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Future Growth Strategies for Industrial Equipment Manufacturers In India

Here is a list of few strategies that can be adopted by the industrial equipment manufactures in the country to accelerate their growth in the future…

The industrial equipment manufacturing industry aids many other industries, supplying companies with highly specialised products and services such as material handling and earth moving machinery like backhoe loaders, excavators etc. The market is considered to be very competitive, with manufacturers seeking to anticipate demand, to deliver products, to reduce production time and offer increasing services. Thus, keeping in mind the increasing demand for industrial equipment, manufacturers need to constantly be on their toes.

We have listed down few strategies that can be adopted by the industrial equipment manufactures in the country to accelerate growth in the future.

Improving flexibility- Market experts believe that in future, increased flexibility of industrial equipment will write down their future and they are not wrong. An increasingly volatile and unpredictable Indian economy will require industrial equipment manufacturers to build more flexible and efficient operating machines.

Including intelligent features- Productivity and uptime are crucial drivers in the industrial equipment industry, where machine downtime can cost more than $1 million per day. Hence, what will define a bright future would be adoption of newer intelligent features and increased sophistication by the industrial equipment manufacturers.

Providing services- Growing demand for a wider array of both products and services has made service provision another way for industrial equipment companies to enhance their competitiveness in the rapidly changing market in future. Companies can either add services or solutions to their core products or integrate them in.

Creating new areas of value- In future, by systematically developing varied products and services including maintenance, repair and upkeep of traditional equipment, as well as by providing insights regarding emerging technologies, manufacturers could build a positive influence on their customers’ value creation chain.

Giving value-added advice- Industrial equipment manufacturing companies could also think of another strategy for bonding with their customers. They can provide additional information about the potential future buying needs of end-users, creating new business opportunities for their products. In simple terms, to achieve high performance in a competitive business environment, companies will need to take a comprehensive approach to providing services as well as producing quality products.

Increasing visibility- In future, industrial equipment manufacturers will also need to work upon their visibility, branding and marketing in the market across the industry.

Collaborations and acquisitions- Market players in the segment would also need to find new ways to maintain and acquire their leading edge. Collaborating with other equipment companies could be the key to success. Alliance across industry due to the entry of more diverse and technology-driven products into the marketplace could also help.

Aiming at operational excellence– Last but not the least, surging demand for industrial equipment will be placing greater pressure on the manufacturing companies to keep their cost-per-unit steady. Thus, in future, maintaining or improving profitability will be a key to address this challenge. Assembling operational excellence teams focused solely on eliminating or minimising manufacturing process constraints, increasing production efficiency and generating the largest bottom-line returns based on specific profitability and value targets will help stabilise costs.

Industrial equipment manufacturers who will adopt the actions described above will be in a better position to meet current and future demand.

Bright future
There have been several important trends in the industrial equipment sector over the years and the market is supposed to grow at a CAGR of 4-5 per cent until 2016 and the revenue is expected to reach $500 billion. Hence, the industrial equipment manufacturers in India have all the reasons to smile.

Future Of Construction Equipment Manufacturers In India

The construction equipment manufacturers in India have all the reasons to smile. Let’s take a look at what is in store for them in future…

According to the Indian Construction Equipment Manufacturers’ Association (ICEMA), India’s earthmoving and CE market is expected to grow by a healthy 20-25 per cent over the next few years to reach 330,000 to 450,000 units sold in 2020, from current levels of about 76,000 units. This would imply a US$16 billion-$21 billion market, up from today’s $3 billion.

Further, it is believed that the sector will continue to be dominated by backhoe loaders (more than 40 per cent of total demand), but broad-based growth is expected across products, with each segment expected to see double digit growth. Thus, quite obviously the future of CE manufacturers in India is very bright.

Factors Driving the Demand for Construction Equipment

There are many reasons behind the smiling faces of the construction equipment manufacturers in India.

