JCB expects machinery demand to pick up from October

Construction equipment maker JCB India expects demand to pick up after October on the back of government initiatives to boost the infrastructure sector.
The company, which today forayed into the diesel genset segment in the Indian market, is hopeful of the construction machinery industry seeing a turnaround after witnessing decline in sales for the last three years.
"We expect a buoyancy for the industry from October this year when the things should start moving. After the Budget we are expecting between March and June, government would invite bids and contracts would be issued. Then it takes them 3-4 months to mobilise the resources," JCB India Managing Director and CEO Vipin Sondhi said.

He said the infrastructure sector is expected to witness a lot of activities after the government's announcement of an investment of Rs 70,000 crore in the Budget.
Besides, setting up of National Investment and Infrastructure Fund with Rs 20,000 crore will also help in creating demand, he added.
"At the moment expectation on the ground is that it should start moving...The positive part is that lots of movements have happened in terms of removing bottlenecks," Sondhi added.

The company, which had a turnover of Rs 5,000 crore, is expecting the demand of construction machinery to pick up after government starts tendering for new infra projects for highways, airports and ports.

On its foray into diesel genset segment in the range of 63 to 100 KV, he said there is a lot of potential to tap into the Indian market which is growing between 8 to 10 per cent annually.
JCB India had been manufacturing the gensets in India for exports from 2013 and will now focus on the domestic market too. It has a present capacity to manufacture 2,000 gensets every year.
"Last year we have manufactured 500 gensets and this year we are targeting 1,500 units, including exports and domestic sales," Sondhi said.
JCB is already exporting its gensets to 30 markets of Europe, South America, Africa and South East Asia.

On the company's investments, he said: "We have invested in India in downturns anticipating a demand in future. Two new plants has been added in Jaipur. We have created capacity with expectations that infrastructure would get impetus."
According to Sondhi, JCB has a cumulative investment of Rs 2,000 crore till now here. It has five plants and is presently exporting to over 50 countries from here.