ACE is India’s leading material handling and construction equipment manufacturing company with a majority market share in mobile cranes and tower cranes segment. In addition to mobile cranes, ACE also offers mobile/fixed tower cranes, crawler cranes, truck mounted cranes, lorry loaders, backhoe loaders, vibratory rollers, piling rigs, forklifts, warehousing equipment, tractors, harvesters and other agri machinery.

Manish Handa, Vice President & Business Head – Earth Moving & Road Construction Equipment Division, ?Action Construction Equipment, speaks on the factors that are driving the demand for the construction equipment industry.

What is the present size and growth rate of the construction equipment market in India? How construction equipment market has evolved in the last couple of years?

According to our estimates, the market size for construction equipment for FY 2020 was 84,000 units. The Indian market for construction equipment has seen exponential growth. This rise is majorly due to government’s push for infrastructural development especially in roads, railways, rural development and industrial projects to name a few.

How is your company contributing to the sector?

With our yearly revenue crossing Rs 1,200 crore, we are proud to say that ACE, a 100 per cent Swadeshi company, is the market leader in both the pick and carry cranes and the tower cranes segments, holding over 60 per cent of the market share in each segment. We believe that the success of the construction industry is the barometer of progress for any nation. And, it’s our humble and earnest vision to be part of such a momentous transition for the nation. 

What are the new products and solutions offered?

We had recently launched the NX Series next-gen multi activity cranes. These new NX Series cranes perform multiple tasks apart from crane operations thereby adding versatility and providing multi-purpose utilisation for the users. These types of multi activity cranes with articulated steering are the first in the world and ACE has already applied for the necessary patents for the entire series.

Our all new rugged and reliable AX124 backhoe loader is powered with highly efficient 76HP and 96HP Kirloskar engines. It is equipped with improved hydraulic pump and advanced structured loader arm with higher breakout force while digging or loading materials, ensuring 10 to 15 per cent higher productivity. Further, it is fitted with globally renowned transmission from Carraro and hydraulic pump from reputed brands and is available in both two-wheel and four-wheel drive options.

These machines have been developed by ACE at their in-house R&D centre with our core proposition of offering value for money products with superior performance and reliability.

Which factors are driving the demand for the construction equipment industry?

Infrastructure push by government with increased focus in public-private partnership projects and inflow of FDI’s in the construction space has been instrumental in driving demand. The government has outlined several road works, building works and smart city development projects. All these will require construction and earthmoving equipment, which will result in the fast-paced growth of the construction equipment sector in India. Further, infra push will be dependent upon accelerating in availability of finance and construction companies emerging with stronger balance sheets.

How are infrastructure projects driving the demand for construction equipment?

The National Infrastructure Pipeline (NIP) is the key demand driver for the CE industry. Road transport, railways, irrigation, water resources, airports are the key projects covered under the NIP programme. It is expected that infrastructure spending by the government will continue to remain robust in the coming years. The government’s focus on infrastructure development is evident in fast pace of road development, which is now touching 33 km per day. However, problems of land acquisition and financing through new models have still not been fully addressed.

How do you look at the demand diversity in the construction equipment sector?

The demand in this sector has never been homogenous. There has always been a tipping of the scales with certain initiatives and certain regions outperforming the other. With the amount of importance given to nation-building projects through the PNGSY and MGNREGA programmes, it’s safe to assume that rural infrastructure development will shape the sector’s growth in the coming years.

What has been the impact of Covid-19 on the construction and infrastructure equipment industry?

The construction and infrastructure equipment industry is among the sectors that have been severely hit by Covid-19 pandemic and lockdowns. Nearly, all construction and infrastructure activities came to a standstill. There was a sharp slump in sales. Several equipment manufacturers even had to temporarily shut down their plants. In Q1, FY21 industry volumes fell sharply to >60 per cent YoY. However, the worst is behind us and the industry is now recovering. Second half has shown encouraging signs of a pick-up in the CE industry mainly driven by increased infrastructure spending by the government in the past few months and good rural demand.

With the government focusing on the vision of ‘Atmanirbhar Bharat’ how it would catapult growth for the construction and engineering equipment market?

We are proud to say that ACE is a 100 per cent Swadeshi brand and follows the vision of Prime Minister of “Make in India”. The government’s Atmanirbhar Bharat initiative will not only facilitate in manufacturing and sourcing of all products locally but will also help in improved collaboration with financial institutions, MSMEs and government regulatory bodies for all sorts of assistance. Better collaborations will further assist in creating better infrastructure, R&D and logistics. All this will make the industry more competitive globally and can help equipment manufacturers to further increase their production capacities in the future.

Explain the roadmap to success for the construction equipment industry.

Infrastructure is the very foundation of every strong nation and economy. According to the vision of our Prime Minister, Narendra Modi, India is coursed to growing into a $5 trillion dollar economy by 2024. This can definitely pave the way for the success of the construction equipment industry. Government spending on infrastructure and rapid urban development is at an all-time high. Also, the overall growth of the Indian economy, in the coming years, will further boost disposable income. This will in turn further increase the demand for better infrastructure and development.

What is your outlook on the Indian construction equipment market for 2025?

With the strong government push on infrastructure development and outlining of $1.4 trillion in NIP, we see a healthy growth for construction equipment industry in coming years and expect it to touch 1,40,000 units by 2025.