The government needs to find avenues for long term funding at competitive rates for infra-projects.

- Ramesh Palagiri, Managing Director & CEO, Wirtgen India

What are the key challenges the CE sector is facing post easing out of lockdown in stages?

Going back to pre Covid or 2018 levels, we see some recovery in the past two months, but this recovery is still not adequate. Most of the players in the CE industry have built capacities for more growth and most of them are currently operating at less than 50% capacity - even with the increase what we had in the last couple of months. So the main challenge continues to be the demand not improving to meet the adequate capacities what has been built over a period of time.

What further measures do you expect from the states / central governments?

As far as economy is concerned, infrastructure is one area which will drive growth, create employment and the government is already focused on this. But for us - to have the kind of growth that is required for India to get into the double digit GDP, is to find avenues for long term funding at competitive rates for infrastructure projects. This way there will be a manifold increase in the award and execution of infra projects. Once there are enough infra projects under execution, the demand for construction equipment will increase substantially. The second area what we need reforms or changes is to ensure that funding is available for purchase or lease of construction equipment. NBFC's were primarily funding the CE equipment and in the last couple of years the NBFC's are in a financial crisis. The banks have stepped in - to some extent to meet this gap, but in spite of this funding for construction equipment still remains a challenge. And also to make leasing more friendly would also help.

Post gradual opening-up, how do you see the impact on the investment scenario in infra projects?

Today, a substantial portion of investment on infraprojects is from the government side of its budget with few project being executed under the Hybrid Annuity Model (HAM). Banks are reluctant to fund infraprojects hence the government has to find solutions to get long term funding for infraprojects at competitive interest rates.

Post pandemic era how do you envision the transformation of manufacturing processes, marketing etc.?

The supply chain has more or less stabilised post Covid, and we don't see many challenges going forward as long as this demand is sustained. However, we will continue to look for options and have alternatives for the supply chain.

With regards to disruptive technologies, this is something what the OEM's including Wirtgen Group have been working even prior to Covid. Disruptive technologies which help our customer to complete the job faster, to complete road projects at a lower cost and to increase the life of the roads which are being laid.  These are innovations on which the Wirtgen Group has been working for the last fifty years and we would continue to work on this.

What is the current scenario in terms of R&D and skill upgradation in CE sector?

During the last 6-8 months when we were affected by the pandemic, the one area on which investments continued was on R & D and that's what helps the Wirtgen Group to be the innovation leader and to keep introducing disruptive technologies.

With more sophisticated machines coming into the market , skill upgradation is very key and all manufacturers including Wirtgen Group have been working very closely with our customers in training their operators, imparting application knowledge to them so that we get better roads. We are also running operator schools at our premises which help youth to get employment and also for our customers to get trained manpower to operate and maintain their machines.

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