Broadening horizons for material handling

An overviews on the business growth and technologies that will drive the MHE market

Anil Bhatia,
Vice President,
Sale and Marketing,
TIL Ltd.

Anil Lingayat,
Executive Vice President & Business Head,
Godrej Material Handling

R Haridoss,
Vice President-Business Development,
Powerbuild Pvt Ltd

Sunil K Gupta,
President,
KION India

The global market for Material Handling Equipment (MHE) is projected to reach US$134.8 billion by 2020, driven by the growing emphasis on production automation. “The key factor fueling adoption of MHE in mass production is automation of manufacturing processes, against a backdrop of growing pressure to optimise raw material, resource and energy consumption,” informs Anil Lingayat, Executive Vice President and Business Head, Godrej Material Handling.

In 2016, the automated MHE market was valued at USD 28.31 billion and according to Global Business report on material handling business it is expected to grow at a compound annual growth rate (CAGR) of 7.8 per cent between 2017 and 2023. “Other favourable factors supporting growth include growing investments in plant upgrades, technology innovations, and expansion of manufacturing base in developing markets. Asia-Pacific constitutes the fastest growing regional market worldwide with a CAGR of 6.1 per cent over the analysis period, driven by the rapidly expanding infrastructure needs of the automotive, construction, energy, electronics, food and beverage, retail, logistics and warehousing industries, says Lingayat.

Indian MHE market has a huge potential to grow in coming years, believes Sunil K Gupta, President, KION India. He adds, “Market witnessed a growth of approximately 20 per cent year-on-year basis in 2017. There is high growth projection for electric and warehousing equipment (WHE) segment in near future.”

The growth of 2017 is continue and we are now witnessing the same level of growth in 2018 so far and trend to be continued in whole year of 2018. “The Indian MHE market is highly competitive with the presence of many local and imported players offering varied solutions,” he adds.

“The growth in electric forklift market is driven by a shift towards environment friendly products and WHE market growth is driven by an increased focus on efficiency in warehouses driven by segments like e-commerce,” informs Gupta.

“The infrastructure sector is in the midst of a growth phase after a protracted slowdown. The MHE sector is likely to reap rich benefits as well, states Anil Bhatia, Vice President, Sales and Marketing, TIL Ltd. He adds, “The five major factors that would favor this segment are government's clear focus on infrastructure by way of targeted budgetary allocation, faster clearances and removal of other bottlenecks to on-ground activation of projects; better availability of capital through innovative government initiatives like REITs, IIFCL, etc; big-ticket projects aimed at port modernisation and new port creation under the Sagarmala initiative; increased palletisation and containerisation of goods, and; a shift in buyer preference towards higher capacity equipment.”

R Haridoss, Vice President-Business Development, Powerbuild Pvt Ltd says,”Material Handling Equipment (MHE) sector is growing rapidly in last couple of year and we foresee a good growth in future too. Government of India is also pumping lot of money in infrastructure, Pvt organisation/PSU are also expanding their capacities in cement, Mining, power and Oil and gas sectors. We are expecting MHE sector would grow by in the range of 15-20 per cent this year and sustain over the next few years. As the economy of a nation improves, wages move upward and standard of living becomes better than yesterday. This results in higher cost of labor. Machines grow more lucrative than men for doing the job. And there comes material handling equipment.”

Major reasons that would change the dynamics
Briefing on the major reasons that would change the dynamics of material handling equipment industry in India Gupta says, “The main growth driver of the business is increase in industrial production followed by modernisation of logistics infrastructure. Government spending on infra segment and prudent steps to drive growth is catalyst for the industry.”

He adds, “Implementation of GST in 2017 was very positive for the industry as it has removed the cascading impact of multiple taxes; which is very positive for hiring segment as overall cost of machine to them reduced hence better ROI. The advance cargo handling methodologies, growth in port segment, growth of e-commerce and increasing space crunch will be other drivers of MHE market growth.”

“Construction of modern built-to-suit warehouse space and consolidation of warehouses post GST coupled with increasing penetration of advanced technologies, such as RFID, IoT, and voice picking, are expected to drive the MHE market over the forecast timeframe. The evolution in the technology to assist smooth warehouse and logistics operations in meeting customer demand is rapidly changing the business environment,” explains Lingayat.

Haridoss shares few reasons that would change the dynamics of material handling equipment industry in India.
• Apart from the tradition material handling in core sector there are many other segments which are contributing to growth like warehousing equipment, automated MH systems, cargo handling systems, baggage handling systems, truck loaders/unloaders, etc.
• Construction industry is growing with a rapid pace to meet the infrastructure demand of India wherein new highways/road, rail network, smart cities, low cost houses etc are coming up.
• After a slowdown now real estate also recovering and there are equipment like lift, cranes, machines like bar bending are in high demand and fast moving.
• Material handling in industries like F&B, rice and grain mills.
• Material handling in pollution control equipment in various industry as well as municipal corporations.

