India is home to many small scale operators in the construction and construction equipment business. In the past the construction equipment have always been specialised equipment best fit for a certain job. For small operators, it also meant that they would be restricted in the kind of jobs that they could take up. The eventual outcome being that the organisations took a much longer time to expand due to the the heavy investment required for procurement and maintenance of the new machines. The advent of multifunctional machines have brought about a drastic change in the said scenario.

Over the years OEM’s have started realising that creating bulky specialised machines are no longer a viable option if they have to keep their market share. The buyers have become more educated and demanding. Keeping in sync with the trend, the machines have started becoming multifunctional. The best example being the backhoe loader.

The backhoe loader in its basic configuration can be use for excavating, material handling, re-filling, asphalt breaking etc. Now, the OEM’s have come up with an assortment of attachments that help the backhoe become an all in one machine. The dozer blade attachment can instantly transform the loader into a full power bull dozer at less than 20% of the cost of a new machine. Similarly one can use the various attachments to transform the backhoe loader into a crane, an auger, a paver and an excavator etc.

Lets take a look into why multifunctional equipments have proven to be a boon to small scale operators.

1. Cost Reduction: Multifunctional equipments mean a one time spend for a single machine that does the job of multiple machines at much lower expenses. At the cost of a single machine now, the owners can take up various diversified jobs and make the most of the machines. A machine working at full capacity for maximum number of hours means that the owner makes both break even and profits at a much faster rate. Usually a basic construction site for housing would require different machines for excavating, material handling and refilling. A backhoe with its various attachments can do all three tasks single handedly at barely 20% of the cost.

2. Cost saving: Having a single multifunction machine means that costs are saved on storage and maintenance. Additionally it also means that the fuel expenses are saved since only a single machine is being put to use instead of multiple ones. The same logic applies to repair of a single machine and attachments. Buying attachments is much cheaper as compared to the whole machines. Big money is saved on the insurance of the machine too since only one machine has to be insured instead.

3. Faster Expansion: Back when machines were specific to certain jobs, the work for a contractor was also restricted. Now that the single machine can do multiple tasks, the same equipment contractor can take up additional work at the same site. Increased work eventually amounts to the owner expanding at a faster rate and entering the organised sector. The expansion that would have in the past taken 5-10 years can now happen in a much lesser period of time making it a lucrative investment option.

4. Edge over larger competitors: Having multifunctional machines means that a single operator has a better opportunity to take various multiple small jobs that the larger companies shy away from. Additionally, it also creates opportunity for smaller companies to work for the larger ones on a contract basis. The actual work for the larger projects eventually shifts to the smaller contractors, making it a win win situation for everybody involved.

5. Shifting to the organised sector: Most of the construction equipment sector apart from OEM’s and their outlets is an unorganised sector, which doesnt contribute to the national economy. As the small scale operators ride the tide of expansion standing on the back of multifunctional equipment, they will eventually need to shift to the organised sector to continue growing in the industry.

6. Increased investment: As the small players expand and become a part of the organised sector, they become a very lucrative investment option for investors. With the government pushing infrastructure projects, the small scale operators are bound to make their moolah given the required investment is available.

Small scale operations will grow to medium and large scale operations at a much faster rate all the while filling the gap that large scale players have traditionally shied away from. The expansion of these small scale operations will additionally lead to a growing market for heavy machinery training schools, increased equipment rental penetration across the country and creation of jobs in the industry. Multifunction equipments are quite literally paving the path for small scale operators to eventually become large scale operators in the industry.