Rise of the machines

01 Jan 2014 CW Staff

Leading equipment players provide diverse insights into the current scenario of the construction industry and the demand for construction equipment in the National Capital Region (NCR), discover AHLAM RAIS and MONISHA RAO.

The Prime Minister’s Project Monitoring Group (PMG) has fast-tracked the implementation of big stalled infrastructure projects. About 128 projects worth Rs 4.30 lakh crore have already been cleared by this move. This brings in potential business opportunities for equipment players across the country, who have witnessed a downfall owing to stalled or delayed projects. Samir Bansal, General Manager, Off-Highway Research, says, “The situation will start improving from the second half of 2014 and the market is expected to recover to over 61,000 units with a growth of 11 per cent.” He adds, “The future growth in demand is projected to be sustained thereafter at 12-15 per cent, and one can confidently expect the market to grow to 88,000 units in 2017.”

Delhi-NCR has a story of its own. The current demand for construction equipment has witnessed a decline owing to projects being delayed or stalled. CW speaks to leading equipment players on the current scenario in the construction industry, demand for construction equipment in the region, growth prospects and their wishlist.

“Growth in India will return but there will be cycles of de-growth.” - Vipin Sondhi, Managing Director & CEO, JCB India

How has JCB dealt with the slowdown in the construction industry?
Although there has been a slowdown in the industry for the past 18-24 months, JCB has come up with 19 new products in India with a conviction that growth will resume for infrastructure. We earlier adopted this strategy in 2007 and 2008, when the industry was in a bad shape. Our conviction is that growth in India will return but we understand that there will be cycles of de-growth or slowdown. A similar situation may occur five to seven years down the line and this is a part of business life. There is a demand for the construction equipment industry and I am sure that between the government and industry, we will get the right equation.

Can you please elaborate on JCB’s growth chart?
In India, we sell over 25,000 machines a year; it is our base. However, in 2011, we exported about 330 machines and this number went up to just over 900 in 2012. By the end of 2013, we should end upwards of 1,700. Hence, we are growing at the rate of about 80 per cent or so every year on exports but the base is small and it is growing.

What are the different types of equipment one offers for Delhi?
In Delhi’s Chandni Chowk, large machines cannot be transported and if the cities are renewed, one will require equipment that is compact and can manoeuvre its way over to the location. Hence, there will be greater demand for equipment such as the mini excavator. On a larger scale, we also have mid-range and heavy equipment. In India, you can cover the entire gamut and still not have enough.

What are your expansion plans in terms of dealership or the distribution area by the end of 2013?
Five years ago, we had 150 outlets, and by the end of 2013, we expect it to grow to 555 outlets. This number has grown as we sit down with each dealer, understand and map out the territory and then move forward.

What are the future prospects for the construction equipment industry?
We expect growth to return as there have been a number of steps the Government has taken in the past 12-18 months. Our estimation is that unless there is anything dramatic, there should be a slow and steady growth forward.

“We have new products lined up for this year.” - Vijay Sharma, Executive Director, Terex Equipment Pvt Ltd

Terex Equipment is known for its high-quality construction equipment. Kindly elaborate on the company’s journey.
Terex Equipment Pvt Ltd (TEPL) is among the oldest manufacturers of construction equipment in India. We have two other legal entities at Hosur in Tamil Nadu that manufactures crushing, screening and washing equipment for the mining and aggregates sector, and Demag cranes and components at Chakan near Pune. We currently manufacture backhoe loaders and skid steer loaders in the plant at Greater Noida.

Please mention the major projects for which you have supplied equipment in Delhi-NCR.
Our backhoe loaders and skid steer loaders are sold through a retail network. The buyer profile is a mix of corporates and small and medium contractors engaged in the earthmoving business. A few of our notable installations in the NCR are with L&T Group, Jaypee Group and Jindal Group.

What is the demand for construction equipment in Delhi-NCR?
The requirement for earthmoving equipment was quite strong, not only in the NCR, but across the country. However, this changed since early 2012. Overall, there has been a slump in industrial activity that has impacted the construction equipment market too. The number of machines in the market can satisfy current requirements and the need for new equipment is much lower.

Which projects have been stuck in the NCR? And how has it affected the company?
Various projects have been stuck, not only in NCR but pan-India. However, in NCR, the highway project between Delhi-Amritsar is just one of the many highway projects that have been stuck. Project delays have indirectly affected the company’s performance as demand for construction equipment has dropped.