Technologies that will drive MHE market
Depending on the need of the industry, the MHE industry offers a wide range of products. As the name suggests this sector deals with equipment that relate to the movement, storage, control and protection of materials, goods and products throughout the process of manufacturing, distribution, consumption and disposal.

“The major trend these days is to make machines more environment-friendly,” states Lingayat. He adds, “There is a trend towards the usage of more electric driven/battery operated technology for various equipment which are more environment-friendly. Trends are focused on operator comfort through ergonomics, ease of operations and low cost of maintenance. Users are outsourcing equipment, operations and the trend seen moving ahead is of hiring and rental services so that they can focus on their core business. Another trend that we find among users is that they are revisiting their supply chain and exploring newer ways to store and handle material more efficiently.” Nowadays a lot of emphasis is being given in the material movement and handling space, and hence designing of warehouses and factories are being done accordingly. People are no longer just looking at the price of the equipment, but the overall productivity of their people using the equipment, space and material movement. It is also seen that more mechanisation and automation in terms of warehouse management is taking place for handling in the warehouses as well as entire logistics chain. Lack of availability of labour for menial jobs and rising cost of labour and space are also driving automation process.

Godrej Material Handling offers a wide spectrum of solutions across equipment types, capacities and technologies. Its range includes electric and diesel counterbalance forklifts up to 25 tonne capacity, warehouse trucks and special trucks for specific applications. It also manufacture attachments of its own design to address a wide range of handling needs besides offering attachments made by international specialists when the application demands. The company represent global players like Crown Equipment and Hubtex among others, in India.

Informing about technologies that will drive the material handling equipment market Gupta shares, “Robust product, reliable technology and brand orientation is the preference of a MHE customer, however customer expect brand to take care of technology. Currently customer is looking for customised, reliable and cost effective material handling solutions as per their business requirement rather than MHE equipment only. Market witnessed a shift towards more reliable and high performing machines since last 2 years and trend is likely to be continued.”
KION Group is represented in India by its various brands – OM, OM Voltas, Linde, STILL, Baoli and Dematic. “We are one stop solutions for all the customer segments for their MHE requirements through our extensive product range and diversified solutions covering economical technological solutions to high end fully automated solutions,” he says.
KION Group's R&D team at Pune is continuously working towards evolving its products and bringing future ready products; to provide value for money to its customers. “We are the first company to produce cleaner technology based reach truck in India. We recently launched an environment friendly Electric forklift with advanced twin motor drive technology providing very small turning radius,” claims Gupta.

“Telematics is the technology of the future that will drive the MHE market going forward,” states Bhatia. He adds, “For the uninitiated, telematics are high technology solutions that seek to improve all aspects of fleet management – machine productivity, total cost of operations and operator performance – by way of wireless asset management. For example, the range of ReachStackers offered by our technology partner, Hyster Yale Group (HYG), incorporates to a high degree telematic solutions and fleet data analytics. There is also the added flexibility of retrofitting the telematics application into older models and allied equipment from other manufacturers. Key features include – remote management of key performance indicators of the equipment, impact sensing, tracking regular preventive maintenance schedules, tracking and reporting aggregate costs, GPS tracking, access control, automatic shutdown, operator pre-shift checklist, etc.”

“Geared Motor is a heart of any engineering company and industry as wherever any movement is required gear boxes/geared motor are required. We, Radicon Powerbuild, have been pioneer and preferred supplier of geared motor in material handling equipments. We have the product like A-series (super series) which comes with grease filled for life time,” briefs Haridoss.

How would these technologies assist smooth warehousing and logistic operations in meeting customers demand?
Ground storage and manual material handling is still common in the country with high share of small warehouses and logistics providers. However, trend is now shifting towards advance and reliable ways of material handling to improve the productivity and reduce losses. With roll out of GST, consolidation of smaller warehouses build for tax efficiency will convert into fewer but large capacity warehouses to improve the operations efficiency.
“With the increase in industrial growth, rise in demand of consumer goods and services augmented by increase in disposable income and focus on efficiency and safety, market is shifting towards automated products and solutions in coming years,” highlights Gupta.

