The Great Shift

Although the industrial cranes industry remained fragmented for a long time, there is definitely a shift towards getting organised as the market rises out of the recession

With infrastructure development put on the fast track immediately after the formation of a new government at the centre, things started to improve for all associated segments of the industry. One of these segments definitely has been the industrial cranes sector.

As Tushar Mehendale, MD, ElectroMech India told us during an interview, the industry ‘started seeing a renewed enthusiasm again in the marketplace with finalizations happening at a frantic pace and customers starting to chase us for faster deliveries.’ “Based on the visibility afforded to us by the volume of qualified business enquiries, we are quite optimistic about the overall direction of the market,” he told us.

Things have definitely started to look better which also explains the opening of Demag Cranes new production plant in Chakan with an investment of more than EUR Eight million. Besides standard cranes and crane components, the product range in future will also include the technically more complex process cranes which are specifically integrated into the production process.

“With the extension of our production capacities we have not only strengthened our foothold in India but also paved the way for significantly improving our competitive situation in our industry,” said Suhas Baxi, MD of Demag Cranes India at the opening.

Both ElectroMech and Demag are key players in the Indian industrial cranes industry today. The other key players are Kone, Mukand, Stahl, Anupam and WMI. Together, these seven players account for about 30% of the market share. About 150 smaller regional players take up the remaining 70%. According to Mr Mehendale’s estimate, the industrial cranes market in India for 2010 is pegged at `2500 crore.

Throwing more light on the technical format of the market, D Anand, GM, Stahl CraneSystems India Pvt Ltd says that a large portion of market is still catered by engineered cranes (where every crane is designed and fabricated) by local crane manufacturers. “However, now the growing trend is towards ‘standard cranes’, a term coined in Germany for cranes built with standard hoists and crane components with lesser wheel loads, smooth operation, great ergonomics, lowest maintenance requirements,” he says.

The key driver of the industrial cranes industry currently – as Mr Mehendale says – is primarily the infrastructure industry. “It is then closely followed by steel and then the automobile industry. Within the infrastructure industry construction and power projects are the main drivers,” he says.

Mr Anand’s opinion is quite similar. “I feel automobile manufacturing, infrastructure, construction machinery, power, machine tools, manufacturing of industrial equipment as well as oil and gas could be leading the growth,” he says.
The customers for industrial cranes in India are today facing serious pressures both in terms of time as well as quality for their respective projects.

“With exposure to better quality and technology, we know that the organised players from the industrial cranes market can address our requirements more efficiently and would offer better RoI,” said a Delhi based construction contractor on conditions of anonymity. It clearly echoes what Mr Mehendale told us - “Now, the customer takes pains to go through the complete technical specifications and ensures that the end product encompasses all the functional aspects as well as other aspects like reliability, safety, ease of maintenance, etc.” This definitely represents the shift in the approach of the customer who had to live and work with substandard equipment before the availability of good cranes. And this is good news for the industry.

Overall, there is a sense of optimism based on the understanding of ground reality. It wouldn’t be wrong to say that Mr Mehendale’s statement summarises the industry’s thought process, “India is an exciting market to be present in over the next 20 years and we hope to make the most out of the unique opportunity afforded to India over its entire history.”

Recent industry highlights

• Demag Cranes opens new facility in India: The plant, located 30 km from Pune, is designed for a production capacity of up to 600 Standard Cranes and 100 Process Cranes per year. Parts for the KBK crane construction kit are also manufactured at the location – up to 24 km of KBK rails can be produced per year.
• ElectroMech brings light weight HB cranes: Pune-based ElectroMech has announced adding light weight HB crane system to its existing product line. The company has tied up with Abus, a European crane manufacturer, to produce this range in India. The HB cranes cater to a wide range of load handling applications from 80kg to 2000kg and are used extensively in the automobile assembly lines.
• ElectroMech ties up with Stahl for EX cranes: ElectroMech will assemble and market EX range of cranes in India for the oil and gas exploration. Together, they are looking at capturing about 5% to 10% of total market size over a period of one and half year to two years.
• Cranedge, India’s first and only organised after sales service company for cranes is established.
• Stahl spreads its reach: Stahl has also joined hands with Grip Engineers Ltd, Faridabad for North India market business development; Toubro Ferguson Engineers Pvt Ltd, Kolkata for Eastern Region and with Shivpra Cranes in Hyderabad.