“India will remain a very important sourcing hub for construction equipment”

Hemant Mathur,
senior GM-sales and marketing,
Tata Hitachi.

In a chat with Prabodh Menonof CT, Hemant Mathur, senior GM-sales and marketing, Tata Hitachi, elaborates on a wide range of topics with respect to the CE industry.

What is the outlook for the industry in the nearfuture, given the context of the upcoming general elections?

Historically, run up to the elections has had an impact on the construction equipment industry,when priorities of the government shift from capital investment to revenue expenditure. We doexpect the same in the run-up to the oncoming elections. As of now, demand is strong giventhe activity on ground and continued investment in the infrastructure sector by the government. Growth continues to be driven by roads, rural housing, etc.

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

Short term liquidity crisis has hit non-banking financial companies (NBFC) funding which is the mainstay of the industry as morethan 80% of the equipment are funded by NBFCs. They have turned very cautious; there aresome issues in timely payments. However, things seem to be settling down now.There are regulatory changes to emission norms coming up in 2020 and in 2021 and the industry isgearing up to the challenge of meeting these. Keeping the cost increase under control is a bigchallenge. Run-up to the elections has some impact of demand and the industry is closely watchingthis area. Third, skill shortage continues to be an issue with us. Many initiatives, some by the governmentalone, and some in partnership with the industry, have been started to up-skill our resources inrunning, operating, and also manufacturing our equipment.

What is the key policy-related hurdles?

There are two major policy related issues right now - the regulatory emission norms for trackedequipment that is expected to come in 2021 and the status of the CEMM Act. We are takingboth these issues through our industry association ICEMA so that there is certainty andadequate transition time to meet marketand statutory needs.

Citing examples, please explain how the new generation equipment is becoming more user-friendly, safe and sustainable?

Clearly, improvement is a continuous process and we at Tata Hitachi give utmost importance tothis as ultimately this adds value to customer in terms of lower lifecycle costs with respect to cost ofoperations and maintenance.Machine health monitoring systems are becoming common and increasingly sophisticated. Thishelps with enhancing overall equipment efficiency and productivity, and closer supervision,which in turn leads to training, systems, and maintenance procedures becoming increasinglycustomised for the site where the equipment is working. In this area, ease of use is also animportant issue as it affects the productivity of the operator.

We have done severalimprovements in terms of aesthetics and ergonomics of the operator cab, introduction of airconditioning, vibration isolation mounts, automatic idling, centralized lubrication system, betterdial gauges, easier to access filters, etc.

As far as safety is concerned, continuous training at site in terms of safe operation is animportant initiative that we at Tata Hitachi have followed for a long time.Various audio alarms on the machine, guard rails for mounting the excavators, anti-slip surfaces, etc., add to the safety of the personnel involved with the machine.Further, machines are also available with roll-over protective structures (ROPS) and falling object protective structures (FOPS) cabins as options to enhance the safetyof the operator.Large-class machines also, are available with automatic fire suppression system to enhance thesafety of both operator as well as the machine.

In the journey towards a lower lifecycle cost of operation, several stepshave been undertaken to make the operation of equipment sustainable, be it increased fuelefficiency, long life of pins and bushes, long drain oils, or using recyclable material, etc.Also, continuous development of new attachments for our machines is making our equipmentmore versatile and productive. There are many such solutions created now around drilling andpiling, rock breaking and crushing, demolition, amphibious operations, etc.

How is India a low-cost manufacturing base for your company? Do you think, theera of India being a less expensive manufacturing hub is over and other economies such asVietnam, are taking over?

The Indian construction equipment manufacturing has matured over a period. The intensecompetition among the players, has become very evident in both manufacturing and costsaided by various government initiatives. We are one of the most competitive markets acrossindustries and markets in the world. This has enabled most manufacturers to enhance theirmanufacturing prowess to not only be able to cater to domestic customer requirement but also export markets.

Manufacturers had realised it very early and most of us export to variouscountries across the world. Given the flexibility, the industry can deliver a range of equipmentcomplying to various requirements of global customers which very few countries can offer.Similarly, we have a distinct advantage of learning from the domestic market where ourmachines are customised to meet tough and extreme operating conditions so that our equipmentcan operate in any part of the world. Given this background and the competitiveness, India willremain a very important sourcing hub for construction equipment for various regions given itslocational advantages. Because of all this, we, at Tata Hitachi, export to our neighboring countries in SAARC region as well as through Hitachi'snetwork in Middle East, Europe and Africa.

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