He adds, “Practically after a certain volume; manual material handling is beyond human control and requires advance and automated solutions. As much we move towards large capacity warehouses, an automated and smart warehouse becomes vital for efficient operations. With the environment awareness as well as compliances and government push towards green and clean energy, future smart warehouses are likely to be based on non-pollutant energy efficient material handling equipment. Battery operated electric forklifts and warehousing equipment will be base of automated/smart warehouses and pull the demand of battery operated material handling equipment.”
“As market leaders we strive to offer the right solution to each customer to meet their needs. Since we have a wide range from our own manufactured products and those of our foreign partners, we can address a wide range of user needs. MHE is used in virtually all industries that make or distribute any physical product with some scale of operations. So while we supply our products to maybe two dozen industry sectors, we focus mainly on logistics and distribution, retail, chemicals, automobiles, heavy and light engineering,” briefs Lingayat.

As per Haridoss the following technologies assist smooth warehousing and logistic operations in meeting customers demand;
• Elecons decentralised drive solution
• Light weight and compact product
• Grease filled
• For various space available offer solution in Helical, Heli-bevel and parallel shaft and Planetary geared motor.
• Radicon Powerbuild has got a wide range of product and have the product to cater to the industry.

Highlight 5 major challenges faced by material handling industry
The major issues and challenges faced by MHE players is related to the low level of demand and volume as compared to major foreign markets outside India such as China, USA, Japan and Europe. Due to these reasons, Indian manufactures face a cost disadvantage because of economies of scale as compared to foreign manufacturer's from other countries,” informs Lingayat.

In addition he says, “The availability of components from ancillaries and other suppliers is at a much lower level in our country as compared to the others. We also have a lot of administrative and infrastructural bottlenecks related to power cost, delays in transportation, delay in import and export clearances, administrative problems, high taxation limits, and high interest rates and so on. These make the equipment manufactured in India cost uncompetitive with machines imported from low cost countries. These issues have already been addressed to the relevant government agencies. We are hopeful that these will be sorted. The government's emphasis on ‘Make in India' campaign has brought a boost to the manufacturing sector thus increasing the demand of MHE considerably.”
“The major business challenge is to remain cost competitive while offering improve technology solutions to the customers in the dynamic business environment. Customisation of cost competitive technology as per requirement of Indian customer is most important aspect to remain competitive in the market in long term,” says Gupta.

He points out other major challenge faced by the MHE industry is on the low market volumes causing low attractiveness for our vendors, channel and towards technology investments as a whole. As compared to any developing economy, Indian market for material handling is a very small market considering our sizeable population.
With the high pace of growth business become more dynamic and less predictable. Hence, organisation needs to be more agile without any cost inflation.

“Price competitiveness due to presence of various local and international players as well as material management for shorter delivery period of machines is few more challenges which are faced by the organisation currently,” he observes.

Gupta reveals, “We are a customer centric organisation and our R&D team at Pune is continuously working towards evolving our products and bringing future ready products; to provide value for money to our customers. Our vast sale and after sales network with more than 100 touch points take care of our customers day to day maintenance of our equipment.”

The challenge of lower volume could be overcome only by driving the concept of “Efficient way of material handling” through palletisation and contain ration change approaches in the market.

Bhatia shares major challenges likely to be faced by the material handling industry include
• Ensuring higher productivity and customer profitability: The primary challenge for equipment makers will be to deliver quality machines at affordable price.
• Managing equipment downtime by way of smooth availability of spares (especially those of higher capacity equipment, which is expected to rise in the days to come) and faster and efficient service.
• Matching supply with demand: As and when demand witnesses a sudden upsurge, keeping in step with it through timely delivery will be a test.
• Availability of trained operators: Their demand is likely to increase in step with that of equipment.
• Sustained availability of long term capital.

“With a comprehensive portfolio of products and services, two state-of-the-art factories in Eastern India, excellent ties with overseas collaborators with a good pipeline of new products, and a pan-India network of offices and service personnel, TIL is more than prepared to address the challenges and capitalise on emerging opportunities,” comments Bhatia.

Automation and competition in material handling systems has slowly been queering the pitch and the operational needs of the industry in India. How are you ready to face these changes in the near future?
Lack of availability of labour for menial jobs and rising cost of labour and space are increasing the demand for automation process in material handling business as well like other industries.

