The completion of awarding 62 road projects covering 7,957 kilometres in the 2011-12 fiscal, which is 57% more than the last year, could have not come at a better time than the beginning of the new plan period and fiscal for road construction equipment manufacturers. This is so because as after having made sizeable capital investments on production line they are now earnestly planning to expand their footprint in the sector. According to NHAI's recent report, the government is all set to achieve its earlier announced target of building 20 kms road per day by 2013-14, as it has completed construction of 2,250 kms road in 2011-12, in comparison to 1,784 kms during the period of 2010-11. In 2011-12, NHAI has awarded 49 projects of 6,491 kms whereas the ministry awarded 13 projects of 1466 kms through state agencies. In all 62 projects of 7,400 kms, the contracts have already been awarded as against the target of 7,300 kms. Some of the projects awarded have offered premium to the government and is likely to result in additional revenue generation of Rs.30,400 crore during the concession period. The government has placed a target of awarding 8,800 kms during 2012-13 fiscal out of which 1,500 kms are under evaluation.
The above targeted completion of awarding tenders is indeed a bolster for equipment manufacturers to increase sales. However, before going for celebration, the manufacturers will have to note that sales should be adequately backed by quality equipment placement, much in sync to global standards, as the government calculates to garner additional revenue during the concession period for the projects to be awarded, by exploring newer contract avenues through public private partnership models to bridge the fiscal deficit.
To interpret, this means that the contractors will now scout increasingly for equipment that increase productivity with lesser maintenance and operating costs, create quality road infrastructure, that are less prone to maintenance. All of which have to be backed by timely and quality back up support to job sites across the country, notably in remote areas by manufacturers. According to the industry estimates, road construction equipment market currently stands at an industry volume of 4000 machines per year and is growing @7-8% wherein the market is expected to grow at a similar rate for the next five years.
He further says, "to meet heterogeneous demand from India's road sector, we are well-positioned to offer range of products which includes, pavers, large and small asphalt and soil compactors and milling equipment." Volvo's Vibratory soil compactors are of 11 tons, whereas the asphalt compactors are of 8-10 tons; range of paver finishers are of 5.5–10 tons, pneumatic tyre rollers are of 22 tons, motor graders (tier 3 engine) is made available from 15 to 22 tons.
Mr. Muralidharan informs, Volvo's competitive position in Indian road construction sector is based on its engines. Our diesel engines are at the heart of the company's range of products. Based on well-proven, robust technology, our V-ACT engines range meet the needs of Indian customers by providing increased machine performance along with reduced emissions – that are ahead of the increasingly strict regulations on exhaust pollutants. With new fuel injection, air management technology and advanced electronics, the inherent potential of the V-ACT engine is tailored by Volvo engineers to meet the specific performance criteria required by different machine types and applications."
Though the sound product positioning may allow the Swedish equipment manufacturing major to have its foot-print in India with stiff competition. According to Volvo India, it adequately scores on technical support by addressing various operational issues that may come in way of the customers, thus giving it an edge over competitors. Mr. Muralidharan says, "We offer soil stabilization technical consultancy through our RASTA (Volvo's Resource Center for Asphalt and Soil Training Academy) initiative, where we study soil at customer's site and give them solutions to improve stabilization of road construction. We also have similar offerings to asphalt roads. High equipment uptime is provided by our dealers with expert, local knowledge and the parts and service support according to the customers requirements."
He further says, "high equipment uptime is also complemented by ‘CareTrack' – Volvo's telematics system that allows remote monitoring and machine diagnostics on all general purpose machines – which is now available in India and comes with a free three-year subscription. CareTrack offers customers a number of benefits. Primary one is the ability to effectively manage machine maintenance, servicing and repair through the system's ability to ‘see' how the machine is performing. Genuine Volvo Parts and CareTrack are both proving useful in maintaining machinery in optimal condition and achieving maximized uptime."
"Added to this, higher equipment uptime is ensured through Customer Support Agreements (CSAs) which come in several forms, depending upon customers needs and the work environment in which the machines are operated. With a complete Volvo-supported CSA, the client gets minimized unplanned costs and unexpected downtime, while control of expenditure is increased and higher machine availability achieved. A machine with a ‘full service history' will also expect to return a higher residual value upon disposal, says Mr. Muralidharan."
