According to a report released by ICEMA, the current market size of the construction equipment including backhoe loader, concrete mixers excavator is around $2.8 billion. Further, the Indian construction equipment industry is expected to grow to $5 billion by 2019-20.
This growth and optimism was evident at EXCON 2015, which was held in the grounds of BIEC in Bengaluru in November. With the theme on ?Make India - Building Infrastructure, Building the Nation?, the expo attracted exhibitors, including a huge number of foreign companies, to participate in this mega event. As Piush Goyal, Managing Director, Kelley Material Handling Equipment India, and Member, Excon Steering Committee, shares, ?Excon 2015 exceeded expectations with an overall record in terms of area, number of exhibitors, visitor turnout, and business generated. This was the biggest-ever Excon we had so far with maximum exhibition area. There were overall 810 exhibitors including 271 foreign exhibitors and eight country pavilions. The total visitor turnout stood above 31,000 which is an all-time record. Excon 2015 also generated a business of worth Rs 600 crore, which is also a record in the history of Excon.?
Over a hundred new products were launched during the exhibition by various equipment manufacturers, reflecting the buoyant mood of the industry. Some of the notable launches were by JCB, Schwing Stetter and XCMG combine; Larsen & Tuobro Construction Equipment along with Komatsu and Scania Trucks; Volvo Trucks, VE Commercial Vehicles, Tata Motors, Tata Hitachi, Daimler India Commercial Vehicles, Puzzolana, Caterpillar and Doosan Infracore India. Other recognised industry leaders like Atlas Copco, Kelly Material Handling, KYB Conmat, Kobelco, LeeBoy, Ajax Fiori, Palfinger, Ammann Apollo etc, had also put up impressive displays of their product ranges. The event was replete with live demos of equipment and visitor entertainment sessions.
EI spoke to leading manufacturers to delve deeper into what the CE industry has to offer in the years to come, their expectations and the company?s launches at the expo. Refer to the following pages for details.
?We figure amongst the top 100 companies of world in sustainable construction.?
Atlas Copco has been a key player in the Indian construction and mining equipment segment. Nitin Lall, General Manager, Atlas Cocpo Construction Technique, explains the company?s future plans with SHANKAR SRIVASTAVA.
Do you undertake turnkey execution contracts?
We are not largely into contracts but we have the world?s largest equipment like road package and HV 10000 is the largest rock breaker for mining. However, we are totally attuned to do a contract as per customer requirement like: only for posting service personnel at site or spare parts at site or cost capping etc. For roads, we consider ourselves to be asphalt specialists and we offer any or all of such contracts.
Do you offer any value added services and training on your products?
We are very strong in this aspect. Atlas Copco has a strong Training Calendar throughout the year. We conduct training at various places but our hubs are Pune and Nashik, where we have manufacturing facilities. About 50 percent of our team comprises service engineers who conduct regional programmes closest to our dealers and customers.
You operate in a niche. Do you have any plans to get into other areas? What are the new products one can expect in future?
By niche, I mean that we would like to grow in the areas which are closest to us. Atlas Copco believes in growing in business which is closest to our core. I only sell products made available by Atlas Copco. I do foresee more mountings and attachments for large excavators; investments in smaller city pavers with 5-5.5 m paving width; new models in diesel generators coming in and we continue to innovate. For example: the type of air compressors displayed by us did not exist three years back which are more energy efficient and environment friendly.
Dust is a DNA for India. What technologies have been introduced by Atlas Copco in their genes to address such issues?
Related to environment, there are some aspects we can control and some we cannot. In our machines one can control fuel consumption, carbon footprint etc. We collaborate with our suppliers to make continuous improvements, most import is sound emanated by the equipment. We have set up measurable targets within the company for these aspects and we figure amongst the top 100 companies of world in sustainable construction.
?In a short span of 3 years, LeeBoy is recognised as a long term player.?
A relatively new entrant in the Indian construction equipment industry, LeeBoy has done well in a short period of operations. Amarnath Ramachandran, President, LeeBoy India Construction Equipment, elaborates on the company?s plans with SHANKAR SRIVASTAVA.
How has your experience been at Excon?
It has been a great show. We have seen two main differences. One, alot of foot falls of large and small contractors who were aware of newer techniques, looking for improvements in the machinery, very discerning and unlike the past more receptive to high tech features. Second,the visitors had a focused plan in their mind and spent time taking clarifications or notes or decisions. We have already sold 15 large graders. The size of incoming enquiries is larger and we are upbeat as business is coming around the corner now for construction equipment.
Any new launches?
Interestingly, we have been selling our backhoe loaders in the global market and excavators in Africa for the last several years. All our machines are higher spec and fully loaded with features. What others offer as optional are standard for our machines. Road equipment is our main portfolio basket and we focus on the same. For the show xwe have displayed our entire product range to make potential customer aware and discuss the whole package of requirements with us.
