17 January 2020

Interview - Manoj Chaudhari (Sarens Heavy Lift)

We see great opportunities with projects getting kick started


Sarens Group is a recognised worldwide leader in heavy lifting and engineered transport. With state of the art equipment and value engineering Sarens offers its customers creative solutions to today's heavy lift and transport challenges. MANOJ CHAUDHARI, MANAGING DIRECTOR, SARENS HEAVY LIFT INDIA PVT LTD spoke to SHRIKANT RAO about his company’s prospects in the wake of the expected project push by the Narendra Modi government.


As a prominent player in the heavy lift segment what are the opportunities you are looking at in the current year?

The current year seems to have started on a good note. The level of enquiries and order book has picked up significantly. We feel that this is just the beginning of good times and a lot more; better is yet to come. Riding on the huge expectation from the new Government, the industry outlook is looking very much positive. The industry believes that the new government’s focus would be to clear the road blocks in the major projects on hold during the last few years and to provide a conducive & transparent business environment. There are a lot of projects in areas such as power, fertilizers, refineries, petrochemicals, metals & minerals and infrastructure which were announced in last few years but which couldn’t kick off/ progress due various reasons like regulatory clearances, land disputes, funding crisis, raw material issues & issues related to policies.  Once these projects picks up, the opportunities for heavy lift & crane rental players like us would be enormous.


What are the areas Sarens will be focussed on?

We see great opportunities with lot of projects in power, refinery, petrochemicals, fertilizers, metals & minerals getting kick started this year. Our focus would be to ensure participation in each of these sectors. Though our immediate focus is to deploy our existing fleet on long term basis wherever we get opportunities, we are not averse for need based or project based expansion.


What is the size of the crane rental market in India?

Nobody knows it exactly. No definite statistics is available and it is difficult to arrive at the exact size. Besides, the views are hugely diverse.


As a company, what is your own assessment?

It could be about 3500 cranes above 20t and Rs.3000 crore rental per annum. This is very rough estimate and includes fleet owned by project owners, EPC companies & mechanical contractors.


What is the size of your fleet?

Right now, we have 45 cranes in India. The biggest one is 1250 ton capacity.Additionally, we have a set of hydraulic axles & a special lifting system comprising of skidding equipment, lifting gantry & a range of strand jacks; generally used for lifting equipment in power projects. The fleet size in India however, is never a limiting factor for us. At the group level, we have nearly 1700 cranes with 3200t as the biggest one, about 1000 SPMT’s & a wide range of special lifting equipment like Strand Jacks, Lifting Gantries, Jacking & Skidding equipment, barges, trailers, tower cranes and more. The group currently operates in more than 50 countries and equipment are moved from one country to an other depending on projects & business needs.


Where is it deployed?

The fleet in India is currently deployed with 14 customers, at 19 locations across 10 states. The biggest crane (1250t) is in Delhi now, working at the prestigious Signature Bridge Project. The Signature Bridge which is an unsymmetrical cable stayed bridge with height of steel structure as about 150 mtrs; is being constructed by Gammon-C. Cidade-Tensacciai JV for Delhi Tourism and Transportation Development Corporation across the Yamuna river at Wazirabad.This project is considered to be an iconic & landmark project by the Delhi government.


Which are the other projects where your equipment is being used?

We are there at almost all major NTPC power projects - 3 x 800 MW at Kudgi, 2 x 660MW at Solapur, 2 x 660MW at Meja, 2 x 800MT at Lara.We are also working at few other private power projects, at Jamnagar - J3 project of Reliance, at OPAL Dahej, at Kochi Refinery and many others. In short, we are catering to almost all of our major markets – Civil Construction, Petrochemical, Oil & Gas, Power, Metals & Minerals and Infrastructure.


Windmill turbines are also a major market for you? 

The wind industry is undergoing a very difficult phase since last 18 to 24 months. The capacity installation is dropped and nowhere near the original planned figures.  This has severely affected the crane rental industry because many of the crane companies had expanded heavily; solely depending on this market. Though we have worked with almost all the major wind companies - Enercon,Gamesa, Vestas, Regen, INOX, GE; our exposure to wind industry in India was limited. Nevertheless, we do see a great potential in wind industry and expect this sector to grow exponentially in coming years.


So the major chunk of your work would be from the power sector?

If you see sectorial breakup of our revenue of last two years, more than 40 per cent is done in the power sector; mainly thermal power projects. This year we expect about 45 per cent  from Refinery & Petrochemicals, about 35 per cent from Power sector and 20 per cent from other markets such as Civil, Metals & Minerals, Shipyards/ Modular yards Infrastructure.


Do you expect a jump in steel and cement because of the scaling up?

We do see a jump in Steel & Cement in coming time; the extent will depend on how the market emerges as a whole. In past 2 years, market witnessed wide variation in supply & demand for these two industries. There was a time when market had insufficient capacity and there was a time when the capacity of idling. Since both these sectors are directly related to growth in infrastructure, significant potential do exist. Government is expected to provide boost on infrastructure spending which will automatically provide a reasonable level of demand driven growth to these sectors.

What is the role you expect to play in areas like urban infra; smart cities and industrial corridors?

Given the nature of work, I don’t see us playing any significant role there but we could supply smaller cranes & tower cranes for the high rise buildings & industrial corridors. Other than this, we could look into providing services in terms of special lifting products and special transport vehicles which can be used for purposes like transportation & erection of girders. This however involves specialized engineering and thinking beyond conventional methods.


Do you supply cranes for super tall buildings?

Building constructions typically need Tower Cranes. As of now, we do not have tower cranes in our fleet in India. Tower Cranes which are available in our global fleet are also super heavy in nature – 100t plus capacity cranes. I don’t think the super tall building as on today in India need such super heavy cranes.


Do you expect any change in profile now that the government has decided to act?

If everything goes as planned obviously we will have more cranes coming into India. However, I don’t see that happening immediately,at least not till next year. The rental industry in India still have a large surplus capacity idling and it will not be a smart business move to expand till there are enough jobs for the entire crane population in India.


What are your expectations from the government?

If I have to say in very crisp and clear bullet points, then I would say the first thing the government needs to do is to create an investor friendly business environment, ensure speedy clearance of projects which are stranded on account of this or that reason, ensure a transparent & inclusive tax structure & implement easy procedures; possibly single window clearance. Another important expectation from the government is to bring GST as early as possible. That will be a big help for companies such as ours which have to move from one state to another for work each day and facing big challenges there.

What can we expect Sarens’ performance to be like in 2014-15?

As I said earlier, we don’t expect to grow this year in terms of fleet. We would like to follow footsteps of the new Government who intend to take corrective measures in the first two years and accelerate work in the next three years.
In next one or two years, our focus would be to ensure full occupation for our existing fleet and cost control. We are however open for mobilising additional cranes on a project to project basis on temporary import. At the moment, we are quoting for few such big projects involving mobilising bigger cranes on project basis. A single project like thatcould significantly lift our turnover. Till then, maintaining our turnover at `100 crore is going to be a real challenge.

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