What are your plans for the near future?
The market has been flat this year. However, we have managed to hold our market share intact. We have new products lined up for this year.

What is your wishlist from the Government?
The Government needs to clear construction and infrastructure projects quickly. Also, there is a need to expand mining activities; this will be good for everybody.

“2014 is an exciting time for the construction equipment market.” - Raman Joshi, Managing Director and Vice President, Manitowoc Cranes-India

Manitowoc specialises in manufacturing cranes. Please elaborate upon the company’s journey.
Manitowoc lattice-boom crawler cranes, Potain tower cranes, Grove mobile hydraulic cranes and National Crane telescoping cranes are built, sold and serviced at multiple locations on five continents. Located regionally throughout the world, Manitowoc is uniquely positioned to meet the wide-ranging, ever-expanding needs of highly diverse customer groups with over 4,200 manufacturing, sales and service experts in three strategically located regions. Manitowoc acquired the factory in Pune and was the first manufacturer of tower cranes in India. Manitowoc has been manufacturing Potain tower cranes from the top-slewing MC range with lift capacities ranging from 2.5 t to 16 t. Manitowoc’s Potain-brand tower cranes manufactured at the Pune factory employ the same industry-leading engineering and quality standards as cranes made at Potain’s factories across the world. India’s largest construction equipment dealers and major crane-owning companies have allowed Manitowoc to develop deep roots in India. Though this region has experienced economic highs and lows in recent years, Manitowoc’s commitment has always remained constant.

What is the current demand for construction equipment in the Delhi-NCR?
Towards the end of 2013, demand for construction equipment in Delhi-NCR had reduced. With current projects nearing completion, there is no need for new equipment, and many projects that received approval have now stalled. The economy is another reason for the slowdown as it struggles to stabilise and bring confidence back to the market.

What are the challenges and opportunities for construction equipment players in the NCR region?
A major stumbling block right now is the formation of the new government. But once this is done and the dust settles, there will be a lot of opportunities for us and we expect to see some exciting growth in demand for new construction equipment. In particular, we predict that the third quarter of 2014 will see the most significant development.

Please mention the major projects for which you have supplied equipment.
In northern India, we have supplied a 300-t all terrain crane to Hindustan Mittal Energy Ltd (HMEL), three Potain tower cranes to Leighton Welspun Contractors to build a landmark commercial development in Noida, Manitowoc crawler cranes to L&T for a Metro construction project, a 120-t Grove rough terrain crane to Northern Coalfield India Ltd, 300-t Grove all terrain crane to Asiatic Cranes and Shri Dinesh Crane for a road expansion project in Rajasthan, 10-t Potain tower crane to Raheja Developers for the construction of the tallest residential tower in Delhi, NCR, and a 16-t Potain tower crane to Hindustan Construction Company for the construction of a nuclear power plant at Kota in Rajasthan.

How do you foresee the market for construction equipment in the Delhi-NCR?
The year 2014 is an exciting time for the construction equipment market in the region. The current unrest and lack of confidence will be replaced with new interest and projects. We also have mega construction events to look forward to; these events will help our customers see the value and importance of this market.

“The current concern is about liquidity.”- Rajesh Kapoor, National Head-Marketing, Associate Vice President, Kobelco Construction Equipment

What does Kobelco offer to the construction industry?
Kobelco offers the most fuel-efficient machines in the country today with a high output production for contractors through inbuilt features like high digging forces and faster machine operations. These equipment also have a low operating and maintenance cost.

Please highlight your main equipment.
In 2007, Kobelco was a pioneer in introducing technologically advanced hydraulic excavators. We were the first hydraulic excavator manufacturer to supply to Tier-III cities and bring the technology into India.

What are the achievements of the company?
Although Kobelco was among the last to enter India in the excavator market, we have had the highest customer retention rate by supplying reliable equipment and through a proactive customer approach. Our machines have been top performers and our market share is slowly getting stronger, 58 per cent of our customers are repeat buyers. This clearly indicates that we have received an excellent response.

How has the market performed in Delhi-NCR of late?
In 2012, Delhi-NCR witnessed an overall slowdown like the rest of the country. But we consolidated and grew our market share. We have performed better by adding new customers to the company; our big customers are from the roads and mining sector. We have also incorporated new retail customers from the subcontracting segment.

Which sectors in the construction industry will witness maximum growth?
From mid-2014 onwards, the roads sector will witness maximum growth followed by mining. We have seen an indication of this movement in the past couple of months. However, the current concern is about liquidity, fund availability and high interest rates that make it difficult for the contracts that have been awarded.

