Boost to Infrastructure in Budget 2019-2020 to Increase CE Demand
It is for the same reason that the sector enjoys intense focus of the government. Particularly, the present government has been focussing much on the overall infrastructure development in the country. This is quite evident from the ambitious infrastructure projects being launched and increased budgetary allocations to infrastructure segment that the government is making since the time it came into power.
Generally, infrastructure sector includes power, bridges, dams, ports, railways, roads, real estate and urban infrastructure development. All the sub-segments of infrastructure have been receiving equal focus from the government in past few years.
Infrastructure initiatives taken by government in Budget 2019-2020
If we particularly talk about the recent Budget 2019-2020, then it saw increased budgetary allocation by the government to boost the infrastructure segment of the country. Here is a look at all those actions and steps of the government…
1. A total of Rs 4.56 lakh crore was allocated to the infrastructure sector which included roadways, railways and aviation segment.
2. Railways received a budgetary support of Rs 66,768.67 crore, up from Rs 55,135 crores and saw 21 per cent increase.
3. A big sum of Rs 1,58,658 crore was allocated as the capital expenditure for the railways, up from Rs 1,38,857.52 crore in 2018-19.
4. The roads sector was allocated a sum of Rs 83,015 crores.
5. An upgraded allocation of Rs 19,000 crore was made on rural roads under the Pradhan Mantri Gram Sadak Yojana (PMGSY) from a sum of Rs 15,500 crores in 2018-19.
6. The shipping industry received an allocation of Rs 1902.56 crores. Furthermore, Rs 550 crore was allocated for port and coastline development under the flagship programme named ‘Sagarmala’, as against Rs 381 crore in 2018-19.
7. The aviation sector was allocated Rs 4500 crore.
Other initiatives by the government
Not only the 2019-2020 budgetary allocation has given a momentum to the infrastructure sector but various other initiatives of the government that it took earlier for the future are having a huge and positive impact on the sector’s growth. These steps include:
1. The biggest ever Highway Development Plan to construct 83,677 kms of roads at an investment of Rs 6.92 lakh crore by 2022 is approved and being implemented. It includes the Bharatmala Pariyojana which aims to build 66,100 km of economic corridors, border and coastal roads and expressways to boost the highway network in the country.
2. Under the Bharatmala Pariyojana Phase-I, a total of 34,800 kms including the balanced road works under the National Highways Development Project (NHDP) are to be completed by 2021-22.
3. $ 82 billion will be invested by the government by 2022 under Bharatmala Pariyojana.
4. A total of 200,000 km national highways are expected to be completed by 2022.
5. Government has decided to invest Rs 7 trillion (US$ 107.82 billion) for construction of new roads and highways over the next five years.
6. Government is also planning to upgrade 10,141 kms of roads in the North-East region through three-phased Special Accelerated Road Development Programme which aims to improve road connectivity in all district headquarters in the North-Eastern region. Phase A of the project includes upgradation of 4,099 kms of road by March 2021.
7. Under the ‘Housing for all by 2022’ scheme, the government is aiming to develop about 11 crore houses.
8. The government is also aiming to develop 98 smart cities in the country.
9. In May 2018, India signed a USD 500 million (Rs 3,371 crore) loan pact with World Bank to provide additional financing for PMGSY rural road projects to build 7,000 km of climate-resilient roads.
Thus, by analysing the present budgetary allocation to the infrastructure sector and various other steps taken in the past, it is quite evident that the infrastructure sector is set to see a major boom in the time to come. This trend will definitely increase the demand for CE. This is because more and more CE would be required to complete the infrastructure projects on time.
Impact of the infrastructure development on CE demand
All the above-mentioned steps taken by the government for overall infrastructure development in the country will clearly have a positive impact on the construction and CE sector. Be it the construction of railway or aviation infrastructure, development of highways and rural roads or any other infrastructure development, construction industry will receive a major boost and particularly, CE industry will smile its way to glory.
Well, expecting an unprecedented growth of the CE segment, the manufacturers in the segment are not leaving any stone unturned to cater to this growing demand. In fact, well-known players in the CE segment like Mahindra Construction Equipment (MCE) with its flagship Mahindra EarthMaster backhoe loaders and Mahindra RoadMaster motor graders are gearing up well to embrace the projected growth of construction and the CE sector with grace. It is doing so by diversifying its range of offerings, introducing newer variants of the existing line-up and launching more innovative and environment-friendly products and services for the customers.
In a nutshell
With the government realising that infrastructure is the backbone of the nation’s development and quality of life, the focus on infrastructure is drastically increasing. This is having a direct impact on CE sector. Thus, a bright future of the CE sector can be clearly seen, especially after looking at the budgetary allocation to infrastructure sector in the Budget 2019-2020.
Construction Equipment Industry Supporting India’s Growth Story
In lieu of this, the investments on infrastructure building have increased considerably in the country in past few years and are expected to continue to rise in the future as well. It is believed that the country would require about $7 trillion infrastructure investment over the next seven years and for that the government has already started taking proactive steps.
Further, India is continuously pushing for the development of well-developed road network and highways in the country. In fact, the budgetary allocation for National Highway Authority of India (NHAI) has increased considerably in the recent years. Also, the government is aiming to develop the Golden Quadrilateral connecting four major metropolitan cities viz. Delhi-Mumbai- Chennai-Kolkata. Construction of North South and East West Corridors (NS-EW) connecting Srinagar to Kanyakumari and Silchar to Porbandar with a spur from Salem to Cochin is also on cards of the government. Government is also aiming at six laning of existing four-lane highways.
In addition, due to the government’s impetus and focus given to the ‘Make in India’ initiative, the manufacturing sector in the country is also growing at as fast pace. Further, the real estate market in India is expected to reach $ 180 billion by 2020. All these initiatives and developments are having a very positive effect on the Construction Equipment (CE) segment of the country which greatly impacts various other sectors of the economy.
