With three full-fledged warehouses in Bhiwandi, Bengaluru and Gurgaon, Jungheinrich is expanding its reach across the regions in the country. Manojit Acharya, Managing Director, Jungheinrich Lift Truck India, shares more on the market scenario and the company’s plans for the Indian market.
How do you assess the growth of the Indian warehousing and logistics market?
The Indian warehousing and logistics market experienced a major thrust in 2017 when the government introduced GST, which was a long-awaited policy move from the government. Post July 2017, after the implementation of GST, the market experienced good growth. In 2018, the whole warehousing and logistics space saw a lot of investments with active participation of many international players. Thus 2018 saw a further growth in warehousing and logistics sector. In 2019, the growth trend continued through the first half of the year. Starting from July, the second half of the year showed signs of a slowdown. However, investments were happening, though at a lower pace till February 2020. From March this year with the onset of the Covid-19 and the subsequent nation-wide lockdown, the market was plunged into a severe slowdown. In spite of the current adverse conditions, the market is expected to recover soon though at a slower pace and 2021 will see more growth coming in.
How is the material handling equipment segment gaining from the growing warehousing and logistics operations?
Coming up of more and more warehousing facilities clearly means more market for warehousing and material handling equipment. Apart from the setting up of new facilities, the existing facilities are becoming more organised and consolidated. As the warehousing segment was consolidating for larger warehouses, new avenues of opportunities opened up for material handling equipment. With the warehouses grew larger and taller, there emerged the requirement for bigger equipment such as large capacity reach trucks, order pickers, VNA trucks, etc. Indian market has a large manual labour force and primitive kind of warehousing tools with less automation, which is now gradually changing with the consolidation of warehouse operations. Manual operations are making ways for hand pallet trucks, while hand pallet truck operations are moving towards battery-operated pallet trucks.On the other side, to meet the requirements of taller warehouses, operations are moving from reach trucks to VNA trucks and automation.
What are the challenges faced after the onset of Covid-19 and the subsequent lockdown? How are you prepared to battle the situation?
The onset of Covid-19 has a severe impact on the market. This is evident from the comparison of sales figures over the past few years. For example, the average monthly sales of warehousing equipment in the country during 2017 post-GST, was around 1,000 units. While the number went up to around 1,400 units per month in 2018, it came down to around 1,000-1,100 units per month in 2019. In April 2020, the total market plummeted into just 200 units a month, which is possibly the monthly sales 10 years ago.
When it comes to operational challenges, the biggest worry is demand creation. We would like to seek the government to come out with some policy measures to boost the demand, especially in the non-essential services sector. The second major challenge faced is related to the labour issues. The shortage of labour is affecting our operations on various fronts. For example, currently we are facing difficulties in moving our consignments from port due to non-availability of labour. Also, many a times, drivers are not available to transport the consignments to CFS and warehouses, and from the warehouse to other parts of the country. However, in the essential services sector, we are continuously serving our customers in the difficult conditions. When the lockdown started, we had a special approval from the government for serving the essential services sector for which our warehouses are open with our service team always ready to support the essential services.
How do you foresee the revival of the material handling equipment market?
In my personal opinion, irrespective of the lockdown, the situation is largely going to remain the same for a longer time so that we will have to live with this condition. In this situation, things like social distancing and other protective measures are going to be the way in our lives. Our customers will rely on mechanisation and the dependence on labour will reduce, which means sales of more handling equipment. Also, as an outcome of the current situation, segments such as e-commerce, food & beverages and pharmaceuticals are likely to grow in future, needing more warehousing operations. From this perspective, I foresee growth in warehousing equipment market, though at a slower rate. However, the growth will be faster in APAC region and India compared with the western market.
How are you planning your operations in the country post Covid-19 lockdown?
We at Jungheinrich have a huge focus on the Indian market. In spite of the current situation, we are not taking any panic-driven decisions. We are focusing on our sales and after sales services as always. We have to realign our sales operations with respect to the new normal. Our sales team is more active even in this difficult condition. Our aftersales services are also doing well. The team is working hard, especially supporting the essential services segments round-the-clock. We will be strengthening our aftersales team with more engineers, training
On a regular basis, we are giving top-most importance to aftermarket services. We provide all technical, maintenance and sales support to our customers across the country. We also impart training to equipment operators and maintenance staff of our customers. Our dedicated warehouses in Bhiwandi, Bengaluru and Gurgaon have been serving the aftermarket requirements in the respective regions with availability of spare parts and services.
How do you look at the policy support initiatives from the government?
I would like to highlight the labour issue which our industry and the country are facing today. It is important for the Central and state governments to jointly address this issue effectively. Also, the government needs to provide some kind of subsidies or incentives to companies supporting the essential services segments. The stimulus package announced by the Central Government will support the industry. The announcement for the creation of farm-gate facilities for warehousing and cold chain infrastructure will create new opportunities for warehousing equipment.
What is your outlook on the MHE market?
The material handling equipment market was growing at a rate of 15-20 per cent since 2014 and 2018 witnessed a huge jump of 40 per cent in growth. In 2019, the growth shrunk by 20 per cent. This year, the total market volume will be similar to that of 2016, which is slightly less than 10,000 trucks. From 2021 onwards, the market will grow with initial growth rate in single digits.
What are your future plans for the market?
India is a unique market and has requirements of all equipment, from basic handling machines to high-end automated machines. With revolution happening at a faster pace, our focus lies on material handling equipment and automation. We are also aggressively entering into racking system. We want to be a total solution provider in greenfield projects of small and medium segments, for racking solutions and material handling equipment. We will be launching more models of material handling equipment, which are specifically designed for Indian market with higher productivity and better service to suit Indian price levels. More market competitive products will be our near to medium term focus. On a long term, we have plans to do more automation in the market.
Our three warehouses are taking care of the market requirements of the respective regions. The Bhiwandi warehouse has a repair facility also where rental trucks are being taken care of. The Bengaluru warehouse takes care of the southern market, while the Gurgaon facility takes care of the north Indian market.
PRODUCTS & SOLUTIONS
Jungheinrich offers the entire range of products and solutions required for warehousing set-up, starting from manual hand pallet trucks to complete automation of warehouses up to maximum height of 44 m, including racks, ASRS system, AGVs, warehouse automation software, etc.