We could soon be looking at the sales up to the 2019 levels, or even beyond this year

- DIMITROV KRISHNAN

President, ICEMA

How do you visualize the revival of Indian construction equipment industry in the past two years?

The construction equipment (CE) industry, which was adversely impacted due to COVID-19 pandemic, along with various other factors, has been on the road to recovery in the last two years and is showing encouraging signs in the current financial year. In fact, we could soon be looking at the sales up to the 2019 levels, or even beyond this year.

Looking at the figures for the last two years, as compared to the FY20 levels, there was a composite 10% year-on-year growth in sales of the CE industry in FY21. This was remarkable given the 7.3% contraction observed in the economy during the same period. High resilience was shown by most of the equipment segments, particularly, by the earthmoving equipment segment which contributes nearly 75-80% of the total equipment sales in India. In FY22, while there was a drop of 8% in overall sales, the actual overall numbers were slightly higher than the FY20 levels, largely as a result of increased exports and the positive performance of material handling and concrete equipment.

However, one of the challenges which remained for the CE sector during FY22 was the slowdown in construction of roads and highways (from 36.5 km/day in FY21 to 28.64 km/day in FY22) which accounts for nearly 40% of construction demand. This has adversely impacted the demand for construction equipment.

Going forward, the forecast for CE industry is positive, especially in view of the improved YoY results of Q1 and Q2 of FY22-23. With over 35% increase in budget outlay on capital expenditure for FY23, the industry sentiments have received a boost on the back of enhanced export prospects as well as continued governmental thrust on infrastructure development.

What are the new technology trends in Indian CE market?

The Indian CE industry is headed for exciting times, with influx of technological advancements such as digital technologies, Internet of Things (IoT) and CEVs with alternate fuels which will catapult the industry into a new era of sustainable growth. Some other new technology trends for the Indian CE market include telematics, advanced electronic controls and additional safety features for CEVs on par with global standards. 

How do you experience the current demand trend of construction equipment?

The demand for construction equipment is on the uptrend in the current financial year. The overall sales in the first eight months i.e., April-November 2022, have shown an increase of more than 25% over the same period of 2021. Except for road construction equipment, there has been a significant increase in sales across all other equipment segments. While sales of earthmoving equipment such as backhoe loaders, excavators, motor graders, etc. witnessed about 23% growth during this period, material handling equipment like pick-and-carry crane sales and concrete equipment sales including concrete mixers, batching plants, boom pumps, etc. have gone up by 40% and 28%, respectively.

This high growth recorded by all equipment segments shows an increasing demand for these machines which are primarily used for infrastructure and mining projects. We expect this trend to continue this year with construction activity gaining momentum during the last quarter of the current fiscal.

What is your view and expectations of bauma CONEXPO INDIA 2023?

We are eagerly looking forward to our participation in bauma CONEXPO INDIA 2023. The event has been playing a pivotal role in the inculcation of new state-of-the-art construction technologies and will witness the latest machines and new product variants being manufactured by Indian and international companies. This will provide an ideal opportunity for the industry to exchange technical knowledge and the best practices with their counterparts. Exposure to the vast product offerings from the Indian CE industry will encourage higher mechanization levels in the Indian construction equipment industry and will also help develop a robust manufacturing ecosystem in the country. This initiative will strengthen India's position as a major potential exporter of construction equipment to global markets.

What is your outlook on the CE market in 2023? How are you gearing up for the year ahead?  

The CE industry's outlook for 2023 is positive. There has been an upward trend in demand observed during 2022 which is likely to be continued during this year as well with many of the planned infrastructure projects expected to be implemented in 2023. A few such projects have already been launched in recent months. These include eight National Highway (NH) projects of Rs 3,000 crore in Andhra Pradesh, three NH projects worth Rs 1,206 crore in West Bengal, 75 infrastructure projects worth Rs 2,180 crore in Ladakh, the six-lane Greenfield Raipur-Visakhapatnam Economic Corridor with a cost of more than Rs 3,750 crore, various road projects in Telangana worth over Rs 2,200 crore, eight NH projects worth Rs 4,054 crore in MP, the country's first multi-modal logistics park (MMLP) in Chennai and a number of upgradation and improvement projects with similarly huge outlays.

Besides these projects, the execution of several other projects planned under the National Infrastructure Pipeline over the next 2-3 years will help in boosting the demand for construction equipment in the country in the short to medium term.

The industry is gearing up to ride the expected growth wave on the crest of cutting-edge technological developments, with CEVs powered by IoT, digitization and alternate fuels, which will also make future products more viable by promoting sustainability. Moreover, complete adoption of the new CEV-IV emission standards by the industry has made it possible for Indian CE manufacturers to access export markets in developed nations.

And so, in a nutshell, we feel that as India steps into an era of infrastructure-led growth from a position of strength supported by the Government's vision of an 'Atmanirbhar Bharat' and strong exports push on the back of 'Make in India for the World', the outlook of CE industry is positive.

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