Rise of the Urbanators
By Mitalee Kurdekar
If one looks closely at what is happening in the Indian real estate sector, one cannot but agree that change – rapid change – has been the only constant. Robust consumer expenditure within the Indian economy, buoyed by the expanding purchasing power of the middle income population, has steered the economy ahead in the past couple of years. With the growth in the services sector of the economy, people are moving into urban areas, and turning towns into cities and metros into mega-cities. On the other hand, significant reforms like demonetisation, and the introduction of GST and RERA, have turned the realty space upside down. To support private spending, the Government has also initiated programmes like affordable housing and infrastructure development, providing a much-needed push to the real estate sector and, in turn, the products used by developers as well as end users. Elevators & escalators are a perfect example of this.
During 2016, the market for these products was worth Rs 110 billion and now it is slated for a CAGR of 8-9% in the next five years. However, the most noteworthy feature of such growth is going to be the advent and adoption of new technologies that assist with high-speed, efficiency and other smart features. With the latest sensor technologies and internet-based applications, this is already becoming a reality of our times.
The India Story
All of the above suggest that urbanisation is driving the economy in terms of investments and the spending to create demand. Thus, most key elevator & escalator vendors are basing their business and growth strategies on this changing phenomenon. As Sebi Joseph, president, Otis India, aptly puts it, “Urbanisation has been a key change agent for the industry, over the years. According to a recent McKinsey report, by 2030, it is expected that cities will house 590 million people or 40% of the population, and that India will have 68 cities with populations of more than 1 million. As urbanisation continues, and the need for housing and commercial space grows, India’s elevator industry will continue to grow just as rapidly.”
Vincent Pinto, senior VP, new installation business, Schindler India, supports this view as he states, “India is the second-largest elevator market in the world after China, with more than 50,000 elevators being sold every year. The current growth rate of the elevator & escalator market is expected to be about 5-6% with the growing urbanisation in the country.”
A big part of this story is the increasing number of skyscrapers across cities and towns in India. Amit Gossain, MD, KONE Elevators India, further explains, “High-rise buildings are towering achievements that indicate the future of urban living. With the increasing density of super high-rise buildings in cities, the demand for ultra-high-speed lifts is increasing. In response, advanced technologies are continuously being introduced, contributing to some of the most energy-saving vertical transportation systems commercially available.”
As explained earlier, the scenario within the elevator & escalator industry is changing rapidly to bring in emerging technologies and improvements that aim at user comfort, passenger mobility, efficient operations and user safety. Many of these changes are aimed at India-specific requirements like gearless- and machine room-less technologies that address space availability issues. Energy efficiency and re-gen applications are one of the key customer requirements to cope with escalating operational expenses for such elevators. Vying for customer attention, leading players have invested in new technologies or brought in such advancements from their parent organisations to capture a larger slice of the customer demand pie. They are focussing on smart elevator applications and efficient mechanisms.
Shabbir Kanchwala, senior VP, K Raheja Corp, provides a customer viewpoint. He suggests, “India is observing the advent of a fresh generation of elevators & escalators equipped with advanced and innovative technology. The demand for such energy-efficient and lucrative elevators & escalators has witnessed a steady rise over the years. With new technologies and trends entering the market frequently, it is important to have utmost clarity on the elevator’s product range, its quality, and above all its smooth & safe functioning.”
Echoing similar sentiments, Rajiv Batura, senior VP, design & construction – MEP, Omkar Realtors & Developers, states, “Each lift should have features which enable safety and energy conversion, and a controlling system to maintain best-in-class average waiting time (AWT) and handling capacity (HC). With the use of destination control, we have benefitted by being able to recognise the destination floor and efficiently divert a particular lift to the designated floor to reduce waiting time. We are exploring the use of twin elevators, which will provide the desired result of AWT and percentage HC capacity within a limited lift shaft bank. The double decker is also a good option to transfer passengers during peak time with a limited lift bank.”
Explaining how they select the best product, a Kalpataru spokesperson says, “Selection of the product depends on multiple factors. Firstly, the customer expectations and wants, depending on the project – premium, luxury etc. – are considered. The second determining factor is the operational cost. While finalising any product, utmost attention is paid to ensure that safety features are not compromised. We have benefitted from features like destination control system, roller guides for high-speed elevators, permanent magnet synchronous motors, regenerative drives and access control systems.”
