The market potential for hydraulic excavators in India looks to be most promising, as a large number of players have entered the scene. What's more, the boom is expected to last for quite some time. Agith G Antony digs up the facts.
?The market potential for hydraulic excavators in India would approximately be 13,000-14,000 units in 2011 and this is expected to more than double over the next five years,? says GVR Murthy, Joint Managing Director, TIPL. That, in fact, reveals just what a rosy picture it is for this particular market. Even the conservative and well- researched figures from Off-Highway Research seem to support the numbers. According to its data, the total volume of excavators in 2009 (all models and capacity, put together) was 7,944 units, which in 2010 reached 10,500 units (a growth rate of 32 per cent) and the forecast is for a growth in volume around 22,500 units in 2014, i.e, a growth of around 183 per cent compared to 2009.
What?s more, the buzz is good. Given the fact that a decade ago, if the number of players were limited, the same has more than doubled now. If BEML, Telcon, Caterpillar, JCB, L&T Komatsu and Volvo were the major players, today the market has witnessed the entry of more players like Kobelco, and Sumitomo from Japan, Hyundai and Doosan from Korea, Chetra from Russia, Liugong and Sany from China, Liebherr from Germany; the number of OEMs eyeing the Indian market is on the rise, too.
?I would say that the market should double in the next five years if you are looking at 20 per cent growth. But it is anyone?s guess, because numbers could just boom beyond this also, if the government focus on infrastructure remains consistent. We have created a capacity of 1,200 machines per year for excavators in India, and with some addition, we can jack up the capacity. We have plans of doubling the capacity in the next few years but our investments are very carefully drafted. We are very positive about India, and we feel a growth of average 20 per cent will be a safe bet in the next few years,? says Vijay Sharma, Executive Director, Kobelco Construction Equipment.
AM Muralidharan, Managing Director, Volvo India says, ?India?s infrastructure industry has huge potential for growth and opportunities for investment. We see the construction industry on the rise and this would have a significant impact on the excavators segment as well. We foresee a positive trend in equipment purchase with more small players entering into the aggregate industry as well. 2010 has provides enough evidence on the same: while emerging markets like China and India gave the needed acceleration, the developed countries too got on the road to recovery. The construction equipment sector is once again looking for a ?never before? boom, expectedly during the next decade or so.?
Excavators Vs Backhoes
Interestingly enough, though it was an excavator that made an entry to the Indian construction arena, it was the backhoe that took the major chunk of the market, and controls the market even today. To support the claim with figures from Off-Highway Research, the total volume of backhoe in 2009 was 15,731 units, which reached 23,000 units in 2010, and the forecasted volume is around 30,000 in 2014.
Are there any specific reasons for that? Murthy of TIPL had this to say, ?Backhoe loaders still have a very prominent market in India and will continue to grow at a good pace. Many first-time buyers are emerging every year. However, most of the new buyers hire the same, as the backhoe loader offers a good return on investment in a reasonably short period of time. At the same time, there are certain sections of backhoe loader buyers who are graduating to the 7T class excavators. Both these segments will continue to grow simultaneously. In a certain section of the clientele, it also becomes a question of affordability. The cost of a 7T class excavator is almost 55-60 per cent higher compared to a backhoe loader.?
According to Amit Gossain, President Sales & Marketing, JCB India, ?Excavators are the second-highest selling construction equipment in the Indian market after backhoes. As the Indian construction equipment market matures, the role of heavy equipment like excavators is bound to grow, considering the amount of large construction projects across various sectors like mining, roads, irrigation, ports, etc. However, the backhoe, due its multi-functionality, will also be a fast- growing machine. The government continues to dedicate a significant portion of India?s GDP to planned expenditure in infrastructure upgradation in the country. Therefore, large earthwork will see an increase. JCB has a strong market presence in these segments and will continue to focus on further improving market share and customer satisfaction in future.?
Given the fact that excavators are highly versatile, and come with myriad attachments, it can become the most sought- after equipment. ?If we look at the construction equipment segment, overall, the volume is around approximately 55,000 units, of which the major chunk is taken by the backhoe loader market. However, the excavator market is growing equally fast and a tremendous market growth has been observed; further, it is envisaged to be catching up with the No1 product in the CE industry. Over the last three years, it has progressed by approximately around 30-40 per cent and in the next five years, the total volume should be touching close to around 26,000-27,000 units. This clearly emphasises a projected growth of around 114 per cent,? avers Sunil Sapru, President, LiuGong India. ?By offering different attachments suiting variety of applications, productivity has been increased, which is reflected in the sales pattern. With attachments like quick couplers, break hammers, and a host of other models on offer, we can foresee a change in the excavator sales which helps the early completion of projects in a cost- effective way. I perceive that growth of sales will be at least ten per cent due to this. We also offer a variety of attachments as per the requirements of the customers.,?
