Elevators: Expanding Horizons

unprecedented growth, the demand for elevators has also risen

sharply. After having witnessed a stagnant market situation

during the late eighties and early nineties, elevator produc-

tion and sales have increased sharply in the last couple of

years. Now the annual growth rate stands at 15 % every year.

The sharp rise in the real estate price, a boost in construction

fuelled by a host of new quality conscious buyers have led to a

quantum jump in elevator sales. The shift albeit gradual is

towards high tech and safe elevators. The increased demand from

the hotel industry has also escalated the hitherto small

 

elevator industry.

Most industry players are bullish about long term growth

notwithstanding the recent fund squeeze in the market. Given

the com- paratively small size of the market of around 4000

elevators a year vis a vis other devel- oping countries, 15,000

in South Korea ad 30, 000 in China, even with a faster growth

rate of around 15 % in India would double to only 8000 or so

after four to five years. However close industry sources how

greater optimism. As a result of liberalisation of the economy

the industry has opened its doors to competition. And also with

the entry of multinational players the industry is expect- ed

to get a quantum jump in the coming years.

The elevator industry has a high level of consolidation. The

organised sector accounts for about 80 % of the market allowing

the small players to be present only in the loaer end of the

market. Otis Elevators, Bharat Bijlee, ECE, UT sand Kone are

the major players in the industry.

Otis elevators in its 43 year of existence in India is the

largest player in the Indian elevator industry with about 60 %

market share and a country wide network. It also heads the

escalator business with an almost 100 % share of the market.

With increasing urbanisation the company is ideally placed to

tap the potential growth in elevator demand in the wake of ihe

boom in the economy.

With the state of the art technology from LM Lift, Munich,

Germany, UT Ascent Hydraulic Elevators is the market leader

with almost 100 % share in the hydraulic ele- vator market. UT

Ascent for the first time in India offers unrivalled

flexibility of installa- tion to commercial complexes,

residential apartments, shopping malls, farm houses and

industrial units.

The ECE elevator is one of the most widely used elevators in

the country. Today it is the product of experience with

performance of elevators in Indian operating conditions over the

decades and the adoption of state of the art of technology from

Toshiba Corporation of Japan, Beringer Hydraulic, AG of

Switzerland.

Now almost all the major international players have presence in

India. Schindler has a presence through Bharat Bijlee, Kone has

an 100 % subsidiary and Thoshiba of Japan has technical alliance

with ECE. Apart from these Hyundai from South Korea has entered

into a joint venture with Kinetic engineering of Pune to

manufacture elevators, escalators and automatic car parking

systems.

Mitsubishi of Japan has been in news after winning the high

profile Rs 130 million order for 48 elevators to be installed in

the diamond exchange in Mumbai,

In terms of products the elevator market has historically been

segmented into single speed, two speed, hydraulic, servo driven

and gearless segments. Single speed, col- lapsible gate

elevators currently accounts for 55% of the elevator market. But

after the Bureau Of Indian Standards representation to the

government, the government of India has decided to remove this

segment in a phased manner. The middle segment of the market

consists of two speed elevators and hydraulic elevators,

accounting to about 25 % of the market. These elevators are

technologically more sophisticated and unorganised sector has no

presence in this segment. Servo driven and gearless models

constitute the top end of the market. These elevators are

primarily used in high rise buildings lik e commercial estates

and hotels.

Historically demand for elevators have been concentrated in large

cities. In the past, on a conservative estimate 90 % of the ele-

vator demand came from the five big cities, Mumbai, Delhi,

Calcutta, Madras and Bangalore. Mumbai with its large number of

high rise buildings and a strong construction industry alone

accounted for 25-30% of the domestic annual demand.

Now the market is moving towards more sophisticated elevator

systems, a clear shift from low to high tech products. The

product introduction such as VF systems bring the Indian

elevator industry technology closer to the market across the

world. To provide safety to users the Bureau Of Indian standards

has recently decided to ban the use of colapsible bate elevator

in phased manner. This will replace the present collapsible

gate ele- vators that consist of about 50 % of the total

market. With this new and healthy development the small sector

is expected to loose their ground in the coming years.

This shift will also provide the industry an increased service

income, a very important factor for the economics of the elevator

industry. Apart from generating a sizeable chunk of the revenue

it is a major contributing factor to the bottom line, offering

higher margins than on new equipment sales.

The escalator market unlike the elevator market has not yet

shown signs of exponeotial growth. Although the modem escalator

is a common and well-accepted part of everyday lives of the

western world, it has yet to gain the same status in India.

Price is probably the prohibitive factor. The other factor is

that the architects in India have not yet been given the

opportunity to design and build modern structures.