Adequate parts support is also a major thrust area of the company as a part of customer service. Mr. Muralidharan mentions, "we have recently invested in new ‘Factory Remanufactured Component centre in Bangalore.' The expert factory technicians restore a range of components to an often better-than-new standard. (‘Better' because components are upgraded to the latest iteration of that unit's development.) The facility allows users of Volvo construction equipment to have their used components renovated at a lower cost than buying new and consuming far less new materials and energy."
Focus on Tailor Made Solutions
Taking cognizance of the emerging demand pattern, tailor made products, and competitive to own and operate is also being focused by Wirtgen India private Limited. The German road construction equipment major has recently started production of Hamm 311 Soil Compactor at its fully integrated plant near Pune with complete with a Training School and Workshop for Refurbishment of machines.
Wirtgen Group offers a Complete range of Road building and Rehabilitation Equipments like - Wirtgen cold milling machines, soil stabilizers and recyclers, slip form pavers, Vogele range of Asphalt pavers, Hamm range of Compaction technologies, Wirtgen surface miners, and Kleemann crushing and screening plants. The majority of the equipment are imported from Germany.
Mr. Palagiri says, "we have been able to attain market share of 7-8 percent for the compactors in the first year of our launch and the intention is to reach 20% in next two years. "To expand our footprint in Indian road construction sector through placement of price competitive and quality products, our German and Indian engineers are developing 9 ton Asphalt paver for Indian Roads. The production of these machines would start by next year. Our business plan for India is to provide a high quality total equipment package for road construction, by making available milling machines, recycling equipment, paving machines whether concrete or asphalt, and a quality range of compaction equipment backed by an excellent service to our customers."
Marketing support for Wirtgen's equipment are provided by the company itself. Mr. Palagiri mentions, "since there is a good deal of technical and application support required for the equipment for building desired quality road infrastructure, our strong direct sales and application specialist team with network across most of the major cities in India does the job." Without intermediate dealers, it helps us to connect directly with customers."
On customer support Mr. Palagiri says," we have very strong sales, spare and service network across the country in 15 locations with trained teams of engineers and technicians. The company offers total solutions with comprehensive maintenance contract schemes through the life span of its equipment which is proving to be the most competitive edge in the present competitive market conditions." The company offers Spares support from its central warehouse in its manufacturing facility, and across India with logistical support to equipment working in different job sites across the country. The mother warehouse is connected to spare parts depot in Delhi, Ahmedabad, Hyderabad, Talcher, Ranchi, and Guwahati. Wirtgen is to set up a new spare parts depots in Chennai & Kolkatta.
With the new manufacturing facility, and advanced Product range, Wirtgen India looks forward to substantial business growth in the forthcoming years.
The company has introduced its new motor graders for the Indian market. Providing details of the equipment, Mr. Bali says, "we have successfully launched the 785i Motor Grader in 2011 and are all set to introduce a slew of ‘Manufactured in India' products like Concrete Batching Plants, 22T Crawler Excavators, 985i Motor Graders and a series of Backhoe Loaders. This will be complemented by LeeBoy's line of pavers and asphalt plants to meet the growing demand from the road construction sector."
He elaborates, "the newly launched Motor Grader, LeeBoy 785i has been engineered and manufactured in India to international standards. The 785i Motor Grader is a 12.4 tonne, 150 horsepower proven workhorse, designed to consistently level, rip, spread, cut and contour a variety of roads and other surfaces to exacting specifications. It brings greater value compared to its international peers by providing as a standard, advanced features like a fully automatic power shift transmission; ROPS (roll-over protection safety), FOPS (falling object protection safety) and air conditioned cabin for complete safety and higher operational efficiency. It also offers improved fuel economy due to its variable volume load sensing hydraulic system, lock-up clutch on torque convertor and electro-hydraulic fan drive."