Murthy says, ?A wide variety of attachments can be made available with an excavator for a variety of applications like rock breakers, grapple, concrete pulverisers, metal shears, wood pulverisers, and wood splitters. Despite the availability of a wide variety of attachments with excavators, many of them are still not being used in our country. The major applications are restricted to excavation and rock breaking.?
According to Amit, JCB, ?The use of specialised attachments is on the rise in the Indian market. Attachments greatly increase the versatility of a machine, which then can be used for several different applications, thus entirely eliminating the need of another machine. Excavators are widely used in mining; hence the rock breaker is the most common attachment that is fitted with an excavator. Rock breakers come in several sizes and capacities to suit the application. Further, there are various sizes of buckets for different excavation applications. Attachments like jaw buckets and grabs (orange peel grabs, clamshell grabs) are extensively used for solid waste management applications. JCB offers a host of world class attachments for excavators which include the ones mentioned above.?
Sharma of Kobelco has this to say. ?I would say that awareness of the customers is increasing now. They have realised that if an application needs a rock breaker, it has to get a rock breaker. If something needs a crusher, it needs a crusher. So people have started focusing on application- specific attachments. Therefore this market is maturing. Attachment versatility is a very high strength of Kobelco. We have the highest reach demolition machine built on a excavator platform and it can go up to 60m for demolition. We have nibblers and magnetic handlers as attachments. We plan to gradually introduce these in India.?
Impact of emission norms
As per reports, globally, with the introduction of Tier- 4 and Stage IIIB engine emission laws in the US and Eruope, the equipment market seems to have split in to two: launch of new machines complying with the emission norms, and a set of different models for less regulated markets. So will the Tier-3 norms getting implemented bring the same pattern to India? Murthy says, ?In India, we are shifting to Tier-3 norms now. The US market has already shifted to the Tier-4 norms and other developed markets in Europe have followed suit. Caterpillar offers a different set of models for the US and European markets which meet Tier-4 norms, whereas for countries like India and others in Southeast Asia, a different set of models is offered that is customised for local needs and meet Tier-3 norms. The change has not affected Caterpillar excavators being sold in India since all machines are imported and are coming with upgraded engines as applicable to LRC countries. However, other local manufacturers in India now will have to upgrade their models to meet the Tier-3 norms.?
?Volvo leads engine technology in the construction equipment market and meets all emission requirements globally and we will be ready to meet the India requirements as well,? avers Muralidharan.
Is there some kind of segmentation of market happening based on the application areas, for example, demolition, mining, quarrying etc? ?Yes, there is definitely segmentation of the market, especially in India the road construction, mining, quarry and qggregates, dimensional stone quarrying, heavy construction and general construction are the major segments today. There is commonality and niche areas in each segment application, basis which the market potential is ascertained,? says Muralidharan.
Amit of JCB says, ?There is a lot of construction activity happening across the country and as the market matures, segmentation is bound to happen. Today, general contracting is the biggest market today for excavators. This includes roads and highways, construction sites, and mass excavation applications. Hiring is also on the rise. Another segmentation that has happened is in the specialised application of the over- burden removal in mining. I?d like to mention that the Defence sector procures a lot of excavators for applications in the most arduous terrain and climatic conditions.?
?There is some sort of segmentation of market happening based on application area. The 20T class represents the single largest segment of the market which is almost 50 per cent of the total excavator market. These machines are the mainstay of all construction activity and they are found working on all major infrastructure projects in the country. This size offers the best compromise between price, machine size and overall productivity as well as being a good match for the loading capacity of locally made on-off highway trucks. Excavators from greater than 20T up to 33T are mainly used in quarries, sand pits and light- duty mining applications. The 33T to 50T range of excavators are primarily deployed in mining, limestone, granite and marble quarries and on large hydro electric power generation projects. The demand for over 50T machines comes mostly from large mines,? according to Murthy of TIPL.
?With increasing fleet sizes, and asset management becoming an issue, certain big contractors in the country have now started looking at tracking solutions in order to have optimum utilisation of their construction fleet. Though it is still in nascent stage in our country, the interest for this is slowly becoming evident of late amongst the big players in the country. The price value proposition however needs to be worked out properly,? says Murthy.
