Over the next two years, firstly, I plan to execute the Vision Plan 2030.

    Dimitrov Krishnan President - iCEMA & Managing Director - Volvo CE India       As president of ICEMA, what are your top 3 to 5 priorities for the industry and the association? Firstly, I am very happy to take over as ICEMA president at this crucial stage of Indian CE Industry that

Over the next two years, firstly, I plan to execute the Vision Plan 2030.
image-1

Dimitrov Krishnan

President - iCEMA & Managing Director - Volvo CE India

As president of ICEMA, what are your top 3 to 5 priorities for the industry and the association?

Firstly, I am very happy to take over as ICEMA president at this crucial stage of Indian CE Industry that is poised for dramatic growth over the next 10 years supported by the high speed of infrastructure growth planned by Government of India.

Over the next two years, firstly, I plan to execute the Vision Plan 2030 that we articulated and released during the year 2020.

The vision plan focuses on the following 3 pillars with 8 priority areas:

Pillar 1

  • Sustained demand creation
  • Improve Government industry collaboration by forming joint taskforce
  • Undertake targeted efforts to propel exports to 15-20% of CE production
  • Develop alternate / additional demand channels to improve stability of top-line

Pillar 2

  • Robust operating ecosystem.
  • Drive indigenization and reduce imported components.
  • Support creation of an organized rental market.
  • Improve access to funds for construction and to purchase CE.

Pillar 3

  • Stable foundation - technology & skilling.
  • Enable indigenous technology development capability.
  • Develop a pool of skilled workforce for industry.

In the near term, I plan to drive the following to achieve the Vision Plan:

  • Setting up the government industry task force to drive demand growth.
  • Accelerating the build-up of an ecosystem for technology indigenization.
  • Setting up of a CEMM Testing Centre.

I believe that these three areas within the vision plan will help us to lay a strong foundation for the CE industry's future growth.

The other two areas of importance for me will be building a stronger ICEMA secretariat, with a view to ensuring smooth execution of the Vision Plan 2030.

We will also aim to broad base ICEMA's working by encouraging increased involvement of members as well as other stakeholders.

What are the critical constraints/challenges that the industry is facing, or may expect to face in near future?

The industry's growth potential is being limited by some key challenges that need early redressal. These include iincreasing input prices, especially the spiraling steel prices and supply chain disruptions experienced during the pandemic. Uncertainty in the applicable norms, such as emission norms for Off -Highway equipment, have been a major cause for concern for the industry.

There has have been several instances of projects getting stalled midway due to various reasons leading to demand flow disruptions. This places significant pressure on the CE industry's financial health, specially of the contractors, further impacting demand. We have also been engaging with the government on improving access to finance, especially for the MSMEs.

Though the Indian CE industry is highly indigenized, import substitution remains a challenge because of limited demand within the country. Therefore, sustained demand creation is of key significance to the sector and will be a challenge that we intend to address in the near to medium term. We will focus on attracting investment from component suppliers into India in the areas of hydraulics, electronic, undercarriage components and other precision parts.

Given the challenging biz environment, how is the CE Industry and ICEMA gearing up to drive the Vision Plan 2030?

Though the business environment is challenging, the window of opportunity to leverage the industry potential is huge. Both ICEMA and the CE Industry members are making concerted efforts to make the best of this opportunity.  The industry efforts are being driven towards the following:

  • Identifying new demand drivers and strengthening existing ones.
  • Ensuring balanced focus on states and center to enhance demand.
  • Developing technologies to integrate next level of emissions norms to align to international norms. This would help expand export markets and also make the sector more environment friendly.
  • Developing new technologies with a view to enhancing local components.
  • CE industry members are taking the lead in skill development along with ICEMA and ISCE.

ICEMA

The ICEMA secretariat is working closely with the new panels to develop channels of communication with key stakeholders such as the government, international and domestic associations, academia, and research organizations amongst others. Focused efforts will be driven towards building the Indian CE industry's brand on the global front by stepping up international engagements.

This year, we have reconstituted the organization with 7 new panels or committees that will guide the ICEMA secretariat in implementing the common vision of the industry. Comprised of senior officials of member companies, these panels will bring together the industry on a common platform, build consensus and engage with stakeholders to achieve the goal of making India's CE industry a USD 25 billion industry.

What are the opportunities you see for the CE industry to help India achieve its USD 5 trillion ambition?

Construction and infrastructure development are core sectors with potential to spur economic growth of a nation. Indian Construction Equipment (CE) industry can be a vital fulcrum in driving infrastructure growth and supporting allied industries in achieving their growth targets, thereby driving economic growth.  Infrastructure development is a key driver and CE industry, with more intensive equipment deployment, could speed up the progress as well as drive downstream sector growth arising out of urbanization needs.

A large percentage of the India CE industry players in India are MSMEs, which also form the foundation of India's manufacturing economy. We are working on developing an industrial ecosystem that will support industrial and economic growth, driving the nation towards AtmaNirbharta and the USD 5 trillion ambition.

The CE industry's Vision Plan 2030, with its 8 point agenda, is focused on strengthening its sector's ability to contribute to building the nation by tripling its volume and becoming a USD 25 billion industry. 

Infrastructure also has a strong multiplier effect on job creation. The multiplier effect is especially strong in India - an increase in spending of 1% of GDP on infrastructure is estimated to lead to a 2% growth in GDP and the creation of 1.3 million jobs, as per a study by S&P Global. The CE industry being closely linked to infrastructure growth, projects potential direct and indirect employment of 6 million by 2030.

In this scenario, how do you assess the growth prospects of the CE industry, in terms of finance and investments?

The CE Industry is poised for good growth over the coming 10 years and we are quite confident that the industry will deliver this growth due to increased pace of Infrastructure building and also India becoming an attractive destination for export of CE products, components and technology development.

All the global CE industry players are well invested in the country and have built up capacities that can be quickly scaled up. The supplier ecosystem is robust and many new component suppliers are making India their home by investing in capacity building for indigenous supply - a clear example being excavator undercarriage parts where investment has happened despite Covid impact.

What are your expectations from the government in terms of investment, policy changes for Construction Equipment industry? 

The CE industry offers significant potential for import substitution. A ‘Production Linked Incentive Scheme' has also been proposed to enable India's CE Industry to become a manufacturing and export hub for CE and enable self-reliance through development of a robust domestic supply chain. ICEMA has appointed Deloitte to develop a PLI proposal in consultation with supply chain partners and ICEMA Members. We are quite hopeful that the government will favourably consider extending this scheme to the CE industry players.

We look forward to the government accepting our roadmap for future technology introduction in line with the country's goals of sustainable development.

Developing mother technologies will play a critical role in making India's CE industry self-reliant. We are engaging with the government to work on an enabling environment to attract investments in mother technologies for industry growth. We have shared a list of projects that the Government could consider. We also hope that OEMs including global technology companies will be incentivized in their projects aimed at development of these technologies in India.

The Government's National Infrastructure Plan augurs well for the CE industry in India. We are looking forward to a system for monitoring the NIP to ensure demand sustenance and address financial challenges.

Hits: 119