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Having witnessed slowdown in last three years, the Indian construction equipment manufacturers are bullish and hopeful to see some movement from the Q3 of the current fiscal year.
In an interview with Vijay C Roy, Amit Gossain, outgoing president, Indian Construction Equipment Manufacturers Association (ICEMA) and executive vice-president, JCB India said the need of the hour is to ensure ground implementation and active monitoring of these reforms.
How has been the demand for construction equipment in the last couple of years? What was the growth in 2014-15 and 2013-14?
The total size of the construction equipment industry is around 65,000 units per year. According to the AT Kearney report released during the Excon 2013, the total turnover of the Indian Construction equipment industry is pegged at about $3 billion.
Many global companies have entered the market and established their facilities. The last three years, however, have been a period of decline in the infrastructure sector due to various reasons like delay in project execution. They have been challenging for the industry but we have seen a strong intent from the government towards infrastructural development.
The Union government is putting so much thrust on infrastructure sector, so how do you foresee the future for the equipment manufacturers?
The long-term prospects of the construction equipment industry are certainly strong. In the past one year, the Government has taken decisive steps towards comprehensive structural reforms. Focusing on reforms and programme, we have seen some notable work being done –like FDI in insurance and defence, opening up of the mining and coal sectors.
The government has also charted a roadmap for the industry through its bold economic reforms and programme. Today, we have around 40 global and domestic original equipment manufacturer who have set up their own manufacturing base in India with the aim of meeting the equipment demand in the coming years.
The thrust to make India a global manufacturing hub can certainly be seen through some of the few transformational initiatives – like Make in India, Swachh Bharat and smart cities. The $1.2-billion smart city initiative is one of the ambitious projects of the government which, once implemented, will be a boost for the Indian infrastructure sector.
In an interview with Vijay C Roy, Amit Gossain, outgoing president, Indian Construction Equipment Manufacturers Association (ICEMA) and executive vice-president, JCB India said the need of the hour is to ensure ground implementation and active monitoring of these reforms.
How has been the demand for construction equipment in the last couple of years? What was the growth in 2014-15 and 2013-14?
The total size of the construction equipment industry is around 65,000 units per year. According to the AT Kearney report released during the Excon 2013, the total turnover of the Indian Construction equipment industry is pegged at about $3 billion.
Many global companies have entered the market and established their facilities. The last three years, however, have been a period of decline in the infrastructure sector due to various reasons like delay in project execution. They have been challenging for the industry but we have seen a strong intent from the government towards infrastructural development.
The Union government is putting so much thrust on infrastructure sector, so how do you foresee the future for the equipment manufacturers?
The long-term prospects of the construction equipment industry are certainly strong. In the past one year, the Government has taken decisive steps towards comprehensive structural reforms. Focusing on reforms and programme, we have seen some notable work being done –like FDI in insurance and defence, opening up of the mining and coal sectors.
The government has also charted a roadmap for the industry through its bold economic reforms and programme. Today, we have around 40 global and domestic original equipment manufacturer who have set up their own manufacturing base in India with the aim of meeting the equipment demand in the coming years.
The thrust to make India a global manufacturing hub can certainly be seen through some of the few transformational initiatives – like Make in India, Swachh Bharat and smart cities. The $1.2-billion smart city initiative is one of the ambitious projects of the government which, once implemented, will be a boost for the Indian infrastructure sector.
What is the latest trend being witnessed by this sector? Are the manufacturers still relying on indigenous technology or they are coming forward to have foreign collaboration?
The design and technology in India is at par with that of the developed markets. Manufacturers focus on product indigenization as it helps them develop and manufacture India-centric, cost-competitive offerings with frugal designs tailored to domestic needs. Today, OEMs are focusing on setting up their R&D centers to drive indigenous technology.
What are the problems that are proving stumbling block in the growth of this sector?What should be done to give a boost to this sector?
The Indian Construction Equipment industry has seen a decline in the demand due to the overall slowdown in the Indian Infrastructure industry. Though our government has introduced various programs to accelerate growth and we have seen some growth in the Roads and Highways sector however, the need of the hour is to ensure on the ground implementation and active monitoring of these reforms.
As an industry, we are hopeful to see some movement from the Q3 of the current fiscal year. Other than that, the industry has a challenge of lack of skilled manpower especially of trained machine operators.
We believe once the growth picks up, this will be one of the vital areas to ensure infrastructure development. The Government is working towards bridging this gap through launching several initiatives since past one year however; a lot needs to be done.
Recently, Infrastructure Equipment Skill Council (IESC) has been set up through National Skill Development Council (NSDC) which will aim at creating an eco-system for quality training and up skilling of people especially the machines operators. Many OEMs such as JCB India have set up their own Operator Training Centers across India to train manpower and create employment.
As per the report "Re-scripting the Growth story" released by Infrastructure Equipment Skill Council (IESC), it is expected that by 2023, manpower demand would be in excess of 2 million trained Operators and Maintenance personnel hence, it is imperative for the Government and the industry to focus on skilling manpower.