What have been the problem areas for the construction industry in Delhi-NCR?
Largely, mining has been an issue in this region owing to environmental clearances. Apart from this, the market has been low this year by 23-24 per cent. Due to all these factors, we have not been able to achieve the set target but our market share is growing.

What is your wishlist for the sector?
Our wishlist is the same as all other players in the market. We wish for quick decision-making so that projects are implemented without delay. Also, measures have to be taken to solve the problem of cash crunch.

“Stable government will boost investor sentiment.” - Rajinder Raina, General Manager-Marketing, Escorts Construction Equipment

For over six decades, Escorts has evolved to become one of the leading engineering conglomerates. How has the journey been?
Escorts started its journey with the objective of getting the best of global products or technologies into the country. The journey has been challenging but the company succeeded in developing products that are serving the farm sector, through a complete range of tractors that are best in class in India and find acceptance in the global market as well. The material handling, road construction and earthmoving equipment has been contributing in a significant manner to the infrastructure segment.

Which are the ongoing projects in Delhi-NCR for which you supply construction equipment?
The major demand for construction equipment is currently coming from the Delhi Metro, real estate and retail hirers who are deploying their cranes right up to Jaipur Metro and Bathinda. Currently, we are supplying equipment to the Delhi Metro. We are also catering to a few high-rise buildings and major townships in the NCR.

Which are the infrastructure projects stuck in Delhi-NCR?
A few road and UMPP (ultra mega power plant) projects are stuck in this region. The Reliance UMPP project did not take off well, NHAI too is not functional. Also, there are a few PPP projects that are stuck. These have led to scepticism; hence, foreign investors are reluctant to invest in India. Thus, business as a whole has taken a dip of 30 per cent compared to last year.

What is your outlook on the demand for construction equipment picking up in the North and the country as a whole?
Reliance Industries in Jamnagar is going to create a big demand for cranes. However, one cannot talk about some other power and road projects with equal confidence. Some added movement on metro projects can help boost the demand. An improvement of about 10-15 per cent over the past year is expected.

What is your wishlist from the Government?
We need a stable government that sends a strong signal globally and gives a boost to the investment sentiments.

To share your views on the Delhi-NCR construction equipment market, write in at feedback@ASAPPmedia.com