So are you proceeding in line with the Make in India movement?
Most of our machines still have high import content; the current volumes do not make it viable to produce in India. Having said that, we localise whatever is possible in India but sell identical machines all over the world.
The road sector has seen some traction recently with a lot to be happening in this sector. How are you gearing up meet to the change in the sales momentum?
We doubled our numbers over the last two years, even though we are not a very large company because equipment like grader does not sell in large volumes. Secondly, Supreme Court had ruled for peripheral expressway in Delhi giving them only nine months to complete the work. This resulted in a large number of machines being deployed in a single project. Example: 90 units of graders were deployed as against traditional 40-50 units. It is encouraging for us that the government is determined to accelerate the project completion time.
In line with the Indian environmental and operational or maintenance abuse attitude of the customers, do you provide any protection in your equipment?
Yes. All our tanks have pressurised breathers so dirt cannot ingress.Most of our hydraulics are piston hydraulics, high quality imported filters and we do not have any contamination problems. In our graders, we provide a lot of inter locks, for example, if the throttle is engaged the engine will not crank, cam lock in start key, once you start one cannot change gears without stopping, emergency stop switch and more than 120 operational interlocks are programmed inside the machine for protection. For example, in most machines if you engage the transmission with a bad clutch it will break the controller by passes. If you ruin five out of six gears it will light up the ?limp home? symbol.
What is your take on LeeBoy brand image?
All the machines are with high spec with very good features and these are meant for high performance, ergonomics, fuel efficiency and all systems are equipped for switching to Tier-IV final expected in 2020. We have all the electronics located in the cabin and all our machines are rated at 55oC.
Our brand is flexible to customer needs, we customise to their needs, we are responsive and adapt the product s to our customer?s needs. Having said that, I would like to mention that although we have been present in India just over 3 odd years, our brand is recognized as a long time player.
We intend to take a much bigger stall in Excon 2017 where we will launch new graders and pavers. We are having our strategy meet shortly and I will be able to provide more inputs thereafter.
?We plan to introduce six new production lines to meet the market demand.?
How do you visualise the market for your products?
There are some challenges to be overcome but everybody is moving the right direction. We are manufacturing products according to the requirements of the industry in different segments. We have promised our stakeholders to be their partners and we are making all efforts to put things in place.
What is your take on the growth trajectory?
It all depends on the government, but we are optimistic because we see that they are building the confidence of the developers, investors and the contractors.
How does Ammann technology stand out in comparison with others?
Ammann is a global player and its association with Apollo has made us re-engineer our products to meet the market requirement and more importantly the project requirement. We have proved ourselves to be a top-notch supplier and we will be able to sustain our leadership. We plan to introduce six new production lines to cater to the market demand.
In light of many foreign countries investing in Indian road projects, is there a possibility that they will insist on deployment equipment from their preferred suppliers?
You cannot undermine the importance of roads in our country. Those countries are suffering and any benefit to them is a plus for them. We are now living in internet global environment and there is no room for making such demands. In the supply chain there are no engineering boundaries for equipment. Nowadays in India, it is altogether a new ball game and investors can no longer insist on preferred suppliers as was the case with many Malaysian companies earlier, who all failed miserably.
?Indian market is price sensitive and competition is intense.?
Schwing Stetter is among the world?s pioneering manufacturers of concrete construction equipment such as concrete batching plants, concrete boom pumps, concrete pumps and concrete truck mixture. VG Sakthi Kumar, Managing Director, Schwing Stetter Sales and Services Pvt Ltd, shares more on the company?s new launches in conversation with SHRIYAL SETHUMADHAVAN.
Which sectors are taking off and benefitting the company?
Roads is one sector and there has been recovery in a small way in irrigation and hydro projects. We hope that the power segment will take off next year, followed by real estate, which will be the major driver for our business growth.
As manufacturers, what are the challenges you face in this scenario?
India is a price sensitive market and the competition is intense. Everybody is working at less than 50 per cent of their installed capacity. So, where the manufacturers are really desperate to take the business, the cake is becoming smaller and the share is difficult to get. But, once infrastructure activities expand, it will automatically generate an opportunity for everybody.
Tell us about your launches at Excon.
We have launched a batching plant M30Z. This is a revolutionary product where everything is inbuilt in the equipment, bringing the set up cost down. Also, earlier, each of our pumps had a different look, but now they have become a family. Then, we have also brought in a new placement machine called RVH 18, which is more suitable for spreading concrete. We have introduced a 150 hp motor grader and a 3 tonne and 5 tonne loader. In self loading mixture, we used to have 4 cu m, but have now launched a 2.2 cu m mixture. We also have five new types of control systems launched for the batching-plant, which helps the plant communicate to the maintenance team via sms regarding how much it produced in a day, if there is any requirement, etc.
