18 October 2019

Equipmentsphere-MHE

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With 2016 seeing stalled construction projects being reactivated the Indian material handling industry is expected to see busy times

 

Suppliers to the material handling equipment universe – and this includes a wide array of products like pick & carry cranes, forklift trucks, rough-terrain cranes, truck-mounted cranes, crawler cranes, tower cranes, reach stackers, lorry loaders and aerial work platforms, conveyor systems, automatic guided vehicles, industrial trucks, reclaimers, bucket elevators and more – have never seen such a frenetic pace thanks to the promise of return to activity in a wide range of sectors such as manufacturing, ports, logistics and warehousing.

While at a global level a recent study by Freedonia Research Group assesses that the demand for lifting and material handling equipment will rise by 5 per cent per year to $142 billion during 2012-2018 equipment industry experts aver that India and China will form the core for development of the lifting and material handling equipment business in the foreseeable future.

Going by the feedback at Make in India week in Mumbai last month a large number of construction and infrastructure projects which feed the Indian lifting and material handling equipment sector are expected to be kickstarted this year.  With the momentum picking up the Confederation of Indian Industry expects the lifting and material handling equipment business to be in the thick of action through 2018.

 

 

MARKET DRIVERS

The MHE industry encompasses a diverse range of tools, vehicles, storage units, appliances and accessories involved in transporting, storing, controlling, enumerating and protecting products at any stage of manufacturing, distribution consumption or disposal. The four main categories of material handling equipment include: storage, engineered systems, industrial trucks and bulk material handling and the growth potential for these product is huge. Presently the demand in the country is driven by overall industrial production and the requirement of companies' to automate production and facilitate the efficient flow of goods to the market.  There is strong demand for these products in India, particularly so with the government s emphasis on project implementation – construction of airports, ports, new transportation modes like metros, new urbania and industrial zones, power and oil & gas projects – as part of its ambitious plans for infrastructure not to mention the key role to be played by the logistics sector which facilitates movement of material.

 

Till the arrival of a new government at the centre in mid 2014 there was a period of economic and political uncertainty, underutilisation of manufacturing capacities by the major players, delay in execution of infrastructure projects, threat from Chinese dumping activities which led to the flat growth in the segment. Notwithstanding the economic slowdown and the projects pushback witnessed in the previous two years equipment manufacturers now see bright prospects and pickup in business on the strength of various projects announced by the government.

 

Logistics and the manufacturing sector constitute the main growth drivers for the Indian lifting and material handling equipment segment at present. However with increasing requirement for specific machineries, growth is also seen from other industries like auto and auto ancillaries, general engineering, steel, power, paper and waste handling activities.

 

Some of the major vendors operating in the MHE market space are Demag Cranes & Components (India) Ltd, JCB, Manitowoc Cranes India, Bevcon Wayors, Action Construction Equipment Ltd, Godrej and Boyce Mfg. Co. Ltd, Elecon Engineering Co, ElectroMech Material Handling Systems (India) Pvt. Ltd., Voltas Material Handling, TELCON Construction Solutions, Tractors India Ltd., Escorts Construction Equipment Ltd and ThyssenKrupp Industries India. Many of these companies have while launching new products in the MHE segments have also upped manufacturing capacities, and resorted to strategic tie ups in the hope of the business environment improving in the coming months. 

 

Admittedly however the Indian market cannot compared to that of developed economies like the United States, Europe, Japan or Singapore in terms of its knowledge, use, and the importance of MH equipment. A wide man-machine ratio disparity is noticed. However the global assessment is that the Indian MHE market will evolve both in size and technology in the course of time with more infrastructure projects being lined up which necessitate technologically superior machines. The growth momentum will also come from increased automation and safe working practices.

 

P V Ramdev, MD, Everest Engineering Equipment Pvt Ltd is led to say, “When it comes to man and material handling equipment the importance of reliable control technology cannot be underestimated. Through the medium of our products we are able to take that message to potential users.”

 

 

 

MARKET TRENDS

The Indian material handling equipment industry is currently assessed as having an approximate worth of €300 million. Pick and carry crane and forklifts are the dominating sub-segments in the MHE sector, with a total market share of 39 per cent. The estimated market size for pick and carry cranes is € 57.76 million, which is 27 percent of the market share, and forklifts  about € 57.76 million, which is 12 percent of the market share. It is reported the forklift segment is witnessing a year-on-year growth of about 20 per cent. The sector today includes machineries ranging from 1-5 ton to 20 ton models.  The major players in this segment are Godrej and Voltas with a total market share of 80 per cent, while the remainder is the province of small scale manufacturers.  Most firms are now looking to scale up efficiencies in terms of material movement from source to destination leading them to create technologically innovative products and solutions.

 

Admittedly despite the seeming growth India’s forklift manufacturing still lags behind developed markets and is even outpaced by the neighbouring Asian markets. As per a study by IBEF the Chinese forklift market is about 12 times more than India, the Japanese market is around six times bigger and even countries like Vietnam and Thailand are way ahead. 

 

Further there is a growing demand for high capacity mobile and crawler cranes in areas like wind power generation projects, cement plants and refineries and for tower cranes in real estate in airport modernisation projects. Demand for gantry cranes is expected to come from the infrastructure sector and for single or double-girder overhead cranes from manufacturing facilities.