  • Demand for CE is likely to rise as a result of growth in traditional end-user industries, including construction and mining. Such an increased use of CE in previously traditional applications to speed up projects will give a rise to new demand in applications such as digging and material handling, especially in time-sensitive projects.
  • Urbanization will also drive the demand for construction to meet residential, commercial, and infrastructure development needs, thus, giving a boost to the CE industry.
  • New players entering the market will make competition stiffer, thereby, making CE more affordable. This will further deepen the markets to cover users with CE needs who previously had low access.
  • Increased productivity and the reliability of CE ultimately translate into higher profitability from fewer defect-related claims and the avoidance of death penalties. In addition, CE significantly reduce the cost of large-scale projects. End-users are realizing the above facts and moving to heavy CE.
  • Last but not the least, there are clear benefits of using CE over manual labor and traditional methods like improved quality, timeliness, better project financials and safety. This is leading to more and more demand for CE and is bringing smiles on the faces of the manufacturers.

Challenges Ahead For Construction Equipment Manufacturers

If there are many opportunities, future challenges are no less.

  • While CE manufacturers will continue to put in the market increasingly sophisticated machines in greater numbers, the industry might face an increasing shortage of trained manpower to operate and service these machines. While the CE manufacturers do have skill training programs, unfortunately these would not be adequate to meet the expected demand.
  • End-users are demanding world-class technology for better fuel efficiency, higher productivity and profitability, thus, CE manufacturers need to come up with innovative solutions to meet customer expectations.
  • Manufacturers need to adopt inorganic growth strategies such as acquisitions to cope with the increasing demand for heavy CE in the country.

Future of Construction Equipment Manufacturers

The high construction and infrastructural growth, technological developments and their adaptations and rapid urbanization will fuel the growth of heavy CE industry in the country. It is believed that the industry will see major agreements, contracts, joint ventures, and partnerships in future. These strategies will further aid the CE manufacturers to create a large customer and partner base. Already many new CE players have emerged in the country and many more will hit the ground in the coming years. All these players will increase product variety, introduce new applications and services and hence, catalyze growth of CE by increasing supply. Thus, construction equipment manufacturers in India have all the reasons to smile.

Building Construction Machinery Industry to Aid ‘Make In India’ Campaign

‘Make in India’ is an initiative of the Government of India to encourage companies to manufacture their products in India. It was launched by Prime Minister Narendra Modi on 25 September 2014. The main objective of this campaign is to make the country a manufacturing hub for domestic as well as foreign companies. This campaign also focusses on 25 major sectors of the economy of which construction sector is also a part.

In fact, the Smart City initiative aiming to upgrade and build 100 cities stressing urban mobility, low-cost housing and sanitation and sewerage in particular is also a part of this campaign. This has opened up massive opportunities for building construction equipment and machinery industry in the country.

Current Market Scenario
Indian construction industry is one of the most important sectors of the economy as it stimulates infrastructure-building and create growth opportunities for other industries in the economy. In fact, it is the second largest industry in India after agriculture.

Construction activities contribute to more than 8 per cent of India’s GDP. In fact, the Indian construction industry is valued at over USD 126 billion. Today, 50 per cent of the demand for construction activity in India comes from the infrastructure sector; the rest comes from industrial activities, residential and commercial development etc.

All this has brought about a massive change in the building construction equipment and machinery industry. Until recently construction activities in India used traditional methods which were slow and archaic. Now, gearing up to the new realities of timely project execution and provide a boost ‘Make in India’ campaign, there is an increasing need for modernised and mechanised methods of construction to ensure timely delivery of projects. Further, these days, much importance is given to quality of construction as well. Hence, there is an increased demand for building construction machinery. These range from off-highway vehicles to lifting equipment like cranes, hoists etc., to material handling equipment like backhoe loaders to batching plants, road equipment like compact vibratory rollers, pavers, asphalting machines etc.

Going further, earth moving equipment is the biggest segment value wise within the construction equipment segment and the single biggest share therein is of backhoe loaders followed by excavators, wheeled loaders, skid steer loaders, dumpers-tippers etc.

