Digging up Demand
Even as India readies itself for rapid infrastructural development, a move by the Government that has been met with wide-spread approval all around, any development in our vicinity is still met with the standard response reflecting frustration about noise and dust pollution. However, that is about to change. OEMs and key vendors from the earth-moving and construction equipment (ECE) industry are introducing new technological advancements for their products like excavators and motor graders, where issues like pollution, safety and turnaround time are key deciding factors for developers.
With the focus on infrastructure and urban development projects, the demand for such equipment is already heading northwards, and is bound to surge in the coming years. The bulk of this construction demand originates from the growing transport sector consisting of roads, railways, sea ports and airports; new urban infrastructure projects like mass rapid transit programmes; water supply schemes; the development of new cities with urban housing needs; and from rural irrigation and road connectivity projects. Given this impetus, the ECE industry is estimated to grow by 20-25%.
Bright Future Ahead
Key players in the industry share this optimism about the forecasted positive demand figures. Jasmeet Singh, head, corporate communications and external relations, JCB India, shares his perspective: “Excavators have shown a healthy growth rate in the year 2016, over 2015. With the Government’s thrust on infrastructure and subsequent allocations in successive Union Budgets for infrastructure projects, we foresee a favorable demand rise in the excavator segment.”
Shalabh Chaturvedi, head, marketing, CASE India, echoes similar sentiments. “India has the second largest road network in the world. With a focus on building new highways, graders are in high demand for quality road construction. The construction equipment market is expected to show a positive outlook by 2020. The domestic construction industry has become a driving force due to various Central Government initiatives and investor-friendly policies,” he explains.
VG Sakthikumar, MD, Schwing Stetter Sales and Services, points out that, “Every year, the growth for motor graders is going to be at least 25-30%. Roads and highways and the mining sector are going to be key drivers.”
Suggesting key factors for sustainable growth, Sanu George, business head, SDLG India, says, “Urbanisation of rural areas, increased road connectivity within and between states, and the general development of infrastructure are all key drivers in this sector. At the same time, in the last budget, there was a record amount set aside for the development of infrastructure, so that should mean demand for construction equipment, including both motor graders and excavators, will continue to thrive in the years ahead.”
The Need for More
However, the heightened demand does not mean it is a suppliers’ market. Consumers are looking for improved features, which has becoming a deciding factor in picking a piece of equipment over another. OEMs and equipment providers view this as a challenge, albeit a welcome one. Offering better features and best-in-class products has become the mantra to stay ahead of the game.
Outlining a customer perspective on changing business requirements, Santosh Kolekar, EVP, projects, Panchshil Realty, suggests that, “The expectation from new-age excavators is that they should produce less noise and less vibration. To achieve this, we have been using eco-friendly pulse plasma rock fragmentation technology at various Panchshil project sites. This has served as an excellent alternative to conventional control blasting with numerous advantages. It produces lesser noise, vibrations and dust, thus causing close to no impact on the surrounding areas. The resonance frequency does not overlap to the building/structure, hence this technology is safe to use near a building/structure. And the best part is that it produces no gases/fumes and causes no flying of rocks, making it absolutely safe.”
Dimitrov Krishnan, VP and head, Volvo CE India, further mentions, “Our customers appreciate the cost savings and operational efficiencies that Volvo machines offer. The EC210D, for example, features best-in-class fuel efficiency and Volvo’s ECO mode. This significantly lowers fuel consumption and reduces operating costs. In addition, Volvo offers a comprehensive range of attachments for use in a wide variety of tasks. Such a broad selection of buckets and breakers allows machines to operate at optimum efficiency in any working condition. Most important, though, is the level of customer service that Volvo CE provides.”
Singh adds, “Today, customers demand machines that offer the best-in-class productivity, reliability, profitability, without compromising on safety and comfort. In terms of performance, our all new 22T excavator, JCB220LC Xtra, a state-of-the-art machine, comes with the gross power of 170 hp and a bucket capacity range of 0.8 cum to 1.2 cum. It is 8% more fuel efficient. With eight power modes and smart controls, this machine is 7% more productive in H+ mode. It comes with Livelink – which ensures that customers can now manage and monitor their fleet remotely through their smartphones or mobile devices – and air-conditioning, as standard.”
