INDIAN CE INDUSTRY GAINING MOMENTUM

As Indian infrastructure development is back on revival path, the construction equipment industry in India is expected to gain momentum and EXCON is going to raise the optimism among CE players.

Efficient project execution has become imperative today in construction and infrastructure projects. Recently, Roads & Highways Minister Nitin Gadkari revealed government's plans to speed up highway construction to 50 km per day in 2022-23. Similarly, the speed and quality of project execution is also reviving in other infrastructure development activities also. This has pushed the developers and contractors towards acquisition and implementation of advanced technologies and solutions to make their project execution smooth, efficient and economical.

Infra market scenario

India is aimed at becoming a $5 trillion economy by 2025 and infrastructure development is key to achieving this goal. In line with this, the Prime Minister has envisioned and introduced a slew of schemes that will put India's infrastructure development of fast track resulting in further growth of the country in the long run. The mega missions such as Gati Shakti, National Infrastructure Pipeline, Bharatmala and Sagarmala, coupled with the other sector-specific development schemes will jointly drive the infrastructure growth.

PM Gati Shakti Master Plan: According to the Central Government, PM Gati Shakti will incorporate the infrastructure schemes of various Ministries and State Governments like Bharatmala, Sagarmala, inland waterways, dry/land ports, UDAN etc. Economic Zones like textile clusters, pharmaceutical clusters, defence corridors, electronic parks, industrial corridors, fishing clusters, agri zones will be covered to improve connectivity and make Indian businesses more competitive. The PM Gati Shakti plan will give a new direction to the development of modern infrastructure through planning, implementation and monitoring, besides cutting down on time and cost overruns of projects, according to the Prime Minister. The seven engines of roads, railroads, airports, ports, public transportation, waterways and  logistics infrastructure will power the PM Gati Shakti Master Plan.  

National Infrastructure Pipeline: The National Infrastructure Pipeline (NIP) for FY 2019-25 is a first-of-its-kind, whole-of-government exercise to provide world-class infrastructure to citizens and improving their quality of life. It aims to improve project preparation and attract investments into infrastructure.

The NIP has been made on a best effort basis by aggregating the information provided by various stakeholders including line ministries, departments, state governments and private sector across infrastructure sub-sectors, as identified in the Harmonised Master List of Infrastructure.

Lack of robust infrastructure is often recognised as the primary growth constraint for a developing nation. In India, the government is increasingly, looking to the private sector for forging partnerships via effective models for co-working between public and private sectors. The NIP is a step in that direction.

Bharatmala Priyojana: The Ministry of Road Transport and Highways (MoRTH) envisaged an ambitious highway development program Bharatmala Pariyojana (BMP) which includes the development of about 65,000 km of national highways in two phases. Under Phase-I of BMP, the Ministry has approved the implementation of 34,800 km of national highways in five years with an outlay of Rs 5,35,000 crore. The Phase-1 however has been delayed due to various reasons and now is targeted for completion in 2027, meanwhile, the Phase 2 is already announced and the process has started. 

Sagarmala: Approximately 95% of India's merchandise trade (by volume) passes through sea ports. Many ports in India are evolving into specialized centres of economic activities and services and are vital to sustain future economic growth of the country. However, Indian ports still have to address infrastructural and operational challenges before they graduate to the next level. The concept of Sagarmala was approved by the Union Cabinet on 25th March 2015. As part of the programme, a National Perspective Plan (NPP) for the comprehensive development of India's 7,500 km coastline, 14,500 km of potentially navigable waterways and maritime sector has been prepared which was released by the Prime Minister on 14th April 2016 at the Maritime India Summit 2016. The concept of 'port led development' is central to the Sagarmala vision.

Revival in mining

Mining sector in India has evolved over the years with the help of government policy push towards private participation. Traditionally dominated by public sector players, the mining sector has seen entry of private players in the recent past. Also, the government's policy revival allowing 100 per cent FDI in commercial coal mining has pushed the foreign players entering Indian mining sector.

CE opportunities

The Indian construction equipment (CE) market has evolved over the years to become one of the top markets globally. The ongoing infrastructure development and the government's various plans mentioned above are driving the demand for construction equipment in India in a big way. With the evolving technology and the presence of global players in India has expanded the reach to export markets around the world. 

On the emerging opportunities, Deepak Shetty, CEO & MD, JCB India says, “Currently, India is the third-largest CE market after China and USA, and we are on our way to becoming the second-largest in the world by 2030. This is an ambitious plan, and we are working towards it.”

The mega infrastructure plans such as Bharatmala, Sagar Mala, NIP and PM Gati Shakti have put the infrastructure development on fast track and the use of advanced construction equipment has grown significantly over the years. Revival in mining has also pushed the used of higher capacity advanced equipment and technologies in mining projects. Arvind K Garg, Executive Vice-President and Head, L&T Construction & Mining Machinery, points out, “We believe these initiatives will expand the market for everyone in the sector, including L&T Construction and Mining Machinery, which has always pioneered cutting-edge technologies revolutionising the industry over the years.”

