“Broad-based growth is expected in major segments of CE”

Manish Arora,
business head,
Mahindra Construction Equipment.

 

 

Manish Arora, business head, Mahindra Construction Equipment, says, a host of programmes will continue to propel business growth irrespective of the outcome of the general elections.

What is the growth outlook for the CE industry in the nearfuture, especially in the near-term?

The construction equipment sector in India is growing at a scorching pace, driven by thehuge investments being made by the government and the private sector in infrastructuredevelopment. In fact, the overall Indian construction equipment market is expected to growby a CAGR of 6.2%, backed by infrastructure spending estimated to be about 10% of gross domestic product (GDP) during the current five-year plan. The industry would continue to grow at asteady pace till the general election next year. However, the outcome of the election mighthave an impact on the industry mood but the host projects initiated would keep theindustry in motion going forward irrespective of the results.

Broad-based growth is expected in all four major segments within CE, namelyEarthMoving, Road Construction, Concrete and Material Handling. The combined sales of thesefour equipment types, which dominated the market, increased by 37% in 2016 and 17% in 2017. Of these, backhoe loaders, crawler excavators and mobile cranes accountedfor 76-79% of the total market during 2013-2017. The share of mobile compressors,compaction equipment and wheeled loaders remained in the range of 16-17% duringthe same period. We expect these sectors to continue to
drive volumes.

 

What are the key issues faced by the industry? How would you like to address them?

With the Make in India campaign focusing on 25 major sectors of the economy of which construction sector is also a part and Smart City initiative aiming to upgrade and build 98 citiesstressing low-cost housing, massive opportunities have been opened for the constructionequipment industry in the country. Moreover, push for improvement in infrastructure includingoutlay for roads through Bharatmala and Sagarmala projects, railways, through dedicatedfreight corridors, bullet and metro train projects and development of smaller airports throughUdaan scheme to improve connectivity, would add fuel to the fire. Gearing up to the newrealities there would be increasing need for modern and mechanised methods ofconstruction to ensure timely delivery of projects. These would not only create demand for newequipment but also increase the utilisation of the existing fleet of equipment. The increase inutilisation of old would invariably lead to higher after sales and rental business. Whilstintentions have been in place, execution would be the key going forward. Moreover, push forfavourable land acquisition policies and fast clearance of pending projects are some of theother measures that can be further taken by the government to provide a boost to theeconomy of the country and turn these plans into reality. Also, from the policy perceptive, scraping policy and emission norms for the CE segment.

 

Do you think, the era of Indiabeing a less expensive manufacturing hub is over and other economies such asVietnam is taking over?

With drive towards the Make in India campaign, India acting as a low-cost manufacturing baseis going to be strengthened. It is imperative to create a huge skilled manpower and ecosystemin order to continue leveraging the advantage.

 

Tell us about any new equipment that is noteworthy.

Our new generation Backhoe loaders, Mahindra EarthMaster, comes with a powerfuldiesel engine at the heart and amazing hydraulics define the best of backhoe loaders inIndia. The diesel engine creates power while the hydraulics amplifies it. The power ofthe diesel engine and the capacity of the hydraulic systems differ from variant tovariant. The machine offers best-in-class fuel efficiency (4.5* litres per hour) with theproven Mahindra DITEC engine that is a compact 4-cylinder, 3532cc engine, turbo chargedinter cooled engine that is BS III emission compliant which implies it saves10%.Designed with best ergonomic characters, the machine is made after four years ofresearch and over 20,000 hours of machine testing under the harshest conditions. Itoffers a great reduction in overall maintenance cost. The machine comes with BananaBoom with 7% more reach, rugged and reputed gear pump and has maximum digdepth and loader dump height. It has remote monitoring features that allows you to getdaily work report, fuel level notice and maintenance warning through SMS. Other user-friendly features include effortless operations with joystick, radio with a 2-way Speaker System that facilitates communication with
the operator.

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