Kunal Gala, Director, shares his views on the growing influence of Chinese OEMs in the Indian market, and expresses the need for standardization and IoT to bring more transparency and efficiency in equipment management.
How has the equipment rental industry evolved over the past 10 years and what is its current market status?
Over the past 10 years there has been a major shift in the way how equipment rental companies are purchasing equipment. They are buying more newer machines than used ones. This is mainly due to demand of equipment from infra project and the abundant supply of machines from Chinese manufacturers. Over the years, these manufacturers have also improved their product lines in terms of quality and durability, plus they have a much better service support system now.
Currently, due to the increasing number of infra projects, there is a good demand for machines, which is being met by the Chinese manufacturers and the rental companies investing in the Chinese machines as well. There might be a reason for concern when the mega projects have been completed and new projects are yet to be launched. What happens during this period when work has stopped, albeit temporarily?
How has the hike in steel & fuel prices and implementation of BS IV norms influenced prospective clients’ plans for renting machines?
With the increase in equipment price, I think that only a few customers, who are basically the end-users, have been buying new cranes instead of renting them.
Fuel prices constitute only about 10% of the total cost of rental and that too most of the times it is to be provided by the end-users, so it doesn’t impact their decision making for buying or renting machines. Also, manufacturers are constantly upgrading their engine norms as per the government regulations, so BS IV norms haven’t made much of a difference in the construction rental industry.
What standardization is required in the equipment rental industry?
The crane lifting capacity should be a standard. Many manufactures overate their cranes and increase their crane capacity so that they can demand a higher sales price. Sometimes, even rental companies hike their rates a per the project needs.
OEMs also need to install IoT devices on all their new machines so that equipment owners can monitor their operations remotely, troubleshoot in case of any breakdown, and take timely action for their servicing and maintenance.
What measures do you take for checking client's due diligence?
Most rental companies are preferring to give cranes to MNCs or companies with a good payment track record.
Generally, we work with clients who have been in this industry for more than 10 years and have a good track record for timely payments. As an MSME, we make sure that our payments are cleared within 45 days, and we get this clause incorporated in our work orders.
What are your plans for expanding your fleet and important projects where your cranes are deployed?
We have added a few crawler cranes of 80- and 100-ton capacity, and also manlift cranes of 60-meter and 70-meter.This year, we are planning to add a 260-ton crawler crane, and a high-capacity telescopic crane of over 500-ton capacity.
We have recently supplied our 500-ton telescopic crane to the Nagpur metro, which is a unique four-way transport project at Gaddigodam. A unit of our 84-meter and a 100-meter-high reach manlift has also been deployed for an important windmill maintenance job.