Alok Jha, Director - Sales & Marketing, India & SAARC - CASE Construction Equipment, adds, “There is renewed confidence in the industry due to the government's ambitious target to make India a manufacturing hub of construction equipment globally. There is a huge business opportunity for the construction industry, as it is embarking on major infrastructure development projects in roads & flyovers, industrial infrastructure, and power.”

The rural infrastructure development and water infrastructure are also on fast track which require construction equipment in large numbers. Rahul Shorey, National Head - Construction, Tata Hitachi, elaborates, “A 35 per cent increase in Capex was announced for this fiscal with water supply, railways, PMGSY and Swachh Bharat Mission seeing significant increase in allocation. Other key infrastructure activities like highway construction and urban infrastructure have seen marginal growth in budgetary allocations. What will become important for the growth of the CE industry is the execution of all the projects announced. With the general elections nearing in early 2024, we do expect that execution will increase, driving CE growth this year and the next.”

There was a dip in demand for construction equipment in the past two years due to the Covid. However, the demand has bounced back again after infrastructure projects gaining momentum. Sanjeev Bajaj, Chief Executive, Escorts Construction Equipment, explains the trend, “We see there is a spurt of demand post-Covid due to restarting of construction activities and fast movement on the infra projects. On project-based demand side, we believe there are positive signals. Retail demand is still catching up and may take some time. Input costs for manufacturers as well as customers have gone up and thus having a dampening effect, though may get corrected as the demand picks up further.”

CE procurement

With the number and size of infrastructure projects growing, it is imperative that the construction equipment and materials are available as per the need and at the right time. Also the parts and aftersales service need to be readily available to save time as contractors are under the pressure of tight execution deadlines. In order to save time and money, it is advisable to have Made in India equipment. However, today many speciality equipment required for bigger projects are still being imported. Ranjit Manjarekar, Vice President - Asset Management, Tata Projects, explains the scenario, “Long ago, I had anticipated Indian construction market demand for equipment in certain categories such as TBMs, piling rigs, big cap cranes, etc. However, even after years, many of those categories of equipment have not started manufacturing in India. We still have to import these equipment which cost us more time and money. OEMs should have realised by now India's potential of domestic consumption and logistically well-connected global market so they should participate in Make in India and Make for the World vision of Indian Government. Once we have such niche category equipment being manufactured in India, cost of these equipment will come down and delivery time shall reduce.”

EXCON: beating the challenges

Excon 2021 is going to be the first major exhibition for the construction equipment industry, post-pandemic, hence, expectations are high. The theme of EXCON 2021 is Building India for a New World - Competitiveness, Growth, Sustainability and Technology. According to Deepak Shetty who is also the Chairman, EXCON is of the view, “There is likely to be an even greater active participation by the industry than what we have seen in the past editions.” He provides an overview of the exhibition: “We are expecting 1,000+ exhibitors from India and abroad, including from countries like the USA, UK, France, Germany, Italy, UAE, South Korea, Singapore, and Sri Lanka. The 5-day exhibition is likely to attract over 50,000 business visitors from all over the world, who will come to view first-hand the latest construction equipment and components, and the world-class technologies that enable speedy implementation of infrastructure projects.”

EXCON this year will have a significant focus on new technologies that are making their way into the industry. Machines today are IoT enabled and give real time information on critical parameters.

EXCON will also be showcasing the growth and the penetration of digital technology, in not only construction equipment, but also in the way the entire infrastructure ecosystem is developing in India.

The event will also highlight the competitiveness and growth of India's CE industry over the years. India is poised to become the second largest market for construction equipment.

Another important focus at EXCON will be on Sustainability. “At CII, we believe that the country's progress and growth must be done in a sustainable manner. At the event, experts will discuss sustainable solutions that the CE industry has to offer and what sustainable measures are being taken across the infra ecosystem.”

Exhibitors upbeat

The EXCON is elevating the mood of the industry. The event is happening after the industry recovering from the Covid pandemic impact. V G Sakthikumar, Managing Director, Schwing Stetter India, says, “Schwing Stetter India has always been an active partner on every edition of EXCON and this edition makes it special as it is the first event happening at the global level, post the devastating pandemic which crippled the entire expo industry. We are eager to showcase our latest range of equipment, enhanced with performance and productivity and to have a direct interaction with our esteemed customer and the prospects arising out of the event.”

R S Raghavan, Managing Director, Proman Infrastructure Services, adds, “EXCON has grown over the last eight editions to be one of the top construction exhibitions in the world. It has been a great platform that connects all the infrastructure stakeholders, including policymakers, investors, and developers. Additionally, EXCON is happening at a highly opportune time when the spotlight is on infrastructure development.”

With the market sentiments are looking positive after the market and economic revival, the days ahead are expected to be brighter for infrastructure market in India. In the post pandemic scenario, the Indian construction equipment market is expected to excel with more advanced technologies and practices in manufacturing to push the scope for Made in India construction equipment for India and the world.

Hits: 0