Mini Machines, Maximum Demand
Which compact models are growing faster than the overall CE industry? June 2020
Construction industry trend: The construction industry had phenomenal growth for four years till 2018 where industry volumes doubled from 50,000 to close to 100,000 units. In 2019, the new government came back and there were a lot of expectations of further growth and consolidation. However, construction equipment volumes dropped by 20 per cent. They were beginning to pick up in January and February this year but, from mid-March, the COVID-19 crisis almost stopped demand. Today, we have a challenge on the supply side and even more on the demand side.
I think we are in a temporary slowdown now. It may take 18 months to recover. But I expect phenomenal growth in the next three to five years after that, perhaps similar to what we had in 2014 and 2018. I feel the government has to invest in infrastructure and ensure the National Infrastructure Pipeline (NIP) mission gets going. While there are short-term issues, there are a lot of prospects for India in the long term.
Commercial coal mining: I am more hopeful today compared to earlier announcements. There are a lot of things happening on paper on the coal sector with regard to privatisation, auction, etc, for at least the past eight to 10 years. But the reality on ground is that digging has not yet started. However, I think the government seems to be more serious now and hopefully things should pick up now, which would increase demand for construction machinery. But it will take at least nine to 12 months before this translates into business for us. If things start moving now, perhaps by early next year it will provide demand for the industry.
Export market: We are the largest exporters of Kleemann screens; these are exported all over the world including Tier-IV markets like the US, Europe and Australia. We have over 500 screens operating world over and the feedback is quite positive. So it’s clear that we can produce world-class quality in India and we are competitive.
Under John Deere umbrella: It has now been almost three years since we became part of the John Deere group. However, John Deere had made it clear that Wirtgen Group would operate as a separate entity under the John Deere umbrella; we have been operating that way for the past three years. From the India standpoint, it is beneficial for us because John Deere is focused on doing more manufacturing in India and China. In fact, we are making a massive investment in China for local manufacturing and we have done a similar thing here. We have just inaugurated our paint shop a couple of months ago. We have bought around 15 acre of land adjacent to our existing plant. This is because we plan to manufacture more products in India going forward and John Deere would like to manufacture products where there is demand and it is more competitive to produce. We have already demonstrated that we can produce world-class products in India.
Silver Jubilee and beyond: We had planned a grand technology day at the Pune plant where we wanted to invite all our customers, formally open the new plant and do a live demo of all the machines and new technologies with seminars, like the one we typically do in Germany. In fact, we were planning to do the event this year, but have now postponed to January next year. We are now focusing more on customer engagements. We are also planning more training as there is a shortage of trained operators now. We will reactivate our training school to give new operators to our customers.
I think the next 25 years will be much better than the first 25 years looking at the infrastructure needs of India; what we need to do in the next 10-15 years is phenomenal work. We have the technologies at least in the sectors where we operate. We are innovation leaders. We also have a strong base in India with the direct sales and service model and manufacturing facility. I think we are rightly placed to cash in on this opportunity. We will continue to innovate and get more products to India and expand our facility in Pune.
The news has been originally shared by Equipment India. To access the original article, click on the following: https://equipmentindia.com/construction-machinery-news/top-equipment-news/webexclusive/We-will-continue-to-innovate-and-expand-Ramesh-Palagiri/126376