Infrastructure projects have given a boost to off-take concrete equipment like batching plants, truck mixers and concrete pumps. Equipment India takes a look at the market trends in the concrete equipment industry.

All told, the mood is very positive and business has significantly improved over the last year. There is a lot of potential across India as all the states, the rural and urban pockets included, are contributing for the business. Today's cust?omer has become more techno-savy and prefers reliable, maintenance free equip?ment which has low operational costs.

"The growth in the last two quarters was significant and we expect to grow even at higher percentage growth in the final quarter of 2010. We are particularly happy about success of our new models launched in 2009, like the concrete pump model SP1400 and batching plant model M1.25," says Sakthi Kumar, Chief Operating Officer, Schwing Stetter India. Talking about the growth potential he says, "The business potential in road infrastructure segment is huge and we already received big orders in last two quarters from some of our key customers to meet requirements of road jobs. We expect this trend to continue in the next two to three years, at least. As far as the RMC and real estate segment is concerned, RMC volume sales have gone up in most of the metropolitan cities and Tier-II cities. It is encouraging that many of key players in RMC have started their expansion in the last quarter and current quarter. We expect this trend will continue in the years to come. We expect to grow by 25 per cent in 2011-12 and 2012-13."

Says BR Gururaj, Vice President - Sales & Marketing, Macons Equipment, "The market has picked up faster this year and we are hopeful of ending this fiscal with 40 per cent growth. In fact, our plan is to double the turnover in the next two years; last year, we ended up with Rs 60 crore, this year we will be surpassing the target figure of Rs 100 crore, and by 2013, our aim is to clock Rs 250 crore. We have almost 2,500 installations in the country so far,"

Emerging markets

According to K Sunil Kumar, Managing Director & CEO, Revathi Equipment, the potential for concrete equipment in India over the next few years will be quite substantial and the RMC industry will witness a steady growth. The conversion factor for cement to RMC will soon exceed ten per cent. This mainly, is due to factors like focus on urban development, infrastructure projects in power, road, ports, railways, irrigation and also the emergence of activities in the Tier II and III cities. He explains, "Rural development and mechanisation is helping the concrete equipment industry imme?nsely. The requirement for smaller capacity batching plants and concrete pumps are on the rise in this market."

"Market sentiments are very bullish. The real estate sector which was earlier lagging, is actually now pushing up the demand of concrete products. We have registered a y-o-y growth of 30 per cent which is very encouraging," says Arun Savanur, Vice President & Head, Constr?uction Equipment Division, Greaves Cotton. Arun further adds, "2009-2010 toplines for our division was close to Rs 150 crore and for the year 10-11, we expect to grow our topline in excess of 60 per cent. The growth graph looks challenging but looking at our plans, we feel we will be able to achieve the same."

"For the concrete equipment segment, the market has opened up this year as most of the projects have started receiving funds from clients and the government. Equipment financers are also releasing funds for equipment which was very tight last year. Growth of business for the concrete equipment segment for this year is 40 per cent as compared to last year," says Ranjeet More, Managing Director, Universal Construction Equipment. He adds, "Demand for 30 cu m and upward batching plants is increasing, for big projects and for roads and bridges, and also for RMC projects. There are approximately more than ten manufacturers of 30 cu m and above, and every company is enjoying his share in the particular market by offering different models (stationery and mobile), different types (inline, boom scrapper), with different mixing techno?logies (pan, planetary and twin shaft)."

"The current market size as per our estimate is approximately Rs 800 crore and growth for next three to five years, is estimated at CAGR 20 to 30 per cent,'' says Arun Savanur. "Based on the current available capacity of concreting products in our country, we believe the next one to two years` projected demands can be met. But, with the push given by the government in infrastructure segment through PPP and the increase in housing demand due to implementation of direct tax code (disposable income to increase for every individual), we see the projected demand outstripping the supply, in the medium term, for concreting products."  
Says Michael Schmid-Lindenmayer, Managing Director, Putzmeister Concrete Machines, "We are very proud that we have grown by more than a hundred per cent compared to the previous year in Q1 and Q2. Also in the difficult year of 2009, we could grow, and this growth can be considered as real growth, and not as a rebound from the recession. The order book for Q3 is already full and Q4 is one of the strongest quarters in India. 2010 seems to be a very successful year for Putzmeister. In 2011, we feel that the business will continue to grow in a fast pace. I personally would prefer to expand slowly and steadily but we have to meet our customer's requirement."