All Rise to Technology
Most key vendors in the industry are supported by global majors in terms of the latest technology and feature offerings. The only issue is the adaption of these technologies to Indian conditions and customer requirements. Otis elevators, who are a part of United Technologies Corp., have locally introduced products with features that support sustainable growth. Joseph believes, “As urbanisation drives the increased need for housing, the need for smart and efficient technologies to support growth is becoming a must.” To aid in sustaining this development, Otis’ flagship products, the Gen2 range, are geared towards efficiency whilst providing environmentally responsible features and benefits.
“The ReGen drive captures energy that would otherwise be wasted by the elevator and feeds it back into the building’s power grid. Otis is also working on developing smart elevators. A smart elevator is a connected elevator capable of communicating with passengers. In addition, smart connected buildings, Internet of Things capabilities, and evolving standards of safety and quality will also be elements that benefit manufacturers with a strong appetite for investments in technology,” informs Joseph.
Customers like Kanchwala acknowledge this support, saying, “K Raheja has adopted re-gen drives that regenerate energy during downward movement of elevators. This energy is re-utilised during upward movement, resulting in overall energy conservation. Also, incorporating the use of belts instead of conventional ropes ensures less friction, resulting in significant saving of energy and longer durability of product.”
Gossain is emphatic that in order to meet the customer’s demands of high-rise buildings, there is an ever-existing need for continuous innovation. He claims, “KONE’s history of innovation is one of our success factors, and we always believe in being closer to the customer. We have been on the Forbes list of the most innovative companies for six years in a row, which is testimony to the world-class technology we use. Providing the best people flow experience to create an enjoyable and memorable user experience will continue to be a priority for us.”
Pinto agrees on the innovation focus, when he proclaims, “Real estate developers are increasingly preferring gearless & machine room-less (MRL) elevators over the traditional elevators, which require a machine room on top of the building. We have a track record of introducing innovative products. Our machine room-less and gearless elevators – Schindler 3100IN and Schindler 3300IN – have been widely accepted by our customers. Schindler has consciously stayed away from offering manual door elevator products; and is playing a key role in this positive shift by offering our range of auto-door elevators with standard safety features.”
Challenges and Successes
The Government push on local manufacturing and technology transfer for facilitating that initiative, has received support from many global players of the elevator & escalator industry, who have responded favourably by setting up appropriate facilities or expanding an already available set-up. As Joseph supplies, “Otis recognises the opportunity India presents, and not too long ago tripled the size of its Bengaluru factory. Otis’ R&D centre in India has also significantly expanded its engineering capacity in recent years. The Make in India initiative will enable a deeper focus on what the Indian customer and building segment is looking for.”
He adds, “At Otis, we support the Make in India initiative, and we are continuously working toward localisation of imported parts. We also focus on lean supply chain principles to ensure smooth flow of material by dual sourcing, supplier education on quality and lean process certification for critical safety parts, while ensuring the compliance and upgrading of the overall system quality.”
Gossain highlights KONE’s contribution in achieving cost efficiency through supply base programmes, while stating, “As the demand rises, we would see more investment from the suppliers in enhancing the capabilities. Moreover, as the indigenous content for elevators increases, it lowers the cost of the equipment, making it more affordable for the customers. KONE India has a good supply base within the country for high-quality components. Our import content in our elevators has significantly dropped for our volume products, and we were able to achieve this by sourcing these components within the country through our strong supply chain network. Today, India contributes to global technology development.”
Pinto offers their stance, explaining, “Schindler India, in keeping with its focus on Make in India, and to service the growing infrastructural demands, has set up India’s only MNC escalator manufacturing facility at Chakan in Pune. This state-of-the-art facility is scalable to meet India’s growing demand.”
Talking about the importance of trained manpower to install the systems and support them, Joseph feels, “Availability of trained manpower is a challenge for the entire elevator & escalator industry. With an increasing need for elevators & escalators to meet growing demand in the real estate sector, the industry is facing a shortage of skilled workers that can install and service elevators.”
Pinto agrees and explains, “An elevator is not a plug-and-play kind of product, unlike other building equipment. Just as the design and quality of the elevator is important, it is equally important that it is installed and serviced by trained experts. All Schindler technicians undergo rigorous training and complete certificate programmes, ensuring that the elevator & escalator equipment is in the right hands.”
Gossain provides KONE’s philosophy on this, saying, “The key to our growth has been our ability to embrace change, by investing in people development. We continue to train and hire a qualified team of sales & service engineers and technicians at all levels and regions. We have also set-up three state-of-the-art KONE-owned training centres in Chennai, Pune and Gurugram, equipped to train our people and make them future ready.”
It is clear that while India offers tremendous opportunities for the elevator & escalator industry, its players too are leaving no stone unturned to take advantage of the same. It seems like it’s only going upwards from here on forward.