the level pro system for perfect levelling at high operating speed, and a quick change tool holder system 
HT 22. In asphalt paving, it has the new generation Dash 3 pavers. 
It recently launched the Vogele Mobile Power Feeder MT 3000-2 for high productivity and high quality, especially for super highway projects. 
Recently, “CASE India launched the CASE 1110 EX (12 T) soil compactor to join its 1107EX (11 T) model, the 752EX (9 T) vibratory tandem compactor and the 450DX mini tandem compactor (3 T) in the compaction segment,” shares Aneja. “It also released its backhoe loader PRO series range with the Advanced Eagle Eye Telematics solution in association with Bosch.”
CASE India’s backhoe loader PRO range consists of CASE 770 EX PRO, CASE770 EX Magnum PRO and 851 EX PRO ‘The King’. 
The company has developed separate models to cater to the roads and mining sectors, such as the motor grader CASE 845B for road job works and the 865B for tough mining applications. Three models of crawler dozers – the 1150L and 1650L suitable for road construction and the 2050M for mining – and the SR130 skid-steer loader, which is imported from the US and suitable for confined spaces, complete its offerings.

What do buyers look for in a machine?
While cost remains one of the most important factors for buyers in India, the purchase price is only part of what constitutes a machine’s overall lifetime cost, explains Dimitrov Krishnan, Vice President and Head, Volvo CE India. “Customers in India have developed quite sophisticated models for calculating ‘cost per tonne’ or ‘cost per km’ for equipment, based on the purchase price, operating costs, productivity levels, anticipated maintenance, depreciation, resale value and more.”
What are some of the features customers evaluate?
“In graders, we evaluate power, fuel efficiency, hydraulic system, transmission and productivity, and prefer models with fitted 
sensor technology-based level instruments to minimise the wastage of dense bituminous macadam,” says Ashim Paul, Plant & Machinery Head, Adani Transport. “In compactors, we look for machines with smart compaction systems as these help save fuel. In excavators, sensor systems are handy when the machines are deployed at building sites in developed areas.”

Machines for PMGSY Projects
In FY2019, Rs 190 billion was allocated to rural roads under Pradhan Mantri Gram Sadak Yojana (PMGSY), 12.42 per cent higher than the previous year’s grant of Rs 169 billion.

Which regions will see greater road construction activity?
Manish Arora, Business Head, Mahindra Construction Equipment, singles out Assam, Chhattisgarh, Madhya Pradesh, Odisha and West Bengal, “because of loan agreements with the Asian Development Bank (ADB) to finance the construction of over 6,254 km of all-weather rural roads in those five states under PMGSY”. Industry voices attest that PMGSY projects are contributing to demand for earthmoving equipment. “We expect Phase-3 of PMGSY, which is set to get underway in many states, to keep up the demand for rural road construction equipment,” says Arora. “A few of our clients are executing PMGSY projects in northeast India,” says Nischal Mehrotra, Director, Sales & Marketing, LiuGong India. “A considerable budget for the PMGSY will call for more machines for those projects,” says Ajay Aneja, Brand Leader, CASE India. What sort of machines might be needed for PMGSY projects?

“Most projects driving demand for earthmoving equipment are national highways, which need highly productive products to speed up construction activity,” says Dimitrov Krishnan, Vice President and Head, Volvo CE India. “For PMGSY projects, our SD110 soil compactor, DD90B tandem compactor, G9138 SDLG grader, EC200D excavator, etc, are suitable.” “Indian-made machines are workable for rural roads because these are made to carry lower loads,” opines Ashim Paul, Plant & Machinery Head, Adani Transport.

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