It is believed that the CE market in India has the potential to grow to $5 billion by 2020 on the back of infrastructure and manufacturing growth. Here, it would not be wrong to say that the CE sector growth, if properly stimulated by the government and honestly pursued by all the manufacturers can surely generate positivity across not just Indian but the global economy as well.
Tracing the journey of CE segment
Until 1960s, domestic requirement of CE was entirely met by imports. However, change came about in 1964 when domestic production of CE began with the setting up of Bharat Earth Movers Ltd (BEML), a public sector unit of the Ministry of Defence, at Kolar in South India. This was set up to manufacture dozers, dumpers, graders, scrapers, etc., for defence requirements under licence from LeTorneau Westinghouse, USA and Komatsu, Japan. Gradually, private players joined the bandwagon.
One of the most notable entrants in the CE segment in the country is the Mahindra Construction Equipment (MCE), a part of US $19 billion Mahindra Group. It started its business in the CE segment in India in 2011 with its revolutionary backhoe loader—Mahindra EarthMaster which is loaded with technology not hitherto seen in this product segment in India. Then in 2017, MCE entered into the fast-growing road CE segment with the launch of motor grader—the Mahindra RoadMaster G75 which is made in India for the Indian roads.
With decades of innovation by indigenous players as well as the entry of multinational corporations, today, India has become self-sufficient in the CE segment and has even started exporting CE to other countries. In fact, the Indian CE industry has traversed a long way since its initial days and has seen huge investments made by national as well as international companies for setting up their manufacturing bases in the country. Here, it is worth mentioning that India has a great advantage over the foreign countries as the equipment manufactured in the country are not only cost-effective but also better in reach and support as compared to the neighbouring countries.
Overall, with a wide production capacity base, India has become perhaps the only developing country in the world which is totally self-reliant in manufacturing some of the highly sophisticated CE.
CE supporting India’s growth story
In the recent past, many ambitious projects have been announced by the Indian government and for all those projects, the eyes are on the CE segment which can help in completing these projects. These projects include highway development program, Smart Cities Mission, Bharatmala Pariyojana, Sagarmala Programme for modernisation of ports, increasing connectivity and port linked industrial hubs, airport development and upgradation program, Jal Marg Vikas, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Housing for All and Diamond Quadrilateral for high-speed railways, river linkages and bullet trains. Even the rural infrastructure development has picked up the pace in the country.
Thus, time has come when the CE industry has to think more proactively followed by sure-short actions to meet the growing demand of the future as the country marches ahead to become a global leader by 2020. The Construction Equipment manufacturers need to come up with innovative solutions like remote access devices, automatic controls to manoeuvre machines, more efficient (Tier III) engines, cabin air-conditioning etc. The CE manufacturers need to make equipment which are in compliance with the new as well as the future norms. Well, here MCE’s contribution should be surely noted. Its Mahindra EarthMaster backhoe loaders
In a nutshell
Rapid urbanisation and growth in infrastructure as well as manufacturing sector would definitely fuel the demand from the Indian Construction Equipment manufacturing industry over the coming years. And it would not be wrong to say that the CE industry would be hugely responsible for supporting the India’s growth story.
Mining and Construction Equipment Sector Likely to Grow by 2019
This is because of the fact that the mining and construction industry require a wide range of machines to perform a variety of tasks such as preparation of ground, excavation, haulage of material, dumping/laying in specified manner, earth moving, material handling, road construction etc. As a result, a wide variety of equipment are used in the mining sector. These include hydraulic excavators, backhoe loaders, dump trucks, tippers, pavers, asphalt drum/wet mix plants, breakers, vibratory compactors, cranes, forklifts, dozers, drills, scrapers, motor graders etc. All the above stated equipment help in achieving efficiency, accuracy and productivity at the mining and construction sites. In addition, they save time and labour costs as well.
Market scenario for MCE
As per the rating agency ICRA, “The demand for Mahindra Construction Equipment grew by over 35 percent during the year 2016, overcoming four consecutive years of weak demand. Further, the sector grew by 13-17 percent in 2017.” ICRA further believes that the MCE demand may be affected by Union elections in the first quarter of 2019 and the growth of the sector may slow down to around 4 per cent in the beginning but it will pick up in the second quarter of 2019.
A note on equipment used in mining industries
The mineral rich soil of the country is leading to major mining activities and this is highly impacting the mining equipment demand in the country. Majorly, the demand for earthmoving equipment like backhoe loaders which are used to move earth and minerals and motor graders which are used for constructing haul roads at the mining sites are seeing good growth.
Backhoe loaders, the highly versatile and multipurpose machines are extensively used at the mining sites. An extensive range of attachments can be easily attached to the backhoes to perform some of the most difficult tasks at the jobsite such as lifting, grabbing objects, dozing, drilling or levelling the ground. For example, the hydraulic breaker, auger, dozer blade, forklift, loader coal bucket and various other backhoe attachments are used at the mining sites.
One of the other most popular equipment used at the mining sites is motor graders. They are used for constructing and maintaining haul roads and for movement of men and materials at the mining sites. Jobsites like quarries and industrial sites in remote areas generally do not have proper roads leading to the site. Here, motor graders create temporary roads leading up to the site to sustain daily operations and enable ease of transportation. Further, by building and maintaining haul roads which are constructed for heavy or bulk transfer of materials at the mining site, motor graders support maximum efficiency in mining operations. Apart from the above, motor graders perform various other tasks too at the mining site. Like certain graders with special attachments can be used for separate tasks like underground mining as well.
A brief look at the few other mining equipment…
1. Haul trucks: They are used for heavy dirt hauling jobs.
2. Dragline excavators: These machines are extensively used in surface mining. The larger types are used in strip-mining operations to move overburden above coal and for tar-sand mining.
3. Scrapers: They are large motorised machines used for digging, hauling and levelling out materials in a variety of mining jobs. Running on massive rubber tires, motorised scrapers quickly move large quantities of earth around a mining site.
4. Shovels: These machines are used for digging and loading earth or fragmented rock or for mineral extraction at any mining site.
