Curtain Raiser – Focus on India, Hope & Innovation
Focus on India, Hope & Innovation
When bauma 2010 opens its doors on April 18, many of the 3000 exhibitors will have two things on their minds – optimism and India. They would be counting on their innovative products to boost their business activities once again. Niranjan Mudholkar reports from Munich
When Dr Christof Kemmann of the German Engineering Federation delivered his speech at the bauma media dialogue in Munich last month, one could not miss his cautious optimism grounded in hard facts. The two speakers before him had primarily talked about the event and its preparations. However, Dr Kemmann – himself a manufacturer – discussed issues facing the industry. “The drop in demand which occurred so suddenly and nearly all over the world is an enormous challenge for all manufacturers.
Manufacturers of construction equipment are used to seeing fluctuations happening and therefore know how to handle them. However, this time, its scale as well as its speed are unique,” he said. The reference to the recession is quite evident. Dr Kemmann did not mince words when saying that bauma 2010 is likely to be affected by all of this.
Of course, his connect with reality did not deter him in any way from expressing confidence and hope for the industry. “bauma is a positive sign – despite all trends: it is fully booked. This fair is such an important indicator of the mood and situation our industry finds itself in. We hope that a strong bauma will back up the change of atmosphere which is so important for our industry.” He also talked about how the industry could use innovation as one of the key tools to bail itself out.
“It will be very interesting to find out which answers the manufactures have come up with and I am expecting to see a high number of innovations,” he said.
I had met Dr Kemmann in India during Excon 2009 in Bangalore and one thing I clearly remember from that meeting is his observation about India’s response to the global financial crisis. He echoed similar views in Munich: “India was able to get out of the economic crisis very quickly and with hardly any damage. The Indian construction and mining industry expect growth rates of 11% and 12%, respectively, per year on average until 2015.
With this, both sectors are above the expected GDP growth rate. Within the next three years, the demand of machinery and equipment will be increasing by 20%.” And Dr Kemmann was not alone in talking positively about the Indian market.
Most of the exhibitors that I spoke with during the media dialogue had India on their wishlist. Quite a few of them are already present in India or are ready to venture in our market through partners or dealers. It is therefore hardly surprising that India is the partner country for this time’s bauma.
There are of course other strong reasons for this India focus. The market in Europe is still reeling under the effects of recession.
According to the data available with the Committee for European Construction Equipment (CECE) and the German Federation of Engineering, incoming orders and industry-wide sales have dropped by about 50% on average. As Dr Kemmann pointed out, “The fact that numbers of orders in the field of construction equipment and machinery have decreased in 2009 will only become visible in 2010, as lead times have become significantly longer also.”
But the worst seems to be over. The current business climate index as well as the business barometer provided by CECE gives reasons for hope. “This view is supported by the fact that we were able to see a slightly rising number of incoming orders at the end of 2009. Also the bottleneck in stock, which particularly dealers and equipment rental companies experienced, is nearly totally overcome. We also see a slight upturn in the building material machinery business. Projects, which had been put on hold, are being put forward again,” says Dr Kemmann.
Of course, bauma continues to be a huge international affair where buyers from all over the world come seeking a wide range of construction and mining equipment. And the organisers are leaving no stone unturned to ensure the success of this event.