Muralidharan says, ?Volvo Construction Equipment is the first OEM to announce the launch of a full fledged telematics system in the Indian construction equipment industry for enabling better ?man-machine communication?. The Indian market is gradually maturing and accepting the concept and we have made some inroads into the same. Globally, CareTrack is available across more than 40 markets. We see a dramatic increase in the number of active subscriptions, especially with the standard fit initiative having been implemented.? He further adds, ?Volvo is a leader in engine technology and the products that have been offered come with the latest technology to improve fuel efficiency and to lower the impact of pollution by better emission norms. Coupled with the engine technology, the other parameter of machine design and matching hydraulics to enhance productivity has been the key success factor for Volvo.?
So will the excavator take over the backhoe market? LiuGong`s Sunil sums up the situation. ?It?s true that the backhoe has dominated the CE market. But the market trend is changing very fast as everyone is looking for a machine that is application-oriented, provides better productivity and cost-effective solutions. Over the last few years, excavator sales have increased drastically. As per the data from Off-Highway Research, the growth rate of excavator from 2009-2014 is somewhere around 187 per cent, where as for the backhoes, for the same period, the projected growth rate is 90 per cent.?
Going for Gold
Volvo?s EC210C excavator was awarded ?Machinery of the Year 2011?
While at the Baublatt ?sterreich awards in Austria in February, Volvo was presented with two awards by the Austrian trade publication Baublatt ?sterreich after it impressed an independent panel of judges.
Volvo?s EC210C hydraulic excavator won ?Machinery of the Year 2011? for its construction of a ski jump in Hinzenbach, Austria. The panel thought the EC210C ?performed brilliantly with exceptional stability and durability while transporting heavy steel mesh over a steep 35-degree slope.? The EC210C crawler excavator has the option of a hydraulically elevating cab, which significantly increases the operator?s visibility when sorting, loading or compacting. Volvo Baumaschinen ?sterreich (VB?), Volvo?s regional headquarters in Germany, also won the ?Golden Shovel 2011? award for outstanding contributions to apprenticeship training.
Thomas Schmitz, Managing Director, Volvo Baumaschinen ?sterreich, receiving the award said, ?It is an honour for me to accept this award on behalf of a great team of people who meet their daily challenges with passion. This award recognises both the advantages of an excellent product and the performance of a committed team, which is reflected in our efforts to satisfy our customers and provide reliable, quality machines.?
The mammoth machine
Larsen & Toubro displayed Komatsu PC2000, the 200T hydraulic excavator and largest-ever machine, at IMME 2010 in Kolkata. The mammoth machine with 12-cu m bucket capacity occupied prime space and was the toast of Salt Lake Stadium. Over 15 machines are working in India and increasingly becoming popular in large mining and coal projects across the country.
CHETRA forays into excavator market
CHETRA Machinery India, a 100-per cent subsidiary of Machinery & Industrial Group NV (M&IG), the largest Russian international manufacturer of industrial and earthmoving machinery, has recently introduced CHETRA brand 23T excavator in Indian market. The EGP230 is produced by its group company ? Promtractor JSC, Cheboksary Russia, one of world largest crawler machinery manufacturer.
Features of EGP230 include:
- Rugged design to prevent structural failures;
- Powered by SISU diesel engine model: 66 CTA-2V, which meets Tier-3 requirements;
- Unique hydraulic system built with parts and components of Bosch Rexroth, Kawasaki, Parker, Walvoil, Daewoo etc ensures reliable and smooth operation;
- Operator?s cabin meets all modern ergonomic requirements that provide good working conditions for operator during working time; There is a multifunctional electronic control unit with LCD monitor;
- ?Glonass? electronic system to monitor the performance of excavator; and
- High quality latest technology parts and components make this machine environment-friendly.
Sany introduces new range
The year 2010 has seen a massive jump in excavator market for Sany China. Sany China has sold more than 12,000 excavators in 2010 and now among the top three excavator manufacturers in China. After the successful year by Sany China for excavators, Sany India has now launched the excavator range on March 18, 2011 at their ultra modern manufacturing facility at Chakan, Pune. On the same day Sany India has signed the dealership agreement with Mangalam Auto and also handed over keys to the first three customers. Sany has introducing four models in the Indian market: SY75, SY135, SY215 and SY235, and the company is very positive that they will make a strong base for excavators in India.