A note on equipment used in the construction sector
A wide variety of equipment are used at construction sites to make the job easy, safe and quicker. Here again, motor graders and backhoe loaders are extensively used. While the most common uses of backhoe loaders are digging ditches, laying pipes, planting underground cables or laying the foundation for buildings and drainage systems, with few additional attachments, they can do much more. If an augur is attached to the backhoe, it can be used to drill holes for planting trees, signs and fencing projects in a variety of soil types. By joining a bucket for cleaning the ditch on the rear, grading and slope-cutting can be easily done with the backhoes. Asphalt cutter can be attached to the backhoe to repair roads, gas and sewer lines. Apart from the above, various others attachments are also available which can be easily attached to the backhoe loaders to perform some of the most difficult tasks at the jobsite such as grabbing objects, dozing or levelling the ground.
On the other hand, motor graders are also extensively used at the construction sites. They are used for setting the soil for construction, earthmoving, sacrifying, land grading, levelling of soil or land and mixing materials. Apart from this, graders can also be used for trenching, digging shallow holes, ditching and laying pipes.
Apart from the above, few other equipment that are used at the construction site include…
1. Bulldozers: They are powerful equipment which are largely employed for shifting huge amount of dirt on jobsites where there is wide open spaces, rough grading and grinding rocks.
2. Excavators: They are used for variety of applications like digging trenches, holes and foundations, material handling, general grading/landscaping etc.
3. Forklifts: A forklift truck comes with an attached prolonged platform that can be lowered to pick an object on or below the ground and raised to move the object.
4. Cranes: For movement or hoisting of materials at any road and construction site, the equipment that gets top-most priority is the crane.
Bright future prospects for MCE
Given the rapid industrialisation, mechanisation, urbanisation, growing infrastructure spends, increasing foreign investments and growing mining and road construction industry, the MCE industry is expected to grow considerably in the coming years. As per a report released by Indian Construction Equipment Manufacturers Association, “The Indian construction industry is expected to grow to $5 billion by 2019-2020.”
Anticipating this huge growth of MCE segment in the country, many equipment manufacturers in the country are coming up with new and upgraded equipment to cater to the increasing demand. Particularly, Mahindra Construction Equipment amongst the others is playing a definitive role in providing further boost to the MCE segment in the country. With its offerings i.e., Mahindra EarthMaster backhoe loaders and RoadMaster motor graders, the company is gearing up well to embrace the projected growth of MCE sector in the country with grace.
Road Network in India: National Highways, Projects, Government Initiatives
ural roads.
These roads bear more than 60 per cent of total goods traffic and 90 per cent passenger traffic in the country. Over the years, the road transportation sector has grown considerably due to improved connectivity between cities, towns and villages in the country and the government has played a major role in this.
The current market size of road network in India
Before talking about the various projects and investments planned by the government in the highway and roads development sector, it is necessary to look at the market size of road network in India. In the financial year 2017-2018, the construction of highways reached 9,829 kms and they were constructed at an average of 26.93 km per day. On the other hand, total length of roads constructed under Pradhan Mantri Gram Sadak Yojana (PMGSY) was 47,447 km in the financial year 2017-18.
Key national highway and road development projects
Here is a look at some of the major highway and road development projects that are planned by the government for the near future…
1. The government has set a target for construction of 10,000 km national highways in the financial year 2019.
2. Nearly 416 ongoing projects worth Rs 3.26 lakh crore are being implemented by the National Highway Authority of India (NHAI) and are in various stages of completion.
3. The biggest ever Highway Development Plan to construct 83,677 kms of roads at an investment of Rs 6.92 lakh crore by 2022 is approved and being implemented. It includes the Bharatmala Pariyojana which aims to build 66,100 km of economic corridors, border and coastal roads and expressways to boost the highway network in the country.
4. In August 2018, government approved highway projects worth Rs 2 billion (US$ 29.83 million) to improve connectivity among states such as Gujarat, Maharashtra, Rajasthan, Madhya Pradesh and Diu.
5. The government has planned development of 5,477 kms of national highways and state roads in 34 remote districts in states of Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha and Uttar Pradesh.
6. A total of 200,000 km national highways are expected to be completed by 2022.
7. The government is aiming to construct Golden Quadrilateral connecting four major metropolitan cities viz. Delhi-Mumbai- Chennai-Kolkata.
8. Government is also planning to upgrade 10,141 kms of roads in the North-East region through three-phased Special Accelerated Road Development Programme for North-East.
Apart from the above mentioned projects, there are many more national highways and rural roads projects in the pipeline and even the stalled old projects have been restarted by the government.
Key investment initiatives taken by the government
Some of the key government investments and developments in the Indian highway and roads sector are as follows:
1. Giving a huge push to the infrastructure sector, government allotted about $ 100 billion for infrastructure in the Union Budget 2018-19.
2. The budgetary allocation for National Highway Authority of India (NHAI) was increased by 10 per cent to Rs 916.63 billion for 2018-19.
3. In the Budget 2018-2019, rural roads saw an allocation of Rs 19,000 crore under PMGSY.
4. In May 2018, India signed a USD 500 million (Rs 3,371 crore) loan pact with World Bank to provide additional financing for PMGSY rural road projects to build 7,000 km of climate-resilient roads.
5. The government is planning to invest $ 22.4 billion towards road infrastructure in the North-East region during 2018-2020.
6. $ 82 billion will be invested by the government by 2022 under Bharatmala Pariyojana.
7. Government has decided to invest Rs 7 trillion (US$ 107.82 billion) for construction of new roads and highways over the next five years.
In addition to the above investments, through a series of initiatives, government is also continuously working on policies to attract significant investor interest. In line with this, government has allowed 100 per cent Foreign Direct Investment (FDI) in the road sector. This has lead to several foreign companies forming partnerships with Indian players to capitalise on the sectors growth. Furthermore, the government is also promoting Public-Private-Partnership (PPP) projects in road sector and their number has increased drastically over the years. All these plans and projects clearly prove that the development of roads and highways is one of the priority areas for the government.