 

“In material handling, we offer hydra cranes from 10 tons and at a higher technology we offer the safe crane series TRX from 15 to 23 ton range.  We also have rough terrain slew cranes ranging from 20 tons to 40 tons. These cranes find use in all types of applications. You could think of any material handling at any project site and Escorts is the name that comes to the customer’s mind, says Rajinder Raina, General Manager – Marketing, Escorts Construction Equipment.

 

Very recently ElectroMech Material Handling Systems India Pvt. Ltd, the largest EOT crane manufacturer of India, achieved a new milestone by manufacturing its 5000th crane – 150 MT Gantry Crane which it delivered to Gamesa Renewable Energy Pvt. Ltd a global technological leader in the wind industry. Says Tushar Mehendale, Managing Director, ElectroMech, “Offering tailor-made material handling solutions of international standards to our customers has been our forte and our constant endeavor is to bring new and innovative solutions to the market.”

 

 

What is also significant for the Indian material handling equipment sector is the evolution of Access Equipment as a niche segment’. This relates to a range of machineries like aerial working platforms, telehandlers, articulated lift platforms etc, technologies which are very much in vogue in developed economies like USA, Europe, Singapore and Japan. In India the market for access equipment is primarily driven by pre-engineered buildings and pre-fabricated structures. The increasing emphasis on the development of residential and commercial projects and increase in public infrastructure spending is expected to speed up the phenomenal growth of aerial work platforms by 2020 in India. The players currently dominating the Indian aerial work platform scene are Haulotte, MEC Aerial Work Platforms, Terex, JLG Lift and Access Equipment and Tadano. Haulotte India has been at the forefront of giving a push to products like Vertical Masts, Scissor Lifts and Articulated Boom Lifts from 6m to 15m.

 

 

RENTAL WAVE

With the Indian market dictated by cost concerns rental and equipment leasing in the material handling equipment market is expected to drive domestic future growth. As per a KPMG assessment the rental business in the Indian MHE sector has increased to about 20 per cent from just two percent in 2004 and the business is s expected to touch $2 billion by the end of  2015. It is reported there is also scope in equipment financing and end-to-end services covering the equipment life-cycle-financing, user training, maintenance and buy-back of used equipment. The rental wave presents great business opportunities for manufacturers like Manlift which derives a large chunk of it business from rental equipment in India. The company with a rental fleet of over 1000 aerial work platforms is looking to consolidate its presence in the market. Meanwhile firms like JLG too have capitalised on the emerging potential of the rental business. Mtandt Rentals Ltd offers a range of equipment under its rental umbrella which includes  self propelled diesel and electric boom lifts and scissor lifts. 

 

 

HURDLE ZONE

A matter of critical concern for manufacturers in the Indian MHE sector relates to low levels of demand as compared to international markets. Owing to this they counter a cost disadvantage as opposed to foreign manufacturers from China and other countries. Another challenge comes from recalcitrance on the part of customers, particularly Public Sector Units, to accept new technologies. The PSUs invariably opt for low priced tenders without considering the manufacturers’ ability to provide best available technical specifications which can deliver greater value and fast track activities at projects. This often leads to technical disqualification of the bidder and becomes counter-productive for both the public sector body as well as equipment suppliers. The other major hurdle is shortage of skilled manpower. There is now a great need for active participation from all stakeholders and implementation of stringent quality and safety norms.

 

 

MHE POSITIVE

CE sector analysts are hopeful of an improvement in fortunes of the sector not just in India but elsewhere around the world. The global demand for materials handling products is expected to rise 4 percent annually through 2016 to $123.6 billion, according to a new study by The Freedonia Group. Among the markets India and China will see the fastest gains, in large part because of rising manufacturing output which will spur demand for equipment to facilitate distribution and production. Experts predict that material handling equipment market in India to grow at a CAGR of 15.62 percent on the strength of increased industrialisation across the states. There is an increase in investments in industries across India by both domestic and international companies, driving the demand for material handling equipment. Since most companies are not satisfied with material movement efficiency from source to destination they are seeking new products and technologies to get the right goods to the right place at the right time.

The prospects for the material handling equipment market in India looks bright with many innovative and efficient products being introduced by material handling equipment vendors. JCB recently launched two new product lines the telehandler and the skidsteer both of which have been received very well. “We feel material handling is going to be another very important industry for players to be present in,” says Jasmeet Singh, Head, Corporate Communications, JCB India.

 

 

“We will be consolidating and bringing in high technology material handling equipment products which will be made in India,” says Gladston Selvaraj, CEO, Esquire Machines Pvt Ltd.

That in sum speaks volumes about the way India’s MHE sector is expected to go.

 

 

PUSH ZONES

India’s Material Handling Equipment sector will see business opportunities from the following areas:   

  • Steel industry which will see large capacity expansions over the next 5 years.
  • The engineering sector which will see huge capital investments by 2017-18.
  • The power sector where € 64 billion investment is expected in next 10 years.
  • Automobile sector where production is set to cross 10 million units. 
  • The retail industry which is expected to grow to € 39.83 billion by 2018.
  • High rise development in real estate sector and growth of Tier II and III cities



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