Leading equipment players provide diverse insights into the current scenario of the construction industry and the demand for construction equipment in the National Capital Region (NCR), discover AHLAM RAIS and MONISHA RAO.The Prime Minister’s Project Monitoring Group (PMG) has fast-tracked the implementation of big stalled infrastructure projects. About 128 projects worth Rs 4.30 lakh crore have already been cleared by this move. This brings in potential business opportunities for equipment players across the country, who have witnessed a downfall owing to stalled or delayed projects. Samir Bansal, General Manager, Off-Highway Research, says, “The situation will start improving from the second half of 2014 and the market is expected to recover to over 61,000 units with a growth of 11 per cent.” He adds, “The future growth in demand is projected to be sustained thereafter at 12-15 per cent, and one can confidently expect the market to grow to 88,000 units in 2017.”Delhi-NCR has a story of its own. The current demand for construction equipment has witnessed a decline owing to projects being delayed or stalled. CW speaks to leading equipment players on the current scenario in the construction industry, demand for construction equipment in the region, growth prospects and their wishlist.“Growth in India will return but there will be cycles of de-growth.” - Vipin Sondhi, Managing Director & CEO, JCB IndiaHow has JCB dealt with the slowdown in the construction industry?Although there has been a slowdown in the industry for the past 18-24 months, JCB has come up with 19 new products in India with a conviction that growth will resume for infrastructure. We earlier adopted this strategy in 2007 and 2008, when the industry was in a bad shape. Our conviction is that growth in India will return but we understand that there will be cycles of de-growth or slowdown. A similar situation may occur five to seven years down the line and this is a part of business life. There is a demand for the construction equipment industry and I am sure that between the government and industry, we will get the right equation.Can you please elaborate on JCB’s growth chart?In India, we sell over 25,000 machines a year; it is our base. However, in 2011, we exported about 330 machines and this number went up to just over 900 in 2012. By the end of 2013, we should end upwards of 1,700. Hence, we are growing at the rate of about 80 per cent or so every year on exports but the base is small and it is growing.What are the different types of equipment one offers for Delhi?In Delhi’s Chandni Chowk, large machines cannot be transported and if the cities are renewed, one will require equipment that is compact and can manoeuvre its way over to the location. Hence, there will be greater demand for equipment such as the mini excavator. On a larger scale, we also have mid-range and heavy equipment. In India, you can cover the entire gamut and still not have enough.What are your expansion plans in terms of dealership or the distribution area by the end of 2013?Five years ago, we had 150 outlets, and by the end of 2013, we expect it to grow to 555 outlets. This number has grown as we sit down with each dealer, understand and map out the territory and then move forward.What are the future prospects for the construction equipment industry?We expect growth to return as there have been a number of steps the Government has taken in the past 12-18 months. Our estimation is that unless there is anything dramatic, there should be a slow and steady growth forward.“We have new products lined up for this year.” - Vijay Sharma, Executive Director, Terex Equipment Pvt LtdTerex Equipment is known for its high-quality construction equipment. Kindly elaborate on the company’s journey. Terex Equipment Pvt Ltd (TEPL) is among the oldest manufacturers of construction equipment in India. We have two other legal entities at Hosur in Tamil Nadu that manufactures crushing, screening and washing equipment for the mining and aggregates sector, and Demag cranes and components at Chakan near Pune. We currently manufacture backhoe loaders and skid steer loaders in the plant at Greater Noida.Please mention the major projects for which you have supplied equipment in Delhi-NCR.Our backhoe loaders and skid steer loaders are sold through a retail network. The buyer profile is a mix of corporates and small and medium contractors engaged in the earthmoving business. A few of our notable installations in the NCR are with L&T Group, Jaypee Group and Jindal Group.What is the demand for construction equipment in Delhi-NCR?The requirement for earthmoving equipment was quite strong, not only in the NCR, but across the country. However, this changed since early 2012. Overall, there has been a slump in industrial activity that has impacted the construction equipment market too. The number of machines in the market can satisfy current requirements and the need for new equipment is much lower.Which projects have been stuck in the NCR? And how has it affected the company?Various projects have been stuck, not only in NCR but pan-India. However, in NCR, the highway project between Delhi-Amritsar is just one of the many highway projects that have been stuck. Project delays have indirectly affected the company’s performance as demand for construction equipment has dropped.What are your plans for the near future?The market has been flat this year. However, we have managed to hold our market share intact. We have new products lined up for this year.What is your wishlist from the Government?The Government needs to clear construction and infrastructure projects quickly. Also, there is a need to expand mining activities; this will be good for everybody.“2014 is an exciting time for the construction equipment market.” - Raman Joshi, Managing Director and Vice President, Manitowoc Cranes-IndiaManitowoc specialises in manufacturing cranes. Please elaborate upon the company’s journey.Manitowoc lattice-boom crawler cranes, Potain tower cranes, Grove mobile hydraulic cranes and National Crane telescoping cranes are built, sold and serviced at multiple locations on five continents. Located regionally throughout the world, Manitowoc is uniquely positioned to meet the wide-ranging, ever-expanding needs of highly diverse customer groups with over 4,200 manufacturing, sales and service experts in three strategically located regions. Manitowoc acquired the factory in Pune and was the first manufacturer of tower cranes in India. Manitowoc has been manufacturing Potain tower cranes from the top-slewing MC range with lift capacities ranging from 2.5 t to 16 t. Manitowoc’s Potain-brand tower cranes manufactured at the Pune factory employ the same industry-leading engineering and quality standards as cranes made at Potain’s factories across the world. India’s largest construction equipment dealers and major crane-owning companies have