Future Trends
Keeping in mind the facts that present levels of urban infrastructure are inadequate to meet the demands of the existing urban population, there is need for re-generation of urban areas in existing cities and the creation of new, inclusive smart cities to meet the demands of increasing population and migration from rural to urban areas. This has directly impacted the growth of construction as well as construction equipment sector. To add fuel to it, ‘Make in India’ campaign has also started gaining ground in India and is positively impacting this segment. Thus, the Indian construction equipment market is set to expand by seven times between 2012 and 2020 to over $22 billion.

Overview of Heavy Earthmoving Equipment Industry

The global heavy construction equipment industry is projected to grow at a CAGR of 6.80 per cent from 2015 to 2020 of which the heavy earthmoving equipment is the fastest growing segment across the globe and India is no exception here.

Large investments in urban and rural infrastructure, such as the building of IT parks, shopping malls, highway networks, residential areas, roads, ports and irrigation systems is driving the demand for heavy earth moving and material handling equipment industry in the country.

Market Overview
The Indian construction equipment sector is made up of five main segments, namely, earth moving equipment, road construction equipment, concrete equipment, material handling equipment, and material processing equipment. Out of the five, heavy earth moving equipment and road construction equipment segment accounts for close to 70 per cent of India’s construction equipment market. In fact, the earth moving equipment industry is the fastest growing segment in the heavy construction equipment market not only in India but across the globe.

Coming to the definition of earth moving equipment, then they are generally referred to as heavy equipment or heavy-duty vehicles designed especially for executing construction operation which mostly involves earthwork operation. They are most commonly used in the construction industry to move large amounts of earth or to dig foundations and landscape areas.

The heavy earth moving equipment operate through the mechanical advantage of a simple machine where the ratio between input forces applied and force exerted is multiplied. They mostly use hydraulic drives as a primary source of motion.

On the basis of operations performed by the various machines in the segment, the earth moving equipment industry can be bifurcated into excavators (compact excavator, dredging, dragline excavator, front shovel and others), loaders (skip loader and wheel loader), backhoe loaders, construction tractors and others (grader, scraper, track loader and material handler etc). Out of all, backhoe loaders account for 65 per cent of heavy earth moving equipment segment.

As a matter of fact, India is the second largest market for backhoe loaders in the world. The market for backhoes is spreading eastwards, largely due to the way in which India is making progress in the infrastructure segment. Backhoe loader segment is perhaps the only one in India amongst heavy construction equipment that has reached a stage of maturity.

With the continuously changing operating conditions, it is becoming essential for the manufacturers and service providers to continually invest in research and development activities and come up with innovative solutions in the heavy earth moving equipment segment.

Future Market Trends
Increased usage of earth moving equipment in construction activities is imperative to help drive the growth of the industry in the long term. There are clear benefits of using earth moving equipment over manual labour and traditional methods like improved quality, timeliness, better project financials and safety.

As a result, the heavy earth moving and material handling equipment segment is projected to grow at the CAGR of 8.42 per cent from 2015 to 2020. It is believed that the key players in the segment will implement different strategies such as expansions, agreements, contracts, joint ventures and partnerships to garner a larger share in the market. Further, the leading heavy earth moving equipment providers in the country will also focus on countries with emerging markets that are likely to show potential for industrial development in the near future.

What It Takes To Be The Best Backhoe Loader In India

Let’s take a look at some of the features that define the best backhoe loaders in the industry today

Backhoe loaders—this machine has been the superstar of construction equipment as well as the material handling industry since quite a long time. Ever thought what makes the backhoe loader so popular? It is its versatility! In an era when Indian equipment manufacturers are designing machines to do as many jobs as possible or trying to follow the ‘Swiss-army-knife’ approach, the backhoe loaders with its versatility are winning hearts. The machine is at once a dedicated trenching unit as well as a front-end loading tool.

