01 Mar 2019
Who’s buying earthmoving machines?
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 roads projects under execution, projects currently being bid for and the Bharatmala project in future. Opportunities in the roads sector should be very good in coming years provided we have a stable government after the national election.”
“Allocating the budget to build 35,000 km of road 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 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 and 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’s still in the early stages, these projects will increase production capacity,” he says.
Turning to iron mining, Krishnan 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.
- CHARU BAHRI