?We have launched CAT 360o ADVANTAGE in India.?
How do you visualise the Indian market in infrastructure and mining?
In 2015, we thought that India will reach 20 km of roads in roads but actual was 14 km per day which is an impressive 100 per cent growth over past years. I am optimistic for 2016. We have launched 313 and skid steer loaders as part of our brand. I expect moderate growth in roads, bridges, airports and ports. In terms of mining which is a very important segment for our strong product portfolio starting from surface mining to others, we see a lot of traction. Coal India has a target of 1 Billion tons. Currently they are at 550 million tonne. In this segment we see a lot of prospects; many players are active in this market and hitting the ground, so are we. Starting with over burden removal to coal extraction we expect a very positive growth for us, in both short and long term. The government also needs to prove themselves. Hence we expect things to happen.
With the start of over burden removal in coal mines do you see any acceleration in the sale of associated equipment?
Absolutely. We see a lot of traction for our 49 and 74 tonne machines; excavators and trucks. I would like to mention that our trucks are lifetime equipment which can be fully rebuilt two or three times unlike on off highway trucks.
What would be the trends on equipment offerings in future for India?
Small machines like 313 excavator, D2 and D2 L dozers are expected to sell in high volumes. Caterpillar has all the machines in its portfolio, with a global footprint. As and when required we can bring in any equipment. In Caterpillar we establish tractable equipment programmes and introduce products in the market.
In light of many new entrants in Indian market, what is your strategy to sustain Cat?s leadership?
In India, we wish to offer best value to our customers with equipment having multiple lives. We will stick to those principles and fundamentals. At the same time, we wish to understand our customers? expectations and in line we have launched CAT 360o ADVANTAGE in India.
?Road equipment segment can grow at 15 per cent.?
Over the past 25 years, CASE India has consistently remained a market leader in the vibratory compactor segment and the only company to have sold over 7,500 units in India. Abhijit Gupta, Managing Director, elaborates the company?s experience at Excon and its outlook on the industry with SUDHEER VATHIYATH.
Could you brief us on the products on display at Excon? What is the response?
Our base platform is backhoe loaders and compactors and currently we are doing some value added features to our existing ranges according to the regional requirements. The most important and recent product development is the motor grader which we seeded two years ago, but launched last month only. Now with road projects are picking up this will be a good opportunity for us.
Response at Excon was good with a fair number of customers visiting our stall as there was a continuous flow of people these days, which was not there in the previous editions. This shows that definitely demand is there, things have started moving and should be better in future.
What is your outlook on the construction equipment industry?
In the backhoe market, on an average we should be growing at 5-10 per cent. For the road equipment the outlook is extremely positive and should grow at a rate of at least 15 per cent in the next two years.
What are your future course of action in line with the government initiatives?
Government has to initiate and plan, we will support by way of equipment required. We expect more to happen at policy level, like fund clearance, land clearance, support on taxation issues, implementation of GST, etc. We are all looking at 2016 as a good year for us. We will do our part and hope the government will support with their initiatives. Customers are our key supporters and we will remain close to customers.
?We may introduce asphalt plants to complete the value chain.?
Could you give us some idea about the numbers for this year?
In compactors we produced 650 machines locally, overall 750. We expect a potential to touch 1,000 units in the next three years. With our small paver scheduled for launch next year, we expect to go to around 200 units for them. Our biggest opportunity will be crushing and screening machines, where we have the least market share, although globally we are successful. So I see no reason why we cannot do it in India, because most of our road contractors would like own crushers. This year we have already delivered 20 chassis and we are putting the infrastructure in place because crushing and screening requires a lot of application support.
What will be the next generation of paving equipment?
The next generation of paving equipment will be more or less the same what we have today. We will not only concentrate on machine building, but also will look into the whole process of building roads which starts at one end by producing asphalt, then laying asphalt, also milling asphalt for repairs is our main target. Secondly we want to improve the quality of roads because governments spend a lot of money. So, higher the quality of the pavement, the longer is the life time; higher the savings for the government, more roads can be built with the money saved. That will be our focus for the coming years.
What has been the growth in equipment sales?
This year the growth has been around 70 per cent compared to last year which is phenomenal. It took us five years to double our revenues.
What is your vision for India?
Our vision is linked with the government?s investment on roads and mining. We are ready with a large number of products from Vogele and Hamm. We are the market leaders now and we have to create opportunities in asphalt recycling.
?We are aligned to the contract mining segment as it is taking off in a big way.?
