Talking about the Indian material handling equipment sector, Tushar Mehendale Managing Director at ElectroMech Material Handling Systems (India) Pvt. Ltd., says it is at par with the global industry and many Indian manufacturers are associating with international majors on the technological front.
Indian market scenario as compared to global construction equipment market
The major challenge faced by Indian sector relates to the low level of demand and volume as compared to major markets outside India. Indian manufactures face a cost disadvantage due to lack of economies of scale as compared to foreign manufactures from China and other countries. Further, the availability of components from ancillaries and other suppliers is at a much lower level in India. Also, there are a lot of administrative and infrastructural bottlenecks related to power costs, delays in transportation, delays in import and export clearances, administrative issues, high taxation limits, high interest rates, etc.
After Sales & Support Services is a big business overseas, but not so big in India. Typically, each reasonably sized company in India has its own in-house general purpose maintenance team that handles preventive maintenance as well as breakdown maintenance. Furthermore, relatively low manpower costs make it difficult to convince customers to take up AMCs. However, crane users are slowly realizing the benefits of outsourcing the maintenance of their cranes to specialists, especially where cranes happen to be an integral part of their production process.
Factors that are driving the demand for construction equipment in India
As the Indian economy is growing, fundamental infrastructure facilities such as roads, bridges, power plants, urban transportation will be required. While these types of projects require a good amount of material handling equipment themselves, they will also fuel the growth of several allied industries such as cement, steel, construction equipment etc. Needless to say, the manufacturing sector will also grow to sustain demand from all these sectors. Material handling forms a vital part of any manufacturing process or construction project and is certain to witness steady growth over the next five to seven years.
Availability of skilled operators for construction machinery – a major challenge
The cranes industry in India does face a unique set of challenges and hurdles in today’s scenario. A market with a lot of pent up demand that is set to grow rapidly using more and more sophisticated equipment and technology is definitely going to face a challenge of skilled manpower.
The availability of skilled personnel – both on the shop floors of the equipment manufacturers as well as at the site, operating these machines has been a major concern area for Indian Material Handling Equipment manufacturers. It is a critical issue, but if addressed wisely though proper skill development, it will help companies in optimum utilization of any equipment. A lot of initiatives are being undertaken by the clients and equipment manufacturing companies like us for training equipment operators.
Lack of Safety standards & procedures in construction equipment industry
As far as safety in construction equipment is concerned, it is the responsibility of the manufacturer as well as the user to ensure all guidelines are being strictly followed. Any kind of carelessness while handling material can prove to be fatal. Moving goods against the gravitational force is a calculated science and hence safety is of prime importance.
Employees should be well informed about the basics of safety in the workplace, long and short term storage should be considered while planning the factory layout to reduce hazards and to facilitate proper placement and removal of materials. Additionally, proper material handling training can significantly help reduce the amount of injuries and accidents in the industrial workplace.
Appointment of safety officers by the management and audit of safety in equipment and work place practices plus a clearly enunciated checklist of internal procedures at a construction site will certainly help maintain the lowest accident rates in the industry. It is a good indicator that international companies in building and construction are now forcing Indian companies to upgrade their safety norms and procedures. In my opinion, safety is also a matter of education. It is trying to change people’s mind sets towards customary procedures which are no longer recommended and have become obsolete. It is high time that a safety manual is made part of the decision-making criteria.
The challenges in the widespread use of mechanized systems by real estate developers
Real Estate construction projects in India lag behind developed nations in terms of adoption of mechanization. To put things in perspective, the annual demand for tower cranes in China (with whom we often compare ourselves) is 35000 – 40,000 units. In comparison the total installed base of tower cranes in India is a meager 4000. As pressure mounts on developers to bring projects to market quicker, coupled with the trend towards skyscrapers, we are certain to see a shift in demand towards mechanization in India’s real estate industry.
The real estate market is very competitive with new projects being launched on almost a daily basis. In addition to being able to deliver quicker, using modern construction techniques such as tower cranes also add to the credibility of the project. Further, as the industry moves towards high rises and pre cast construction, tower cranes will become indispensable. In such a scenario, price considerations become irrelevant.
The growth potential of construction equipment sector?
In the Indian construction equipment sector, the industrial cranes segment is highly fragmented. According to ElectroMech’s estimates, the industrial cranes market in India is approximately, to the tune of `1500 crore to `1800 crore per annum. This market size has contracted slightly in the past couple of years due to the slowdown in the Indian economy.
The 100 smart cities project will provide an impetus to the infrastructure sector accelerating the overall economic development of India. The industry is sure to witness an increasing demand for cranes once the projects get going. Also, development of these cities will entail projects on a large scale in an efficient and sustainable manner. Moreover, with the new governments’ emphasis on the revival of manufacturing and allied industries, the company is anticipating the industry to rebounded to around `2000 crore – `2200 crore range in next few years.