Deepak Vig, COO, Barkat Cranes and Equipments, shares his views on what’s driving demand and competitiveness in the market for cranes, and gives information on his company’s capabilities in executing mega infra projects with their wide fleet of cranes and timely aftersales services.
How is the market for heavy lifting equipment like cranes meeting demand in view of the numerous ongoing infra construction projects?
India’s infrastructure sector is booming with the creation of mega projects like metro rails, bridges, flyovers etc - all of which require equipment for lifting and placing heavy elements like prestressed girders etc. The Ahmedabad-Mumbai Bullet Train project alone has deployed about 1200 cranes and more will be needed, plus, there is talk of a Delhi-Ayodhya bullet train.
In such a scenario, demand for cranes has increased drastically; in fact, it is already outstripping supply; the waiting time for a new crane is now three months. Crane rental rates have also gone up: a year ago, a 100-ton crane would fetch Rs. 4.5 lakh; now its rental rate is Rs. 6 lakhs.
Most construction companies these days want only new machines as they want to be seen as safety compliant. Customers who are looking for a used machine, want assurance on its health and performance. Some companies de-hire a machine if it becomes five years old during the contract period. So, for a contract period that is for three years, we provide a machine that is 1 to 2-years old. However, there are contractors who deploy machines that are 15-20 years old, but such machines are not safe to operate and accidents can happen at the project sites.
Chinese machines are flooding the Indian market because they can be bought at half the price of a German make, which comprise only 10% of the imports. Plus, Chinese manufacturers also permit zero payment up to 3 years of purchase, and the loan interest rate of Chinese banks is lesser than that of Indian banks. At Barkat too, about 50% of our machines are of Chinese make as they provide a better RoI to the customers.
How is competition growing in the crane market?
There is a huge demand for cranes, especially for new and high-quality machines of various tonnage. Most customers prefer dealing with a single supplier. So, there is a lot of competition, but it is healthy; for instance, if my machine were to break down in a remote area, a competitor operating in that area would help me out, and vice versa.
Big players like GAL and BPCL have their own machines, and when they need maintenance, these companies will float a tender for obtaining the spare parts etc. But crane rental companies like us are also responsible for the maintenance and upkeep of our customers’ cranes, so we have set up workshops and have engineers to undertake the maintenance work. We are also keen to collaborate with OEMs for the maintenance of our machines.
Our USP is short delivery times, faster service, and quality products at affordable prices.
What is Barkat Cranes and Equipments’ current fleet size and which construction sectors is the company catering to?
Barkat Cranes is a 3-year-old company with almost 100 units of equipment, 50% of which comprise cranes of 50 to 750 tons. Our fleet is young, and we have recently added 20 brand new cranes, so we have less maintenance to deal with. We have 10 trailers which we use for transporting our equipment; and 30-35 heavy-duty forklifts of 150 tons, which are diesel operated; they are being used in the Mumbai Port area.
We specialize in rental of Crawler cranes, Mobile cranes, Forklifts, Trailers, and Tower cranes with a fleet that includes both new and refurbished brands of well-known manufacturers - all of which are fully compliant with international standards. Our USP is short delivery times, faster service, and quality products at affordable prices.
We have our own workshops and warehouses in the Mumbai Port Trust, JNPT, and at Dighi, where we provide services like taking delivery from ships to site, and even help with custom clearances. We rent out available space in our warehouses for storing project cargo. We are also looking for logistic partners.
We are providing our expertise in heavy lifting jobs at windmills, and have been working with the Adani Group in this sector. In fact, we are catering to almost all the infrastructure construction sectors engaged in manufacturing raw materials. Our clients include BPCL, BHEL, JSW and Hindalco. Our order book currently has orders worth Rs. 75 crores for the next one year. Our capacity utilization is 100% and our profit margin is 40-45%. We are looking for strategic partners to expand in the coming years.
What technologies does the company use in its machines to ensure safety and timely maintenance at project sites?
It is important for crane manufacturers to provide machines with in-built technologies for geofencing, fleet management, fuel consumption, monitoring utilization, operator performance etc.
The way we have one nation, one tax, we should also have one nation, one certification, to operate machine in a particular state.
The load sensors in our equipment give alerts or shut down the machine automatically if it exceeds 70% of its capacity. Fuel consumption sensors show the rate of utilization of fuel and give alerts on any sudden drop. Our cranes are equipped with GPS for geofencing. Fleet cards by BPCL help us manage diesel utilization. A software for remote analysis helps our clients understand the feasibility of a project; the varying loads that will come on the soil; the location of our cranes, and can calculate the desired length of the boom and the load to be carried by the crane.
Our safety managers present at sites are equipped with maintenance toolboxes; they can troubleshoot, coordinate with OEMs, and procure spares locally. We hire operators with a minimum 5-year experience, and they are also trained to conduct basic maintenance of our equipment. Our policy is to never let our machines stay down for more than 24 hours.
What are the bureaucratic hurdles in the execution of projects?
GST has no doubt brought smooth operations in the industry, but different road taxes in different states are a big hurdle. For a 100-ton machine to pass through a state, we need to pay a huge amount of one lakh. For entering the southern states of India, we have to pay 7% of the cost of the machine. For a total of 30 states, the total tax paid will amount to 210%, which will far exceed the cost of the machine.
For a machine to operate in a particular state, it needs certification; however, different states have different certifications (like PUC) for the same machine. I think there should be a single certification like the uniform GST tax across all states. Though digitalization has made online transactions simpler and faster, some RTOs do not accept online tax payment because of some revenue issue.
Please share a challenging project wherein the company helped a client complete the project on time and within the budget.
At the JSW Dolvi (near Mumbai), when a crane broke down, another 750-ton crane was needed immediately. Our 750-ton crane which was in Delhi, was brought to the site within 15 days. During its installation, there was a breakdown, so we quickly procured the spare part from Liebherr in Kolkata, and the work commenced. The estimated completion time of the project was 4 months, but we helped complete it within 3.5 months.