Concrete pumps are com?plicated products and form just a small niche segment in the construction equipment market. There are only a selected few reliable concrete pump suppliers in India who can offer complete after-sale service and spare parts back-up support required to keep these products in running condition. Speaking about the market potential for concrete pumps Michael says, "The truck pump market did not grow in the first half of the year due to free capacities from the Delhi Metro. Anyhow, we can see that in the second half of the year, the market for boom placers has gained momentum. We assume that the market will be appro?ximately a hundred units in 2010 and out of these, approximately 60 units will be supplied by Putzmeister." He further adds, "The trailer pump market has developed in a very dynamic manner. The recovery could be seen already in the last quarter of 2009. We assume that the total market of trailer pump in 2010 will be approxi?mately 1,500 to 2,000 units. Our aim is to sell approximately 500 trailer pumps this year."

Gururaj of Macons says, "The special product segment is a fast emerging market. We have good expertise in this area and have already got 40 per cent of the market. It is a capital intensive market, and the project take-off may be slow. Many standard batching plant manufacturers are not focusing this market as it is a time-consuming process. The technology differs, as each customer has got his own mix design, the plant layout is different; for example, the hume pipe manufacturing machine is imported, and we need to integrate with plant design. We need controlled concrete which otherwise affects the quality of the end-product. Lots of international players are setting up office here, and one noticeable shift is that these players are focusing not only on high-end customers but also the bottom of the pyramid. So the spread is fast and the volume increase is also fast."

According to Sunil Kumar of Greaves, the market for pre-fabricated slabs for floor is an emerging one, in India. This calls for low slump concrete, which needs to be produced in counter-current planetary mixers with temperature control. Sunil says, "We foresee a good potential for this specialised equipment and are geared to tap this market segment through certain strategic tie-ups."

Technological trends

According to Michael Schmid, the trend is more towards economical concrete pumps and therefore to the S-Valve tech?nology. The gate valve technology which represents still the majority of the pump population in India has too high a wear-and-tear and therefore, has become out?dated in Europe since the ?70s. He points out, "Customers in India who have tested the S-valve technology are very pleased with the long service live of the main wear parts and by the low diesel and hydraulic oil consumption. Due to the closed circuit, S-valve pumps can develop higher pressure which allows pumping to greater heights. One additional advantage is the cleaning of the pumps; due the closed circuit, water can be pumped by the S-valves to clean the entire system. Another advantage of S-valve pumps is the reverse pumping. Using reverse pumping, smaller choking can be solved without disassembling and cleaning of the pipeline."

Sunil Kumar supports this view. "In terms of a technological shift in concrete pumps, the sophisticated models with S-valve technology are gaining popularity when compared to the flat gate valve pumps. The industry and consumers unde?rstand pumpable concrete mix designs, which facilitate the usage of new technology concrete pumps and which also drastically reduces the maintenance expenses on them." With regard to the trends in batching plants, Sunil Kumar says, "We are witnessing a shift in the capacities of the batching plants erected, which earlier used to be mostly 30 cu m/hr. In today's context, preference is for higher capacities over 60 cu m per hour. This trend is also due to the high land value and related high fixed expenses."

Speaking about the challenges, Sakthi Kumar says, "The increase in demand has necessitated fast response from the vendors and some of the smaller vendors have hiccups in scaling up their capacity. Skilled manpower is another issue affec?ting the industry across different areas. Training assumes higher priority in current situation in sorting out this issue. As far
as operators' availability is concerned, we are encouraging our customers to depute more candidates to our training facility in our factory."

With massive investments happening in the road sector, the prospects are very bright. Any road project, whether asphalt or concrete, needs flyovers, culverts, drains, crash barriers made of concrete. We may see big growth in this segment if the government decides to build more concrete roads in future. The rural segment will still take some more time to start consuming concrete in its true sen?se. However, this segment too will pick up in the near future. The main growth drivers are the infras?tructure projects which are crucial for the further development of India. Also, the real estate in the metro cities has gained momentum. There is huge potential for concrete pumps in Tier II and III cities because only ten per cent of the concrete is pumped in India. If smaller contractors and construction companies start to convey concrete via pumps instead of manual labour, the pump volumes will have great growth potential.