Construction Equipment manufacturers upbeat on Govt’s infrastructure spend

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Construction Equipment manufacturers upbeat on Govt's infrastructure spend

Union Minister for Road Transport and Highways, Kamal Nath, inaugurated, South Asia’s largest trade fair for Construction Equipment and Construction Technology. This year, in it’s 5th edition, the number of exhibitors increased by 55% and display area grew by 60% over 2007.

Delivering the inaugural address, Kamal Nath stressed on the need to focus on India-specific products, India-specific R&D and skill development to drive growth for the Indian Earthmoving and Construction Equipment Industry (ECE). He said that there is a need for huge capacity building across the entire spectrum of the infrastructure industry – from engineers, contractors, consultants, construction equipment manufacturers, etc, to enable the government achieve the target of constructing 7000 kms per annum.

Between 2004 and 2007, India’s earthmoving and construction equipment industry’s revenue has grown at over 40% each year, reaching US $2.3 billion in 2007. This figure is expected to reach US $ 12-13 billion in 2015.

Mr Ranaveer Sinha, Chairman, Indian Earthmoving  & Construction Industry Association Ltd (IECIAL), said that the size of the global construction equipment (CE) industry is US$ 100 billion while that of India’s is US$ 4 to US$5 billion. He said that the size of the industry is expected to double in 4 to 5 years.

“There is a great opportunity in the area of export, where India, as a low-cost manufacturing base, can become the factory of the world. We should look at not only exporting equipments but also components, design and R&D. Indian construction equipment industry is expected to significantly change in the next decade and this will be driven by a few growth drivers – first of all it is the unprecedented infra spend, second is dominance of price-value focused customers, third is the broader engagement of global original equipment manufacturers,” Mr Ranaveer Sinha said.

C R Swaminathan, Chairman, CII-Southern Region said that the Indian construction industry is estimated to have a turnover of US$ 60 billion in the current year. This sector employs 31 million people, the second largest, next only to agriculture. It consumes 40-50% of national plan outlay and accounts for 20% of GDP.

Vipin Sondhi, Chairman of Excon 2009 and Managing Director of JCB India, said that factors including the stimulus given by the government for infrastructure development, presence of the stable and proactive government, continual articulation of government about the thrust given to infrastructure development and dynamism of ministers in the government are giving big boost to the growth of the Indian infrastructure and ECE industry.

He feels that the Indian ECE industry will be a US$15 billion industry by 2015 – however, to fully realize the potential, there should be concerted and well-coordinated efforts by the industry and the government. The key focus area of such an effort should be on increasing the availability of trained man power in the country.

Kamal Nath said that with it’s strong fundamentals, India is very well on the growth trajectory – the economy is set to achieve a 6.5% growth this year and aims to achieve 8% growth in 2010 and 9% in 2011. Though India felt the tremors of economic slowdown, it’s matured and strongly regulated financial system did not collapse.

He said that as the country grows, the biggest deficit in infrastructure will be in the road sector. India has 3.4 million kms of road, which is the second largest in the world. Over 40% of the road transport takes place on national highways, however out of the 70,000 kms of highways, 17,000 kms are one-lane highways.

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