Volvo Trucks launched its largest capacity multiaxle dump trucks for Indian mining at EXCON 2015 in Bengaluru. The company is the only manufacturer to offer higher capacity 5 axle mining dump trucks in India, which is based on the successful and globally proven Volvo?s FMX platform. These new high capacity dump trucks are being introduced to enhance the productivity in line with the increasing demands of coal production. The FMX 520 10 x 4 dump truck offers a 33 per cent higher capacity and the FMX 480 10 x 4 offers a 28 per cent higher capacity compared to the current 8 x 4 solutions available in the market. At the expo, Volvo Trucks also showcased a highly customised coal haulage solution with 33 cu m bodies, which is the largest coal haulage truck in the Indian market along with their flagship model the FMX 440 8 x 4 I-shift.
The group company - Volvo Group - in India has its presence across trucks, buses, industrial and marine engines, construction equipment and financial services. In conversation with SHANKAR SRIVASTAVA and SHRIYAL SETHUAMDHAVAN, Vinod Aggarwal, CEO, VE Commercial Vehicles, Pierre Jean Verge Salamon, President, Volvo Group Trucks India and Dimitrov Krishnan, Vice President, Volvo Construction Equipment India share more on their offerings in the contract mining scenario.
Pierre Jean Verge Salamon: Our new launch is a clear proof of what we deliver for customers in India. For the Indian market, we have developed a unique set of solutions and configurations to deliver excellent performance for our customers. Coal India has said that they will double the output for the next five years from 500 million tonne to 1 billion tonne. Considering this, we should be able to double our growth in the next five years.
Vinod Aggarwal: In contract mining, it is not only about buying the trucks, but getting into lifetime relationships. So we get into the entire gamut of services associated with running the truck, which includes training of the driver, setting up on-site sports centre at remote locations, making the parts available and giving various options for maintenance of contracts. Also, our vehicles are offered with the advanced Dynafleet telematics system. So the relationship we are building is beyond that of a seller and buyer. This has led us to control more than 60 per cent of the market share in the high-end mining segment. The excavators sold by our group company Volvo Construction Equipment can also go along with it. This year we have grown by over 50 per cent; against 650 units sold in the first 10 months last year, this year we have sold 1,000 units.
Dimitrov Krishnan: The contract mining segment in India is taking off in a big way and this is the sector that we are aligned to the most. The coal mining contractor is the prime contractor and the bigger class of excavators is mainly for these contractors. Our machines for mining are not just sold to the government but to the contractors who are doing the job. In September 2015, we launched the 750D and it is in sync with our Volvo truck FMX 480 and the 520, which were recently launched in EXCON. So, Volvo Group offers a good combination of products at lower cost for coal mining contractors, considering that the coal mining contractor is cost conscious. We are a complete package, where if we sell equipment, we can also offer finance and service the contractor.
Quick bytes from exhibitors and visitors
JCB showcased 25 Made in India machines at Excon 2015. All our products are manufactured with the philosophy of ?one global quality? and our Made in India products are exported to over 60 countries.
- Vipin Sondhi, Managing Director & CEO, JCB India Ltd
Puzzolana Group is in a growth trajectory and that too in the coal mining business for surface miners, air breakers, sizers etc. We have also launched tracked plants which are cost effective, with 25 per cent extra production capacities on a diesel-electric platform, at the same price.
-Rajan Khoda Business Development Adviser, Puzzolana Group
Generally I see mostly exhibitors only on the first day, but first time I saw some customers also from the first day here at Excon 2015 which is a good sign. This shows that the market scenario is improving.
- Sameer Malhotra CEO, Shriram Automall India Ltd
In Indian market the awareness level of access equipment and AWPs is growing. Haulotte India is the own subsidiary of Haulotte France and going forward we will be having our own distribution centre in India. We are waiting for the market to be matured and the GST to come in.
- Souma Ray Director, Haulotte India Pvt Ltd
We have done well in the first half of the financial year with our sales growing at 58 per cent. There is competition visible in every category of machines and more manufacturers have entered Indian market. Everybody is expecting India as a large consumer of construction equipment.
- Kairas Vakharia Senior Vice President - Innovations & Business Head - Construction Equipment Mahindra & Mahindra
?We have innovated to meet the business challenges in the rental industry, by creating 50 odd spokes and hubs spread over all regions; developed a flat organisation; downsized our fleet to 1000 units by removing slow moving equipment and substantially increased our interface with customers.?
-HS Bhattacharjya, Managing Director, Quippo Construction Equipment Ltd
?Excon 2015 was excellent as we got plenty of enquiries. We could expose to more and more new customers especially from the Middle East, Egypt, Sri Lanka, Bangladesh, etc. We have introduced a new tower crane camera system which can be used for any type of tower crane. ?
- PV Ramdev, Managing Director, Everest Engineering Equipment
?We see great opportunities in Indian market in the high-speed railway corridor and underground metro projects coming up in the near future. We came here not only to sell our products but also share our technology here and manufacture products and provide services as well.
- Stanley Zhu Vice Director of Overseas Marketing Department, China Railway Construction Heavy Industry Co Ltd