If the conclusions arrived at the conference on infrastructure projects in India is any indication, the construction equipment industry in the country is expected to grow at a faster rate to become a $15 billion market in the next decade. The conference, which was organised by the Indian Earthmoving and Construction Industry Association Limited (IECIAL), focused on the growth and business opportunities in the sector. IECIAL is affiliated to the Confederation of Indian Industry (CII).
“There is a sense of urgency today in the usage of construction equipment. Our industry today stands at $4 billion and is poised to grow to $15 billion, in the next decade. When we say that our gross domestic product has an uncanny resemblance to China, it only means that this is a time of great opportunity for component manufactures in the country. Indian construction equipment market is expected to repeat the growth story of the country’s auto component industry and become a hunting ground for the global construction equipment industry. India can very well be a sourcing ground for hydraulics and earthmoving equipments,” said, Ranaveer Sinha, Chairman, IECIAL.
However, the journey is not going to be easy for the construction equipment industry. India has to develop regulations for conducting ethical business practices and at the same time the government has to put restrictions on the import of second-hand equipment. “The other challenge is of skilled manpower. We also have to develop ways to counter the environment bogey, which acts as a stumbling block,” added Sinha.
Steve Filipov, President – developing market and strategic accounts, Terex Corporation, seconded Sinha. “We ought to focus on promoting safety, in order to ensure the safety of the workers, as well as for attracting investment. We have to find ways and means to improve the business practices prevailing in the industry, today. Also, we have to ensure that the government sees the need for investment in infrastructure. It is ironic that the US has not seen any infrastructure investment, since 1970s and there are lessons from such international examples to learn,” he maintained.
With the country projected to spend around $1 trillion in the next five year plan on the development of infrastructure in the country, equipment sales in India is expected to gather momentum and exceed five per cent, over the next five years. “China alone accounted for 66% of the global sales of construction equipments in 2010 and its production capacity is projected to surge to 425,000 units, in 2012. If India has to see an equivalent growth rate at par with China, then it will have to focus on long term growth of crawler excavators and wheeler loaders. However, one can be assured that Indian construction equipment sales will exceed 5% over the next five years,” said, David Philips, MD, Off-Highway Research. Off-Highway Research is a credible industry analyst for earthmoving and construction equipment industry.
In order to scale up the sales of equipments, the players also need to improve the overall environment of the industry. “Any customer would prefer to look overseas for components, as they are giving 50% better efficiency. So, it is essential that this industry be foresighted in improving the overall environment of the industry. The onus of training the equipment operators is also on us,” pointed out Kevin Thieneman, chairman, Caterpillar India.