Impact of the various road and highway development projects on road construction equipment segment
Given the priority of the government towards development of an excellent road infrastructure for the nation, it is believed that the road construction equipment sector has a very bright future ahead. Particularly, the construction of highways is expected to receive a huge boom in the coming years and this will have a huge impact on the construction equipment sector. This is because the Indian government is planning to build 18,637 kms of expressways by 2022. Also, as of now, only 24 per cent of national highway network in India is 4-lane and therefore there is immense scope for their development. This is definitely expected to increase the demand for road construction equipment. In fact, as per the TechSci Research report on India Roads & Highways Market by Type, Competition Forecast & Opportunities, 2011-2025, “The roads and highways sector is expected to exhibit a CAGR of 36.16 per cent during 2016-2025 on the back of growing government initiatives to improve transportation infrastructure in the country.”
While all equipment categories in the road construction equipment sector will see a boom, it is primarily the motor graders segment which is expected to grow considerably. This is because motor graders are highly versatile equipment and can be used to perform various jobs on a road construction site. At present, there are many companies which manufacture motor graders but the one which makes motor graders that are best suited for Indian roads is the indigenous motor grader manufacturer—Mahindra Construction Equipment (MCE). MCE’s offering RoadMaster G90 is best suited for small and medium roads, state highways and national highway expansion projects in the country. It can play a pivotal role in construction of roads and highway which connect each and every part of the country. So, if you are into road and highway construction business, then RoadMaster G90 can be your best bet.
Motor Graders for Earth and Gravel Road Maintenance
It is because most of the gravel and earth roads often deteriorate rapidly, especially in the wet season, disrupting mobility and transport services. Another problem associated with such roads is that they have a very short life as they often witness constant wear and erosion. Thus, it goes without saying that gravel roads require far more frequent maintenance than paved roads, especially after wet spells and when used by high traffic volumes or heavy commercial vehicles. Here comes the importance of maintenance of earth and gravel roads in India.
The road construction equipment that is best suited for construction and maintenance of earth and gravel roads is motor graders. If routine maintenance of such roads is carried out by motor graders, then they can help in keeping the road in good condition.
Here is a look at how motor graders can help in maintenance of earth and gravel roads…
1. Levelling and maintaining surface: The first step toward successfully maintaining the gravel and earth road is levelling and maintaining surface. For that, the following steps need to be followed:
a) The moldboard should be rotated so that the toe is on the right side of the grader at about 50 to 60 degree angle to the frame.
b) The blade should be pitched half way.
c) The blade should be made centre shift until the left lift cylinder is straight up and down.
d) The front wheels should be leaned to the left.
e) The moldboard should be lowered until the toe and heel slightly touch the ground.
f) The grader should be placed in motion and when the moldboard crosses the project start line, enough downward pressure should be applied on both the heel and the toe to penetrate the surface on a level plain about 1/2 inch.
g) A straight course should be maintained by adjusting the moldboard slightly to carry the material the length of the project.
h) The material should be feathered at the end of the pass.
i) The motor grader should be stopped and the front wheels should be straightened after the material is feathered to a smooth termination.
j) Both the cylinders should be raised all the way.
k) The grader should be positioned in a way so as to straddle the windrow just made and back the grader to the starting point while ensuring the windrow is between the wheels.
l) The grader should be stopped just outside of the project boundary line.
This process should be repeated till the entire area is levelled.
2. Grading: Reshaping of the travelling surface through removal of all potholes and/or washboards and the re-establishment of the crown of the unpaved road is called the grading process. Motor graders can perform the grading task easily by cutting the surface of the unpaved road to the bottom of the potholes and/or washboards and then spreading the material across the surface of the roadway.
3. Maintaining ditch drainage: The most important and common drainage feature needed on an earth and gravel road is the roadside ditch. The ditch must be cleaned if it becomes obstructed from eroded soil or debris and motor graders can be used to restore ditch drainage.
4. Restoring shoulder drainage: Motor grader’s mouldboard can easily help to recover loose material and move it back on the roadway to restore shoulder drainage.
5. Reshaping shoulder shape: Problems with surface and shoulder shape can also be corrected with the motor grader as they can cut the material and relay it to the proper shape and crown. Here, it is to be kept in mind that the operating speed of the motor grader must be kept low in order to ensure a good shaping job.
6. Eliminating high shoulders along the edges of the gravel roads: Motor graders equipped with shouldering disc attachment can even ease the process of eliminating high shoulders along the edges of gravel roads.
7. Adding stabilisation products into gravel roads: The task of adding stabilisation products or incorporating dust control agents into gravel roads can also be performed by motor graders. For that, motor graders loosen the surface, apply the product and then make many passes to mix the product prior to compacting and finishing the surface.
8. Reshaping of gravel roads and making the process easier, safer and faster: Generally recovered gravel, either from a high shoulder or a ditch, contains clumps of sod which definitely should be removed before the reuse of the gravel. Motor graders equipped with windrow pulverisers can quickly and effectively remove these clumps. This eliminates the need for the material to be moved back and forth multiple times to break up the sod.
Overall, earth and gravel roads can be maintained by routine blading process and adding gravel where necessary. However, prolonged wet weather conditions or very heavy traffic can make grading and shaping necessary at any time. In addition, significant rutting, loss of crown and deep ditches are the few circumstances that can necessitate more substantial repair work. In all the scenarios, motor graders with its variety of attachments can be most appropriately used for maintenance of earth and gravel roads in the country.
To sum up…
In a country like India where nearly 40 per cent roads are rural unpaved roads (gravel and earth), the importance of road maintenance cannot be undermined. This gives rise to the need of motor graders that can adopt to the Indian scenario and Mahindra Construction Equipment’s Mahindra RoadMaster G75 can vouch for this. RoadMaster G75 offers an affordable, un-compromised and mechanised grading solution for small and medium roads in India. It is an ideal grading machine for spreading and grading of earthwork in different types of roadwork across the nation. It is also best suited for the maintenance of earth and gravel roads in India.