Of course, engaging with customers to understand their precise business requirements is imperative. Shabbir Kanchwala, senior VP, K Raheja Corp, says, “Our business needs differ from one project to another. The capacity and tonnage of the excavator are based on the location finalised. We also guarantee that safety standards are taken care of and are in line with the HSE specifications. To achieve greater performance, we ensure that there is low fuel consumption and minimal maintenance cost. The OEM has to undergo a thorough quality check, and the quantum of the excavated soil and rock is verified. They need to understand the requirements and suggest timelines along with an equipment deployment plan, and submit suitable proposals to us.”
Sachin Bhandari, CEO, VTP Realty, points out that, “The newly launched mini excavators are perfect for smaller jobs and smaller areas, while maintaining their performance. These machines are also maintenance-friendly with most requiring maintenance once in 500 hrs. Such types of innovation are always welcome as they improve efficiency and productivity, thus reducing the time required for any project.”
Innovation: The Path to Success
Although the demand curve is shaping well for all vendors, no efforts are being spared to bring in innovation and advanced technological inputs in excavators and graders. Since these products are used across difficult terrains and differing conditions, developers are seeking ways to counter the challenge brought on by complex projects. On their part, vendors have become highly innovative in developing versatile product features. This helps them to create sustainable customer relationships and bring in repeat and referred orders.
Singh proudly declares that, “One of the biggest technology advancement in the industry is the introduction of Telematics through JCB Livelink. All JCB customers with Livelink-enabled machines get SMS alerts on their mobile phones or smart devices regarding service, operations and security of their machines. This data is stored over time and thereby provides vital information in terms of number of hours the machine has been operational, service intervals, fuel levels, malfunctions if any, etc.”
Dwelling on their own strategy, Chaturvedi supplies, “CASE India emphasises on continuous product development to improve the equipment’s performance, increase fuel-efficiency and durability. We focus on the use of quality engines along with regular maintenance across our equipment, which helps deliver excellent fuel-efficiency. This helps in speeding up the process of complex projects. The company has successfully lowered the sound levels in all its construction equipment.” CASE India also supports its customers with its Eagle Eye Telematic System, which is a real-time vehicle tracking and communication system based on GPS technology.
Sakthikumar speaks of features in their repertoire that set them apart. He explains, “We have introduced brake pads with spring return that automatically adjust their position. Therefore, the brake efficiency and braking distance is always under control. Also, we have an automatic levelling system with ultrasonic sensors, proximity sensors, and a dedicated control system to help maintain the pre-set grading profile irrespective of the operator’s efficiency and experience. Finally, telematics is used for sending real time machine performance data to the owner’s data centre.”
Krishnan suggests that Volvo CE offers high quality and productive equipment that delivers the best levels of fuel efficiency in the industry. “As a result, our customers can do more with their equipment and downtime is minimised. Our lower fuel consumption improves cost efficiency and means work environments are cleaner,” he states.
Other Value Propositions
Acknowledging that the unit cost of excavators and graders is seriously high, vendors have resorted to novel ideas to make the deal sweeter for customers. In addition, customers have begun to look at these machines as a long-term investment and one with good realisable value. Therefore, cost is not always an issue.
Singh says, “In addition to world-class products, after sales support is critical and greatly contributes to the reliability of the machine. Over the years, we have set-up the largest distribution network in the industry. To address the challenge of machines which are operating in deep interiors of difficult and arduous Indian sites, we also have mobile vans that operate on the concept of Workshop on Wheels. These vans are fully equipped to handle most service and repair jobs on JCB machines. Additionally, we have initiated various customer connect programmes and service campaigns, wherein our trained service engineers visit customer sites across India and offer Service & Parts support.”
Chaturvedi explains, “CASE India offers product support throughout our centres providing spare parts, manuals and technical support to minimise downtime and maintain production schedules. Through CASE India customer care centres and dealers, customers have access to world-class equipment and aftermarket support along with industry-leading warranties and flexible financing.”
Sakthikumar believes that, “Many customers also prefer to rent motor graders instead of outright purchase, since some motor graders are only required for short-term use, to increase the speed of completion of grading work.”
Talking about other means of revenue generation and value delivery, Krishnan suggests, “The principle of buying a total solution, which includes equipment, support and sometimes financing, is well-established in many countries. This arrangement is becoming more prevalent in India as the market matures and customers begin to take a longer-term view on investments.”
And this maturity bodes well for the industry as a whole. After all, the fact that the market is truly coming of age is a heartening realisation, given that both developers and vendors will benefit as a result, and more so because it means that there is hope for India to sustain her current, fast pace of development.