Be it building sites, roadwork areas or places where earth-moving is required, backhoe loaders can be spotted everywhere. Most backhoe loaders feature quick-attach mounting systems and auxiliary hydraulic circuits for simplified attachment mounting, increasing the machine’s utilisation on the job site. Let’s take a look at what it takes to be the best backhoe loader in India…

  1. Powerful mechanics- A powerful diesel engine at the heart and amazing hydraulics define the best of backhoe loaders in India. The diesel engine creates power while the hydraulics amplifies it. The power of the diesel engine and the capacity of the hydraulic systems differ from variant to variant.
  2. Highly fuel efficient- Further, for a backhoe loader to be the best-in-class, fuel-efficiency is the primary requirement. Here, Mahindra Earthmaster VX deserves a mention. It offers best-in-class fuel efficiency (4.5* litres per hour) with the proven Mahindra DITEC engine which implies it saves 10 per cent more.
  3. Low maintenance cost- When identifying the best backhoe loader, it is also important to consider the maintenance cost. The lesser the cost, the better it is and this is very much possible with the modern machines in the segment. With better technology and design enhancements, the modern machines are very much able to reduce the overall maintenance cost. So, you can have your peace of mind while this excellent machine does its work.
  4. Superior productivity and performance- It is another criteria for judging the machine’s productivity. Here, one should note that Mahindra EarthMaster comes with Banana Boom with 7 per cent more reach, rugged and reputed gear pump and has maximum dig depth and loader dump height.
  5. Intelligence matters- Apart from strong mechanics, machine’s intelligence should also be considered. So, if a backhoe loader comes with remote monitoring features that allows you to get daily work report, fuel level notice and maintenance warning through SMS, then nothing like it.
  6. Effortless operations with joystick- Since effortless and fast operations is the need of the hour, this feature also assumes a lot of importance. A joystick is usually used to manoeuvre this complex system to make heavy duty work seem much easier and effortless than it actually is. A joystick makes for accurate and smooth power control.
  7. Highly communicative- Not only the equipment should be great, but it should communicate effectively as well. If any backhoe loader meets this requirement, then it should be considered to be the best-in-class. Today, the highly advanced backhoe loaders come with a Radio with a 2-way Speaker System that facilitates communication with the operator and through him, with people on site. It becomes effective and useful in congested sites and in large sites without mobile network.
  8. Highly convenient and comfortable- Last but not the least, comfort also matters. Backhoe loaders should be such that they are easy-to-use and operate.

So, by now, we are sure that you would have understood as to what it takes to be the best backhoe loaders in India.

Road Construction Machines

y. Standards are as high as 15 and 20kms of high quality roads per 1000 people. Internationally the bar is set quiet high and the new government not only seems to be determined to meet the bar but raise it too!

Keeping these stats in mind, here are some interesting things to know about the road construction machines that make these plans of a denser and better road network become a reality.

1. Motor Grader: A motor grader is an earth moving equipment that creates an evenly flat surface to lay the asphalt. Most motor grader models are tri-axle, two rear ones and one on the front with a long blade in between. The engine and cab are usually located above the rear axles. A motor grader lays the foundation for an evenly flat road.

2. Asphalt Mixing Plant: This mixing plant is what is used to manufacture road stone like asphalt, cement and other coated road stones. This mixing plant is a quintessential road construction machine without which the road construction process would take much longer and cost much higher. The plant combines various individual elements like sand, mineral, fillers, cement, fillers etc. in the appropriate proportion to lay on the road. The plant keeps the mixture hot so it doesn’t set before it is laid down on the road.

3. Road Roller: A road roller is one of the heaviest machines used in road construction. Once the asphalt is laid down on the road in several layers, the road roller is used to press it down in place. A road roller presses the asphalt in place and binds the various layers together to form a strong road that can sustain wear and tear over time. Rubber drum rollers, double drum rollers and a combination of the two are the most preferred type of rollers.

4. Excavators, Backhoes: These are earth moving equipment used to dig and clear land to make it suitable for the road. This equipment can be used to break asphalt on old roads and clear it to make way for the new asphalt roads. Backhoes and excavators are also used to carry dug earth from one place to another and also to fill up the trenches that were dug. These act as material handling equipment too, making things easier on the job site.

These are just some of the basic machines that are required on a road construction site. Over the years with developing technology, the whole process of road construction has sped up to meet the growing need for infrastructure around the world to keep pace with its population and its high ambitions.