India – The Best Place for Investing in Construction Equipment
In addition to this, rapid urbanisation, increasing foreign investments, growing mining industry and surging demand for customised equipment are few of the other major factors which are propelling the demand for CE in India.
As per a report released by Indian Construction Equipment Manufacturers Association (ICEMA), “The Indian construction industry is expected to grow to $5 billion by 2019-2020.” These numbers clearly prove that India is going to see a major CE revolution in the coming years and it is the right time for the interested parties to make an investment in CE in India.
A brief note on CE market in India
Before discussing in detail the projects, plans, factors and future that will make India the best place to make an investment in CE in the coming years, we need to first understand as to what constitutes the CE market. Typically, the CE sector in the country is made up of five main segments. These include earth moving equipment, road CE, concrete equipment, material handling equipment and material processing equipment. The earth moving equipment and road CE segment account for close to 70 per cent of Indias CE market. The concrete equipment is the second largest segment with a market share of approximately 14 per cent. Material handling equipment and material processing equipment segment account for 10 per cent and 6 per cent of the market respectively.
According to Sameer Bansal, Director, Off-Highway Research India, “CE sub-sectors such as earth moving, road construction and material handling equipment saw 36 per cent growth in 2016 and a further 17 per cent rise in 2017 with a new peak of 78,109 units. The sales of these equipment is expected to increase further by 8 per cent during 2020 and 2021 and by 6 per cent in 2022 to peak at 110,815 units.”
What makes India a lucrative destination for investing in CE in the present and future?
1. Growing infrastructure sector
Infrastructure sector which includes power, bridges, dams, ports, railways, roads, real estate and urban infrastructure is highly giving a boost to the CE industry in the country.
Particularly, it is the roads and highways sector in the current infrastructure development scenario which is expected to be the main growth driver for the CE industry followed by railways, irrigation and ports. This is because the budgetary allocation for National Highway Authority of India (NHAI) was increased by 10 per cent to Rs 916.63 billion in the 2018-19. Also, the government is aiming to develop the Golden Quadrilateral connecting four major metropolitan cities viz. Delhi-Mumbai- Chennai-Kolkata. Construction of North South and East West Corridors (NS-EW) connecting Srinagar to Kanyakumari and Silchar to Porbandar with a spur from Salem to Cochin is also on cards of the government. Government is also aiming at six laning of existing four-lane highways. Also, increased impetus is being given to the development and maintenance of rural roads under Pradhan Mantri Gram Sadak Yojana (PMGSY).
Apart from this, various other big ticket infrastructure projects have been announced by the government. These include Smart Cities Mission, Bharatmala Pariyojana, Sagarmala Programme for modernisation of ports, increasing connectivity and port linked industrial hubs, airport development and upgradation program, Jal Marg Vikas, Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Housing for All and Diamond Quadrilateral for high-speed railways, river linkages and bullet trains.
Even the rural infrastructure development has picked up the pace in the country. The government is looking to construct 3.17 lakh km of roads, 51 lakh new houses, 1.88 crore toilets and providing electricity connections to 1.75 crore new households in the year 2018-2019 in the rural areas. Obviously, all these projects and developments would demand CE and this will give an overall boost to the various CE sub-segments in the country in the present times as well as in future.
2. Growth in the construction activities
As per the report from ResearchAndMarkets.com, the CE market is expected to grow at a CAGR of 6.8 per cent during Financial Year 2018-Financial Year 2024 on account of the countrys expanding construction industry. It is also believed that by 2025, construction market in India will emerge as the third largest globally. This growth in the construction sector is supposed to have a direct impact on the CE sector as more and more CE would be needed to fulfil the needs of modern construction sites.
3. Increasing need for mechanisation
Till recently, construction activities in India used traditional methods which were slow and archaic. Now, gearing up to the new realities of timely project execution with a bonus clause for early completion, quality output, higher productivity, reliability and safety and various infrastructure projects on hand, the focus is shifting towards innovation, automation and advanced technologies. Today, there is an increasing need for modernised and mechanised methods of construction and thus, more and more CE with newer intelligent features like remote access devices, automatic controls and increased sophistication as against the manual labour are being demanded. It is believed that for every 0.5 per cent increase in mechanisation, the CE demand would rise by $30-35 billion.
To sum up
Looking at the above factors, it can be safely concluded that India among all the developing countries is growing as one of the best places to make investment in the CE sector. Given the fact that the country requires about $7 trillion infrastructure investment over the next seven years and for that the government has already started taking proactive steps, it is clear that this would impact the CE business greatly.
Anticipating the huge growth of CE segment in the country, many national and international CE manufacturers have started making their presence felt in the country. Particularly, Mahindra Construction Equipment (MCE) amongst the others is playing a definitive role in providing further boost to the CE segment in the country. With its offerings i.e., Mahindra EarthMaster backhoe loaders and RoadMaster motor graders, the company is gearing up well to embrace the projected growth of CE sector in the country with grace.
In future, looking at the unprecedented growth of CE sector, gradually, various other big CE manufacturers are expected to move aggressively into India so as to give their support in the country’s drive to build world-class infrastructure.
So, if you as a contractor or construction company owner are thinking about investing in CE in India, then definitely it is the right time and India is the best place for making an investment in the construction equipment sector.
Construction Project Management Processes: Everything You Need to Know
The various processes included in CPM that need to be performed by the CPM manager include:
1. Defining the project goals and plans which include outlining the scope of the project, scheduling, budgeting, deciding upon the requisites and choosing project participants.
2. Managing and employing the resources by the acquisition of workforce and necessary equipment.
3. In the execution stage, conducting numerous operations through coordinating and managing contracts, planning, estimations, designing and overlooking the whole procedure till the end.
4. Overlooking the performances and progress.
5. Efficiently communicating with everyone involved in the construction process and resolving any conflicts that may arise.
