Indian infra equipment industry will need to lease or procure more equipment

May 8, 2017

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Closer to the end of April 2017, the Union Minister of India for road transport and highways Mr. Nitin Gadkari rolled out an intricate plan to provide a push to the infrastructure industry with “at the least a dozen new expressways would be built in the coming year to connect various states within India, of which 3 could be started in 2017”.

This news makes one wonder on the quantum of work being done and the equipment that will be required. We have tried to take a sneak peek into the various segments of the Earthmoving and Construction Equipment (ECE) industry.

A well-developed infrastructure is a foundation for growth in any country, paving the way for a better quality of life and a rapid rise in gross domestic product (GDP), especially for developing countries like India.

Roads & Bridges     
The government proposes to award Rs 500,000 crore worth of toll road contracts, totaling approximately 50,000 km, within the final years of its tenure, and to make sure that paving for 30,000 km (of the offered contracts) begins earlier than its time period ends. ‘This plan to seriously improve India’s infrastructure, which includes the roadway network, over the following several years is important to making sure high economic boom rates for the years to come, inclusive of improved employment opportunities.’

The expressways will offer speedy mobility alongside major corridors in the country that is absolutely critical mainly to increase the safety and efficiency of transportation across India. This road network will provide the interior areas of the country get right of entry to the major economic corridors critical for boom and improvement. As an example, the Northeast region is economically lagging behind the rest of the India because of its fairly underdeveloped roadway infrastructure.

Airports

There are a total of 454 airports in India, out of which around 90 are open for commercial services and 16 are designated as international airports. Delhi and Mumbai are by far the busiest airports in India, carrying almost 2.5 times traffic as the next busiest airport.

The growth so achieved has put tremendous pressure on current airport infrastructure in the country. The Indian Government has projected that an investment of around Rs. 180,000 Crores in the next three year plan will be needed to help cope with additional demand in this sector.

Railways & Port

Railways have continued to be another large focus area for developing transportation infrastructure. One major program intended to attract private investment is the Dedicated Freight Corridor project.

Till December 2013, 217.5 million tons of capacity per annum in our ports has been created to give a big boost to infrastructure industries. The capacity of ports in India by the end of 2020 is targeted to touch 2,493.10 million tons per annum (MTPA).

Indian Earthmoving & Construction Equipment Industry

Investments in infrastructure are the main growth drivers of the construction equipment industry. The Indian construction equipment sector is made up of five main segments: earthmoving equipment, road construction equipment, concrete equipment, material handling equipment, and material processing equipment.

Construction equipment market share by segment (Source: ibef.org, i-cema.in)

Backhoe loaders is estimated to comprise over 45% of the earthmoving equipment sales based on units, followed by crawlers about 23% of the 68%. Concrete equipment is the second largest segment with a market share of approximately 15%. It comprises asphalt finishers, transit mixers, concrete pumps and batching plants. Material handling equipment and material processing equipment account for 11% and 6% of the market respectively.

It’s far believed by many eminent industrialists that the industry will certainly rise to the occasion and deliver initiatives on such an ambitious scale, increasing their useful resource bandwidth. in addition to this, the government has been open to multi-national corporations or worldwide corporations partnered with local Indian companies.   With multiplied production activity, there may be a need for companies you got or rent additional equipment, as a consequence boosting ancillary part sectors.

India is poised to be world’s 3rd largest construction market by 2025

All signs point to a country that would be wise to focus on developing its infrastructure. And when it does, demand for ECE segment will surge. In the near future in India, the bulk of construction growth is likely to come from growth in transportation infrastructure (roads, rail, airports, ports), urban infrastructure (mass rail transit systems, water supply and sanitation, urban housing) and rural infrastructure (rural roads, irrigation, rural housing)—three important sectors for driving ECE demand.

ATG has a wide range of tried and tested tires in Alliance, Galaxy and Primex brands for all earthmoving and construction equipment (ECE). With some of the popular tires like Galaxy Multi Tough for Compact wheel loaders, Alliance 330 are a good fit for Grader, Galaxy EX1 for Excavators, Galaxy Marathoner for backhoe loaders, Alliance 650 for loaders and Galaxy Compactor C1 for compactors and pavers. When it comes to skid steers Galaxy Hulk and Beefy Baby are world leaders. You could have a peek at the wide range of ECE tires here on our website.

Written by Pinaki Mandal