Double digit growth expected in the Indian Construction Equipment Industry

The government of India is in the process of opening the flood gates for the Indian construction equipment industry with its increased focus and investment in the infrastructure sector. Policy changes have been initiated to support growth of construction equipment manufacturing industry. The policy changes will directly support the much needed acceleration of growth of infrastructure. Real estate is growing at a pace like never before to meet the increasing needs for urban housing even in the tier 2 and tier 3 cities. The CE industry can cash in on this bloom by strategizing well and focusing on the quality and competitive edge of the products.

International standards have become the benchmark when it comes to infrastructure from both architectural and engineering perspectives. Be it roads, bridges, commercial buildings or residential projects, the required quality has come on par and on some occasions exceeded global standards. This has again created a demand and supply void for elite quality construction equipment to meet the overwhelming needs of fast growing India.

Be it your dream home or a monumental high-rise or anything in between for that matter construction equipment like tractors, backhoe loaders, motor graders, bucket trucks, cranes, crawlers, etc are mandatory and a pre-requisite right from the start to the completion of the project. The quality of these necessary equipment’s decide the pace and economics of the projects, whether people and companies will rake in profits or suffer losses. Optimum utilization of machinery and planning reduce costs considerably.

Equipment quality is king in these changing times, it increases labour efficiency, saves on time, are safer for the handlers and reduce the number of accidents on site. All in all the better the quality of the machinery, the more time and money is saved, helping the projects achieve milestones faster.

As more and more construction projects take off well, the demand of construction equipment industry in India is surely going to rise manifold. However, contractors or construction project managers will find renting or leasing construction equipment as more economical than buying it as the former saves their capital from being tied up, which can be put to other uses.

Moreover, as newer equipment guidelines are enforced, the older equipment become outdated. And so construction project managers will need to invest wisely in the equipmens with better and advanced technology such that performance and operating economics also get a boost.

So the goal of the Indian construction equipment companies should be to manufacture international quality equipment and also offer customized options for various activities. The challenge that lies ahead for CE manufacturers is to produce equipment of high strength, durability, and engineering capabilities, safety measure and high performance which can be used on India’s tough terrain.

Rising trends of the Indian Machine Makers

The change of leadership and favorable revision of policies by the government will prove to be a boon, which can very well be expected to push the evaluation of the industry well beyond the forecasted 21 Billion USD.

Research and opinions from industry experts have helped us identify the trends that are likely to reign the construction equipment manufacturing industry in India for some time to come.

1. The Shift- Hardware to software

The construction industry being a heavy weight lifter, focus of construction equipment manufacturer’s had always been the hardware in the past. IIoT is slowly and surely shifting focus to the software, data and analytics. More and more significance is being laid on data analysis and communication between machines, slowly taking human interaction out of the picture. Intelligent use of data will change the way construction equipment is perceived by the industry insiders and the outsiders as well.

2. Service is the key

Service is becoming an integral part of the industry. It is no longer sufficient to just manufacture the equipment, service and training are becoming proverbial faces of the industry. The equipment servicing and maintenance is slowly becoming the domain of the manufacturer.

3. Skilled labor development

The ground reality still remains that despite monumental upgrading in the technology department, India does not have sufficient skilled labor to make the most of the advanced tech that is now available. The big players of the industry have taken it up on themselves to develop skilled labor by bringing to light the fact that they can earn more than the lower level IT workers. More and more training centers are cropping up throughout the country to meet the needs of a growing industry.

4. Parallel Play

The growth of infrastructure and the construction equipment manufacturing industry has proven to be directly proportional through the years. The announcement of “Make in India” has opened the gates for fast paced infrastructure development in various parts of the country, which directly fuels the growth of the ECE industry in India. The experts in the industry see the industry growing at an unprecedented rate of 20-25% for the years to come.

5. Cost of convenience

Renting equipment is emerging out to be the new vertical that ECE manufacturers have started nurturing. Renting equipment reduces the overhead costs creating win-win situations for both sides. It is not long before the Uber of Construction equipment takes the industry by storm, renting out construction equipment at the swipe of your fingertips.All in all these are very exciting times to witness the changing dynamics of an industry that has the potential to both rise itself and raise up with it- a country of billions.