6. Taking the project to the closure.
The various stages of CPM
Below are the various stages in a construction project:
1. Design: Four things are considered in this stage. The first is the concept i.e., defining the goals and objectives of the project. This decision is taken on the basis of the size of the project, site etc. The next step involves identifying various parts, materials, colours, floorplan etc. Next is researching on the material and equipment to be used etc. Last is putting the contract document together.
2. Pre-construction: This stage involves identifying the contractor or contract administrator, project manager and field manager. The next thing in line is conducting the site examination, testing the soil and identifying any possible unexpected situation like any environmental challenge etc.
3. Procurement: Now that the people are in place, it is necessary to have the material and equipment in place. Depending on the size of the project, construction equipment can be either purchased or rented. For large projects, generally the equipment are purchased but if the project is small, then generally construction equipment are taken on rent.
4. Construction: In this stage, the team starts the construction project completing activities like setting up temporary storage facilities, securing the site, developing a materials and handling plan, establishing safety programs and more.
5. Project closeout: This is the final stage where all the pending tasks are completed and the project is officially declared to be closed.
Thus, overall, managing a construction project involves many complex tasks including managing people, equipment, schedules and finances. Of all the tasks, managing and procuring the right equipment for the construction task assumes much more importance. This is because the completion of construction projects highly depend on the equipment which is used. If the equipment is old and with obsolete technology, then you may not get the desired construction quality and there can be even delays in project completion.
Importance of equipment procurement in CPM
The selection of the appropriate type and size of construction equipment often affects the required amount of time and effort to complete the construction project. Hence, in CPM, equipment procurement process assumes very much importance.
For equipment procuring, the things that the CPM manager should keep in mind include…
1. Size of the job: Large jobsites with heavy load of work will require large equipment and that too in large numbers. In case, if the size of the job is small, few equipment can do the task easily.
2. Activity time constraints: In cases when the construction projects need to be completed in the shortest possible time, there would be need for more equipment. If there is good time at hand, then work can be completed with few equipment only.
3. Productivity of the equipment: If the equipment is old and not technologically-updated, then it may not give good results.
4. Cost of transporting the equipment: If the equipment has to be transported from a distant location, then it can add up to the overall cost.
5. Soil characteristics, terrain and environment: Depending on the three mentioned factors, the equipment will have to be chosen. Not all equipment are meant for all types of soil, terrain and environment and they can give different results than what is expected.
Apart from the above, the CPM managers also need to consider the point that whether they should buy or rent the equipment. There are pros and cons to each of the approach and the CPM managers are required to make their choice on a case-to-case basis. Making the right choice between renting and buying Construction Equipment can save good deal of money over time. Majorly, purchasing construction equipment can be a good decision:
1. When the project is very large and will take some good number of years to complete. In such a case, if the equipment is purchased, then it can give good ROI in the long run.
2. When the CPM managers don’t want to make huge initial investment at the beginning of the project.
On the hand, renting can be a good option when it is a short-term project and arranging capital for purchasing a new equipment and its maintenance and equipment storage is a major challenge.
Overall, CPM managers need to weigh all the pros and cons of both the approaches carefully as this decision can highly affect the overall cost of the construction project.
In a nutshell
Putting a construction project together is a really challenging task. There are various different parameters and elements that should be exhaustively analysed. Particularly, in CPM processes, equipment and material procurement process is a daunting task and CPM managers have to exercise all their caution in making the right decision.
Connecting the country: Road Infrastructure- Make in India: Mahindra RoadMaster G90
Especially in a country like India with huge population and vast area, road infrastructure assumes very much importance. Typically, the Indian road network which is globally the 2nd largest spanning 5.5 million kilometres (kms), comprising of national highways, expressways, state highways, major district roads, other district roads and village roads bear more than 60 per cent of total goods traffic and 90 per cent passenger traffic in the country. This road network plays a crucial role in providing employment, better access to services, ease of transportation and freedom of movement to people, alleviating poverty and giving an overall boost to the economy of the country. However, the primary role that the roads play is connecting the country.
Knowing that roads play a pivotal role in connecting the country, Indian road infrastructure has seen consistent improvement in the last few years. This is because the Indian government is increasingly focussing on building quality roads and highways across the country. The year 2015-2016 saw more than 6,061 kms of highway construction. In the year 2016-2017, 8,231 kms of national highways were constructed. Further, the construction of highways reached 9,829 kms during financial year 2017-2018 and they were constructed at an average of 26.93 kms per day. On the other hand, total length of rural roads constructed under Pradhan Mantri Gram Sadak Yojana (PMGSY) was 47,447 kms in the financial year 2017-18. As for the Budget 2018-2019, then this also spelt optimism for the roads and highways sector with huge investment being planned.
Here is the list of major road infrastructure development initiatives planned by the government for connecting the country well…
1. Highway development projects
- The seven-phased National Highway Development Project is implemented by the National Highways Authority of India (NHAI) with a total estimated expenditure of USD 92 billion.
- For the year 2018-19, the construction target of NHAI projects has been revised from 5058 km to 6000 km.
- A total of 200,000 km national highways are expected to be completed by 2022.
- The government is aiming to construct Golden Quadrilateral connecting four major metropolitan cities viz. Delhi-Mumbai- Chennai-Kolkata.
- There are plans to connect major ports of the country to national highways.
- Four and six-laning of existing national highways is being planned.
- The biggest ever Highway Development Plan to construct 83,677 kms of roads by 2022 was approved in 2017. It included the Bharatmala Pariyojana for providing connectivity to interior and backward areas and borders of the country and includes development of highways running through economic corridors, border and coastal areas and expressways. Bharatmala is expected to grant India 50 national corridors as opposed to the six right now. Further, the project would be connecting 550 districts in the country through the national highway linkages against the existing number of 300.
2. Road developing projects in challenging terrains
Given the fact that roads in the hilly areas are strategically significant due to their proximity with international borders and defence establishments, Ministry of Road Transport and Highways (MORTH) has been keenly taking up the road development projects in such areas. Further, the government is looking to improve road connectivity to coastal/border areas, backward areas, religious places, tourist places and construction/rehabilitation/widening of major bridges among others.
