Sunday, December 17, 2017

Curtain Raiser Excon 2017

Revving up on the Starting Grid

 

As India’s trillion dollar infra juggernaut rolls on picking up traction since last year, construction equipment OEMs across the spectrum look forward to beginning of a business up-cycle for India’s construction sector at South Asia’s biggest construction equipment trade fair EXCON 2017, scheduled next month. Major equipment OEMs are lining up their machines at this show, where ECE segment takes pole position having clocked a double digit growth in 2016, and other segments will also rev up soon. Satish P Chavan reports.

 

A fast track roll out of mega projects in the infra sector, and major initiatives in the urban infra space comprising urban transport and metro rail since a year ago, has turned India’s construction and earthmoving equipment market buoyant. As the government launches major initiatives, the Planning Commission has projected India's Infrastructure spending to be in the range of $ 1 trillion for the 12th plan ( 2012-17). The signs of buoyancy emerged since last year in 2016, when India’s earth moving and construction equipment market (ECE) market surpassed the previous record high of 72,492 machine sales sold in 2011. According to available data, construction equipment sales in India is projected to grow by over 10 per cent this year, continuing the momentum of the +36 per cent surge seen in 2016. Infrastructure investments are among the main growth drivers of the construction equipment industry. India’s Niti Ayog estimates total infrastructure spending of about $1 trillion during the 12th Plan (2012-17) period. Based on these estimates, there has been a concomitant rise in demand for construction equipment across product verticals since last year. Going forward this buoyancy in demand is expected to continue, and the next shopping venue for both Buyers and Sellers in the construction sector is going to be EXCON 2017 AT Bengaluru.

 

GLOBAL CONFLUENCE

In its 9th Edition this year, over the years EXCON has acquired an international character with countries and major companies across the global flocking to the fair in ever increasing numbers. This year it will have over 12 country pavilions including; China, Finland, Germany, Hongkong, Italy, South Korea, Sweden, Taiwan, Turkey, United Kingdom, and the USA, etc. Apart from these country pavilions which represent their governments and respective industry and trade associations, major global companies from these countries have been participating increasingly in this trade fair. Consequently these countries and their global players have been imparting an international global dimension to this trade fair.

Exhibitor profiles comprise equipment manufacturers across product verticals are participants, which include: aggregate equipment; asphalt equipment; attachments/compactors; components and accessories; compressors and generators; concreting and concrete making equipment; construction equipment and construction work drill; power tools; earth moving equipments; electronics, controls, and instrumentation; engines and power trains; hydraulics and pneumatics; information technology; material handling equipment; piling equipment; pumps; rollers; equipment lease-financing and equipment rentals; spare parts and consumables, etc.

Visitors include: Contractors; Government Officials; Public sector companies; Equipment Dealers and Distributors; Construction Companies; Equipment Rental Companies; Project Developers; Urban Infrastructure Developers; International Visitors; Investors in Construction; Buyers of construction equipments and technologies; Suppliers of components and aggregates (who use India as a Equipment and component sourcing base).

 

Robust demand across Verticals

EXCON trade fair has always been an accurate barometer for market sentiments across product vertical ranging from construction to mining to infra sectors. This time around at EXCON 2017, buyer sentiment seems to be robust across most of these equipment verticals.

Earth moving and Construction Equipment (ECE) industry in India is expected to grow +20 per cent this year to 58,465 machines, according to Off-Highway Research. The specialist consultant and market forecasting study said sales of construction equipment grew +37 per cent in the first six months of the year, compared to the same period in 2015. The market has seen a turnaround over the last 18 months, with sales falling to a low of 47,889 units in 2014, before enjoying a small increase last year. The expected +20 per cent surge in demand in 2016 is the result of infrastructure investment in India, and this is expected to sustain market growth for the next four years, albeit at more sustainable levels.

Off-highway Equipment has the maximum representation within the ECE group among all construction equipment verticals. According to research consultancy Off-Highway Research, equipment sales are projected to exceed 73,000 units this year as the Government continues to place an emphasis on more intensive infrastructure development. The market in the first half of 2017 was particularly strong ahead of the implementation of the new national Goods and Services Tax (GST) in July this year. “Almost all types of equipment will witness growth, though the market will continue to be dominated by the six most popular products: backhoe loaders, crawler excavators, mobile cranes, mobile compressors, compaction equipment, and wheeled loaders. Together these will account for 93 per cent of the market in 2021,” the Off-Highway Research’s market report says.

According to available data, construction equipment sales in India is projected to grow by over 10 per cent this year, continuing the momentum of the +36 per cent surge seen in 2016. This will see the market surpass the previous record high of 72,492 machine sales seen in 2011. Looking ahead, Off-Highway Research expects continued buoyancy in the market, although this will inevitably moderate in 2019 due to the general election. However, growth is expected to resume thereafter, with sales likely to exceed 90,000 units in 2021. Earth-moving equipments is the largest segment of the construction equipment sector in India, primarily fuelled by mining and construction sectors. Equipments include backhoe leaders, excavators, wheeled loaders, dumpers/tippers, skid steer loaders.