The challenge faced by most organisations in today's competitive environment calls for optimisation and re-engineering of their entire operations, including operational efficiency and cost optimisation. Improving efficiency, enhancing agility and flexibility of “internal logistics” have assumed paramount importance. Throughput or the speed with which one can meet customers' orders has become one of the most important differentiators.
Lingayat says, “Since we understand the requirements of our customers hence we are already providing Automated Warehousing Solutions. This range of solutions is commonly called Automated Storage and Retrieval Systems and this includes Fixed Path Material Handling Equipment. We design, fabricate, install and commission various types of “Fixed Path” Material Handling Equipment such as: Automated Stackers, Very Narrow Aisle (VNA) High Bay Order Picking Cranes, Automated Guided Vehicles (AGVs), AGV Stackers and Miniload Systems, etc.”
He adds, “After that we “integrate” them with a High Bay Storage System and comprehensive Warehouse Management Software (WMS).”

Gupta says, “Being a market leader, we always set new benchmark for ourselves and for the industry. We keep challenging ourselves for better products and service offering to our customer. We have solutions for each and every customer segment.” He adds, “Our OM Voltas and OM has catered to the economy and lower value segment of Indian material handling market and has been the dominant player through the years. Linde, STILL and Baoli are prominent import brands. Linde and STILL brands are well established in the higher value segment and premium segment respectively while Baoli is a key player of lower economy segment of Indian MHE industry. We are offering automated ware house systems and solutions through our brand Dematic. We are continuously investing to improve our product features and upbringing new technologies, empowering sales and service network to satisfy customer needs. We are looking forward to ramp up automation technology in India. KION India is fully geared up to become preferred material handling solutions provider for Indian customers.”

For Bhatia, as far as automation is concerned, the products that TIL offers, in alliance with global technology leaders, are sufficiently geared to incorporate all emerging trends. TIL always stays a step ahead of competition by equipping all machines with the most advanced components to ensure maximum equipment uptime, optimum productivity and state-of-the-art safety features. TIL machines offer options for telemetry and onboard machine diagnostics. “TIL is the major in high capacity cranes and reach stackers. As the market preference shifts more in favor of heavier machines, we are confident of staying at the top by dint of the expertise that we have developed over so many decades,” says Gupta.

“We, Radicon Powerbuild always stayed ahead with the competitors in adapting new technologies. Company is investing in research and development to make new product meeting the demand of automation in MHE. Radicon Powerbuild has product which can communicate and interface with the high end electronics and automation products,” says Haridoss.

In what ways do you think that material handling equipment industry will take giant leaps ahead?
In India, as in most other countries, the growth of the MHE industry is tied to that of the manufacturing and logistics growth.

There is a strong correlation between manufacturing GDP growth and MHE sales. Besides, MHE is also linked to the distribution and logistics chain. The government's ‘Make in India' campaign is expected to spur local manufacturing thereby leading to setting-up of new facilities which will require forklifts to support operations. Also, the huge growth being witnessed in the warehousing sector especially to support the booming e-commerce segment will be another key driver for growth in material handling industry. “Accordingly to current statistics our manufacturing sector has grown 8.1 per cent in the third quarter of 2017-18, from 6.9 per cent in the previous quarter and 8.1 per cent in the same quarter of the previous year. India's factory output grew at a robust pace for the third straight month at 7.5 per cent in January. This is expected to have positive impact on material handling industry,” comments Lingayat.

“Currently India has approximately 8 MH sales/million inhabitants compared with 52 of other Asian countries. China has around approximately 172 while Europe and the US are at more than 500. Which directly reflect the business potential in India,” points out Gupta.Business in India continuously working towards innovations, development or improvement of cost competitive products or processes or services and looking towards business model which has a high potential of employment generation and wealth creation.

He adds, “The Indian market is also developing and moving towards Industry 4.0 and automation has to be adopted in coming years. In Indian MHE segment a fully automated, software controlled warehouse is the future milestone.”
“The increased containerisation of domestic cargo, along with the development of Dedicated Freight Corridors (DFCs) and Multi-Modal Logistics Parks (MMLPs) will increase the demand for material handling equipment in a big way. Simultaneously, productive asset utilisation will also go up. The challenge will be to cater to this increased demand with the right assortment of products and superior customer service to ensure the maximum equipment uptime – and both of these are core strengths of TIL,” says Bhatia.

Radicon-Powerbuild is going to play an important role in this changing scenario. With its latest generation geared motors and gearboxes, PBL will drive the wheels of this revolution. Its Helical, Bevel and Worm geared motors will power the movement of stacker reclaimers in Mines and ports; will raise the heaviest loads in cranes; will roll out delicate packages from food processing machines. PBL's high efficiency compact planetary range will show uncompromising resolve to stop waste of energy. “As a whole, Radicon-Powerbuild is all geared to embrace the challenges of the growing market. With its elaborate and modern manufacturing facility right on Indian soil, in Vallabh Vidyanagar, PBL is in a position to offer the most needed solution to the market, powered by its experience of almost a century,” informs Haridoss.

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