3. Special road development projects for the North-East
Prioritising the task of improving road infrastructure in the North-East, government is planning to upgrade 10,141 kms of roads in the region through three-phased Special Accelerated Road Development Programme for North-East which aims to improve road connectivity in all district headquarters in the North-Eastern region. Phase A of the project includes upgradation of 4,099 kms of road by March 2021. In Phase B, 3,723 kms of road stretch has been approved. The third phase is the Arunachal Pradesh Package of Roads and Highways under which construction of 2319 kms road has been approved. Further, the government is also implementing another project which connects Kolkata and Sittwe Port in Myanmar.
4. Road development projects in remote areas in Central/Eastern India:
The government has planned development of 5,477 kms of national highways and state roads in 34 remote districts in states of Andhra Pradesh, Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha and Uttar Pradesh.
5. Rural road Development projects: Realising the fact that rural roads can promote access to economic and social services, generate increased agricultural incomes and productive employment opportunities and reduce poverty in the country, PMGSY was launched by the government in the year 2000. The main aim of the program is to provide connectivity to unconnected 65000 habitations through construction of all-weather roads. Earlier this year, government preponed the first phase of PMGSY from 2022 to 2019.
Impact of the various road development projects on road construction equipment segment
Given the priority of the government towards development of an excellent road infrastructure for the nation, it is believed that the road construction equipment sector has a very bright future ahead. In the road construction equipment sector too, it is the motor graders segment which is expected to see a huge boom because they are highly versatile equipment and can be used to perform various jobs on a road construction site. However, at present there are not many indigenous motor graders available in the country that are best suited for the Indian needs. In fact, most motor graders found in the market are manufactured by international companies and they are large and very expensive and this puts a restriction on their usage. Here comes into the picture the indigenous motor grader manufacturer— Mahindra Construction Equipment’s (MCE) offering RoadMaster G90 which is best suited for Indian roads including small and medium roads, state highways and national highway expansion projects.
The Mahindra RoadMaster G90 is an ideal grading machine for spreading, grading of earthwork in different types of roadwork across the nation, in addition to being used for railway and ground levelling operations across sectors. It is designed to provide an optimal output at affordable cost with its simple yet rugged design. Overall, the RoadMaster G90 can be best summed up as made in India for the Indian roads. It can play a pivotal role in construction of roads which connect each and every part of the country.
Mahindra RoadMaster G90: The Backbone of Infra Projects in India
It is for the same reason that the government has been taking proactive steps in giving a boost to the infrastructure segment in the country. Mentioning yet another step in this direction, the government has made an all-time high allocation to infrastructure sector in the Budget 2018-2019. Nearly, Rs 5.97 lakh crore have been allocated to the infrastructure sector which includes power, bridges, dams, ports, railways, roads, real estate and urban infrastructure development.
Here is a brief look at some of the steps taken by the government to boost the overall infrastructure sector of the country, which can have a huge impact on the construction and Construction Equipment (CE) industry as well…
1. Smart Cities Program: The government has announced to invest Rs 2.05 lakh crore in the smart cities mission. All 100 cities have been selected as of June 2018.
2. ‘Housing for All by 2022’ scheme and affordable housing development: Under this scheme, the government is aiming to develop about 11 crore houses. In the Budget 2018-2019, the government stated that 3.7 million homes will be built in urban areas and 5.1 million homes in rural areas. Further, in May 2018, construction of additional 150,000 affordable houses was sanctioned under Pradhan Mantri Awas Yojana (PMAY), Urban.
3. Development of urban and rural roads: In October 2017, the Indian government approved the biggest ever Highway Development Plan for 83,677 kms of roads at an investment of Rs 6.92 lakh crore by 2022. It includes the Bharatmala Pariyojana with an estimated cost of Rs 5.35 lakh crore. The Bharatmala Project includes development of highways running through economic corridors, border and coastal areas and expressways. Moving further, the budgetary allocation for National Highway Authority of India (NHAI) was increased by 10 per cent to Rs 916.63 billion for 2018-2019. Additionally, government is aiming to develop the Golden Quadrilateral connecting four major metropolitan cities viz. Delhi-Mumbai- Chennai-Kolkata. North South and East West Corridors (NS-EW) connecting Srinagar to Kanyakumari and Silchar to Porbandar with a spur from Salem to Cochin. Government is also aiming at six laning of existing four-lane highways. Further, in the Budget 2018-2019, rural roads saw an allocation of Rs 19,000 crore under Pradhan Mantri Gram Sadak Yojana (PMGSY).
4. Rural infrastructure development: The government has announced to spend Rs 14.34 lakh crore in the rural areas in the year 2018-2019. This includes construction of 3.17 lakh km of roads, 51 lakh new houses, 1.88 crore toilets and providing electricity connections to 1.75 crore new households. Further, the allocation for rural housing scheme PMGAY (Gramin) is made Rs 21,000 crore for the year 2018-2019.
5. Rail infrastructure development: Railways has received the highest ever budgetary allocation of Rs 1.48 trillion in the Budget 2018-2019. Apart from network expansion and decongestion, government is also focusing on investments on station redevelopment and high speed elevated corridor implying a huge opportunity of growth for railways infrastructure development.
6. Airport infrastructure development: In order to give a boost to the airport infrastructure, the government is aiming to add 80 new airports under the UDAN Scheme.
The above mentioned steps are surely expected to give the infrastructure, construction and CE sector of the country a major boost. Typically, with the growing infrastructure projects in the country and new approach to execute the projects timely and without major defects and hassles, the CE industry including the road CE is expected to see a major boom in the country.
Impact of infrastructure development on road CE demand
It goes without saying that India is spending huge amount on road, railway and airport and building construction projects across the length and breadth of the country. There are many national highways and rural roads projects in the pipeline and even the stalled old projects have been restarted by the government. This is definitely expected to increase the demand for road CE and it would not be wrong to say that road CE form the backbone of infrastructure projects in the country.