allowed Manitowoc to develop deep roots in India. Though this region has experienced economic highs and lows in recent years, Manitowoc’s commitment has always remained constant.What is the current demand for construction equipment in the Delhi-NCR?Towards the end of 2013, demand for construction equipment in Delhi-NCR had reduced. With current projects nearing completion, there is no need for new equipment, and many projects that received approval have now stalled. The economy is another reason for the slowdown as it struggles to stabilise and bring confidence back to the market.What are the challenges and opportunities for construction equipment players in the NCR region?A major stumbling block right now is the formation of the new government. But once this is done and the dust settles, there will be a lot of opportunities for us and we expect to see some exciting growth in demand for new construction equipment. In particular, we predict that the third quarter of 2014 will see the most significant development.Please mention the major projects for which you have supplied equipment.In northern India, we have supplied a 300-t all terrain crane to Hindustan Mittal Energy Ltd (HMEL), three Potain tower cranes to Leighton Welspun Contractors to build a landmark commercial development in Noida, Manitowoc crawler cranes to L&T for a Metro construction project, a 120-t Grove rough terrain crane to Northern Coalfield India Ltd, 300-t Grove all terrain crane to Asiatic Cranes and Shri Dinesh Crane for a road expansion project in Rajasthan, 10-t Potain tower crane to Raheja Developers for the construction of the tallest residential tower in Delhi, NCR, and a 16-t Potain tower crane to Hindustan Construction Company for the construction of a nuclear power plant at Kota in Rajasthan.How do you foresee the market for construction equipment in the Delhi-NCR?The year 2014 is an exciting time for the construction equipment market in the region. The current unrest and lack of confidence will be replaced with new interest and projects. We also have mega construction events to look forward to; these events will help our customers see the value and importance of this market.“The current concern is about liquidity.”- Rajesh Kapoor, National Head-Marketing, Associate Vice President, Kobelco Construction EquipmentWhat does Kobelco offer to the construction industry?Kobelco offers the most fuel-efficient machines in the country today with a high output production for contractors through inbuilt features like high digging forces and faster machine operations. These equipment also have a low operating and maintenance cost.Please highlight your main equipment.In 2007, Kobelco was a pioneer in introducing technologically advanced hydraulic excavators. We were the first hydraulic excavator manufacturer to supply to Tier-III cities and bring the technology into India.What are the achievements of the company?Although Kobelco was among the last to enter India in the excavator market, we have had the highest customer retention rate by supplying reliable equipment and through a proactive customer approach. Our machines have been top performers and our market share is slowly getting stronger, 58 per cent of our customers are repeat buyers. This clearly indicates that we have received an excellent response.How has the market performed in Delhi-NCR of late?In 2012, Delhi-NCR witnessed an overall slowdown like the rest of the country. But we consolidated and grew our market share. We have performed better by adding new customers to the company; our big customers are from the roads and mining sector. We have also incorporated new retail customers from the subcontracting segment.Which sectors in the construction industry will witness maximum growth?From mid-2014 onwards, the roads sector will witness maximum growth followed by mining. We have seen an indication of this movement in the past couple of months. However, the current concern is about liquidity, fund availability and high interest rates that make it difficult for the contracts that have been awarded.What have been the problem areas for the construction industry in Delhi-NCR?Largely, mining has been an issue in this region owing to environmental clearances. Apart from this, the market has been low this year by 23-24 per cent. Due to all these factors, we have not been able to achieve the set target but our market share is growing.What is your wishlist for the sector?Our wishlist is the same as all other players in the market. We wish for quick decision-making so that projects are implemented without delay. Also, measures have to be taken to solve the problem of cash crunch.“Stable government will boost investor sentiment.” - Rajinder Raina, General Manager-Marketing, Escorts Construction EquipmentFor over six decades, Escorts has evolved to become one of the leading engineering conglomerates. How has the journey been?Escorts started its journey with the objective of getting the best of global products or technologies into the country. The journey has been challenging but the company succeeded in developing products that are serving the farm sector, through a complete range of tractors that are best in class in India and find acceptance in the global market as well. The material handling, road construction and earthmoving equipment has been contributing in a significant manner to the infrastructure segment.Which are the ongoing projects in Delhi-NCR for which you supply construction equipment?The major demand for construction equipment is currently coming from the Delhi Metro, real estate and retail hirers who are deploying their cranes right up to Jaipur Metro and Bathinda. Currently, we are supplying equipment to the Delhi Metro. We are also catering to a few high-rise buildings and major townships in the NCR.Which are the infrastructure projects stuck in Delhi-NCR?A few road and UMPP (ultra mega power plant) projects are stuck in this region. The Reliance UMPP project did not take off well, NHAI too is not functional. Also, there are a few PPP projects that are stuck. These have led to scepticism; hence, foreign investors are reluctant to invest in India. Thus, business as a whole has taken a dip of 30 per cent compared to last year.What is your outlook on the demand for construction equipment picking up in the North and the country as a whole?Reliance Industries in Jamnagar is going to create a big demand for cranes. However, one cannot talk about some other power and road projects with equal confidence. Some added movement on metro projects can help boost the demand. An improvement of about 10-15 per cent over the past year is expected.What is your wishlist from the Government?We need a stable government that sends a strong signal globally and gives a boost to the investment sentiments.To share your views on the Delhi-NCR construction equipment market, write in at feedback@ASAPPmedia.com