Mining equipment is another major exhibitor segment at EXCON. India has a decent population of mining equipment OEMs ranging across the spectrum and variety of mining equipment. These range from drilling machines, shredders, drill rigs, blasting equipment, , hammers, mining locomotives, industrial crushers, loaders, etc. trucks, forklifts, cranes, and many other useful mining machines. According to Sameer Bansal, General Manager, Off-Highway Research, India, “The renewed vigor in the industrial, construction, and economic activity, would support growth in demand for all minerals including coal, iron ore, lime stone and bauxite, which bodes well for the growth in demand for mining equipment.” He adds, “Off-Highway Research is optimistic about the future growth of the rigid dump truck and crawler dozer market in India and forecasts it to grow 40 per cent in 2017 and a further 18 per cent in 2018.” According to VDMA, 56 per cent of the market by value is constituted by dumpers, other types of mining equipment account for the rest of the market.

Material Handling Equipment (MHE) OEMs also have sizeable presence at EXCON. With demand for quicker time to market for projects, there is a concomitant rise in demand for tower cranes. According to some estimates the domestic market size for tower cranes was around 700 units, annually. Even Tier-II towns are witnessing previously unseen level of development, and the skyline of cities such as Mumbai, Pune and Delhi are changing with skyscrapers becoming the norm. Mumbai alone accounts for approximately 70-80 per cent of the demand for new tower cranes. The tower cranes segment is expected to grow at 20 per cent annually over the next few years. According to Tata Strategic Management Group, India’s mobile crane population is projected at 13,000 units in 2017. Industry sources expect the MHE segment to grow at a CAGR of 20 – 25 percent over the next few years. Cranes of different types and configurations are supplied across a wide range of operating parameters.

Crushing and Screening equipment (CSE) is another major segment present at EXCON. A study conducted by Central Pollution Control Board of India (CPCB), estimates that 135 billion tons of crushed aggregates will be required during the 12th Plan period. When translated to equipment needed, this adds up to a huge 26,500 CSE units by end-FY17, as compared to around 12,000-15,000 operational units currently. India’s ECE market is valued at $ 230 billion in 2017. Of this total the share for the CSE segment is projected at 13 per cent and projected to touch $ 30 billion (Rs 1,350 billion) end 2017. And the new trend of using artificial sand will fuel this growth even further. According to available data the global CSE market is projected at $ 2.55 billion by 2022, by when mobile crushers are expected to dominate demand. In the local market, Indian and foreign OEMs are competing intensely for maximum market share in this segment.

Other product verticals include engine oils and lubricants, tunneling and trenching equipment, scaffolding and formworks, pneumatics and hydraulics, IT and Data Analytics, components and spares, MRO service providers, etc.

“Infrastructure development is a key economic driver and enjoys an intense government focus that should accelerate demand for construction equipment in the country. India needs an estimated investment of Rs 31 trillion ($ 465 billion) over the next five years to keep pace with its growth targets, of which over 70 per cent would be needed for power, roads and urban infrastructure segments. The total budgeted outlay for the infrastructure sector for fiscal year ending March 2017 is Rs 2.2 trillion ($ 33 billion),” said the report. The general buoyancy of the market is expected to see sales rise to 73,595 units in 2020.

 

Lining up on the Grid

India is now the second biggest construction market globally, after China whose CAGR is decelerating as it approaches saturation point. Also the Indian market is now defining global standards for Emerging Markets, which is a humungous opportunity for these OEMs. The Indian market has also turned into a global manufacturing hub for many global majors. The Indian buyer is now shopping in a ‘Buyers’ Market,’ where ‘Customer is King,’ and customer requirements go beyond the sticker price into TCO and Aftermarket Services. OEMs have to line up their machines on the EXCON ’17 Starting Grid, and convince the Buyer how much mileage they can give, only those who can do that will drive ahead of the competition.

 

About the Organisers

India's premier industry association Confederation of Indian Industry (CII), is organising the EXCON 2017, scheduled to be held between 12th – 16th December 2017, Bengaluru, Karnataka, India. Presently in its 9th Edition, the international construction equipment and technology trade fair is supported by the Indian Construction Equipment Manufacturers Association (ICEMA) as Sector Partner for the event.

 

EXCON 2017 FAST FACTS

  • Largest construction equipment exhibition in South Asia
  • 2,50,000 SQ.mts of exhibition display area
  • UFI approved event
  • 1000+ Exhibitors including 275 from abroad
  • 12 Country Pavilions
  • 40,000+ Business Visitors
  • 300+ Product Launches
  • Industry Conferences by CII, BAI, ICEMA
  • International buying Delegates
  • B2B Meetings Networking Forums