There a number of equipment that are included in the road CE category. However, one equipment that tops the list is the motor grader as it is a highly versatile equipment and can be used to perform various jobs like setting the soil, earthmoving, scarifying, land grading, levelling of soil or land, mixing materials etc. While there are many companies which manufacture motor graders but the one which makes motor graders that are best suited for Indian roads is the indigenous motor grader manufacturer—Mahindra Construction Equipment (MCE).
Mahindra RoadMaster G90: Backbone of infra projects in the country
Earlier, the company offered Mahindra RoadMaster G75 which was best suited for rural or small and medium roads but now it has added another variant in the motor grader category which is the RoadMaster G90.
In the scenario where in the near future many small and medium roads would be constructed and the existing ones would be upgraded to state highways and national highways soon in the country, there is a need for motor graders which are best suited for the Indian needs. At present, there are many large and expensive motor graders from international companies available but they are not suited for Indian roads and here comes the RoadMaster G90 into picture which is an optimal solution for the intermediary operations. It is an ideal grading machine for spreading, grading of earthwork in different types of roadwork across the nation, in addition to being used for railway and ground levelling operations across sectors. It is designed to provide an optimal output at affordable cost with its simple yet rugged design.
Overall, the RoadMaster G90 is created to offer an affordable, un-compromised and mechanised grading solution for small and medium roads in India. Thus, definitely RoadMaster G90 can prove to be the backbone of infrastructure projects in India especially in the scenario where India’s infrastructure spending will accelerate to at least Rs 50 lakh crore between FY18 and FY22, as per Crisil, which means more and more infrastructure projects will be launched in the near future.
Motor Graders Play a Critical Role in the Aggregates Industry
Aggregates are used for various applications like raw materials for site mix and ready-mix concrete, sub-base for road projects and are available in various sizes from 6 mm to 60 mm. The average usage of aggregates depends on project to project since the specification of each project is different. Typically, if we look at the Indian scenario, then for a two-lane national highway (asphalt), 6,800-7,500 cu m of crushed aggregates is required.
Market scenario of aggregates industry in India
At a time when there is increased importance given to road construction and maintenance projects in India, the aggregates industry is expected to see a boom. As per the facts, during the past few years, per capita consumption of aggregates in the country has increased by leaps and bounds. Currently, the overall construction aggregates demand in the country is estimated to be around 4,500-5,000 million tonne. Crushed stone aggregates is estimated at 40-45 per cent of the overall construction aggregates used.
As per a National Highway Authority of India survey report, the aggregate production is expected to grow from 1,010 million metric tonne (mmt) in 2000 to an estimated 5,075 mmt in 2020. This will mean more demand for aggregates and thereby quarry operations from where the aggregates are majorly derived.
It is generally seen that delivering high quality aggregates to the construction industry is a great challenge and is the foundation of all infrastructure progress. Here comes the importance of motor graders.
Motor grader’s role in the aggregates industry
A motor grader may seem like just another piece of equipment, but it is very critical to the entire aggregates operation. Typically, motor graders can be used to establish a rough grade, produce a precise finished grade, spread stone, mix aggregate and other materials on a new road.
With the ripper teeth, motor graders can break hard aggregates and carry them from the quarry to the place where they are needed. Then at the aggregate mining sites, they can be used for construction of haul roads. Motor graders have an essential role in haul road construction and maintenance, blasting cleanup, loading area cleanup and reclamation. Also, on the haul roads, motor graders help in creating and maintaining constant grade and proper drainage.
Moving to the road construction sites, then there motor graders can be used for blading aggregate surfaced roads. They can be used for the levelling of soil or land so that the new or next layers of soil, gravel aggregates and asphalt or bitumen can be spread uniformly throughout. Further, generally recovered gravel, either from a high shoulder or a ditch, contains clumps of sod which definitely should be removed before the reuse of the gravel. Motor graders equipped with windrow pulverisers can quickly and effectively remove these clumps. This eliminates the need for the material to be moved back and forth multiple times to break up the sod.
Simply put, motor graders can perform the grading task easily by cutting the surface of the unpaved road to the bottom of the potholes and/or washboards and then spreading the material across the surface of the roadway.
Mahindra RoadMaster G75 produces best-in-class aggregates
Mahindra Construction Equipment’s RoadMaster G75 is made in India for the Indian roads. The RoadMaster G75 is created to offer an affordable, un-compromised and mechanised grading solution for small and medium roads in India. It is an ideal grading machine for spreading and grading of earthwork in different types of roadwork across the nation. It possesses various unique features and promises best-in-class aggregates. Read on to know why RoadMaster G75 claims this…
1. RoadMaster G75 is equipped with 3000 mm mouldboard that comes with an option of having its size reduced by 400 mm. Depending on the requirement the blade size can be reduced by 200 mm on both sides. The cutting edge of the blade is in four separate pieces for ease of handling and replacement and has a lasting life of about 600 hrs on standard operation cycle. It is convenient, affordable and any blade part can be easily replaced in case of damage.
2. The equipment offers full blade visibility from operator station for superior grade finish.
3. RoadMaster G75 possesses the 5 tine ripper teeth attachment that is mounted at the rear of the motor grader and is perfect for breaking hard packed aggregates like asphalt. The design of the ripper teeth attachment allows for the ripping across the working range to be consistent. The design of ripper teeth tines also provides for easy penetration while prolonging the life of the tine tip. The attachment keeps the ripping depth, material break and mixing of aggregates consistent due to its robust design.
To sum up…
Considering the amount of infrastructure development activities anticipated in the coming years, market for aggregates will remain positive and the industry will grow at a very fast pace. This growing aggregates demand will put more pressure on quarrying as the need of the hour would be producing aggregates in larger quantities with the required quality to meet the escalating demand from the road construction sector. And given the fact that motor graders play a critical role in the aggregates industry, the segment is touted to see a sharp rise without fail in the years to come.