According to Mr. Bali, as a part of company's long-term business strategy, equipment placement in India will be backed by adequate customer support. Our approach to market is very clear. We are here for the long haul and not to simply produce, stock and sell equipment. With LeeBoy India, customers don't get just the equipment. LeeBoy India's solution includes, amongst other things, the right equipment, skilled and trained LeeBoy operator technician (OT), together with an ownership of seamlessly providing equipment operation, preventive and breakdown maintenance and ensuring a pre-agreed uptime at a fixed cost to the customer. This ORM (operations, repair & maintenance) initiative is backed by a team of LeeBoy India professionals with deep work and functional insights in the road construction and construction equipment space."
He mentions, for timely equipment servicing, "LeeBoy India's extensive All India after Sales Service network of trained Service Representatives will be deputed to install and service during warranty period. Most of the spare parts used in these equipment are stocked locally in India thus making faster replenishments possible."
"As a part of customer support, given LeeBoy's experience and our new, integrated approach where we responsibly engage our selected customers on a product life cycle basis; we offer our customers a direct single-window interface from within LeeBoy India as a part of our customer engagement framework," says Mr. Bali.
LeeBoy's road construction and maintenance equipment offering comprises motor graders, pavers, concrete Curb and Gutter Machines, self-propelled brooms, pneumatic rollers, pothole patchers, asphalt distributors and maintainers and chip spreaders. Other products line includes, excavators, motor graders, backhoe loaders and batching plants.
Service Holds Key
Mr Varghese mentions, "High equipment uptime is a direct reflection of high quality, which is further backed up with top notch service and remote access technology. Quick data scan and an in-built default detector & recorder provide us all the service-relevant data of our plants. This enables us to quickly and accurately identify what needs to be done, so our customers can undeteredly focus on what is important, gaining more business. Original spare parts are stocked at our central warehouse delivering top notch performance and reliability to our customers." Marini also offers a wide range of comprehensive services through its unique ‘Plant MATE Program' which includes complete operation, maintenance and a unique spare part support."
According to Marini, the company is well-positioned to meet assorted requirements of India's road construction sector. "Fayat Group has the industry's widest product portfolio for each stage of road construction. So far, India has only been partially exposed to brands like Marini and Bomag for asphalt mix production, compaction & recycling applications. However, with India now entering into the league for quality road construction and maintenance of its existing highways, we are planning to offer our complete products range to the sector. Specialized Road maintenance technologies through our bands like Breining & Secmair have started benefitting the construction industry. New products range from Bomag including paving, milling and compaction equipment will also be introduced shortly, says. Mr. Varghese."
Fayat offered modular plants in 200-260 Tph class and mobile plants in the range of 120 to 160 Tph till 2011 end. Based on new demand pattern for equipment requiring higher levels of capacity and productivity, Fayat has now enhanced its products portfolio in India. The company will now offer mobile asphalt plants with capacity of 120/160/200 tph. While five models of modular asphalt plants with capacity ranging from 160/200/240/320/360 tph will also be offered to the sector. Moreover, in 2013, it also proposes to include high capacity continuous mixing plants, if the markets continue to be conducive to such technologies. All these plants are designed for recycled asphalt production (from 45% to 100%) and futuristic mixes.
"To meet the growing demand, we have already doubled our manufacturing capacities for various equipment and shortly India will witness a large investment in line with our global business model, informs Mr. Varghese." Marini offers over 50 different models of asphalt plants and soon professional contractors can benefit from this technology.
According to Mr.Varghese, the equipment score highly on technology. He elaborates, "Our plants are known for their productivity, reliability, performance, economy, and overall efficiency. Marini plants can perform unhindered under severe operating conditions and deliver as promised. Features on our plants like dedicated fines handling, rut arresting mix production capability, anti aging mixer unit, high mixing index coating unit, oxidation arresting bitumen systems, additive and deductive bitumen weighing systems, screened-aggregates online quality inspection facilities along with a very precise dosing and metering system ensure that asphalt mix produced on a Marini plant performs better and outperforms mix produced on every other plant."
The company claims that its plants are designed to perform and deliver over 50% additional productive life compared to contemporary product offerings. The products also claim to have a life span of at least 15 years and more, already proven on Indian turf. During 2010-11, Marini plants have recorded fuel savings of up to 20%, thereby drastically reducing carbon emissions.
Demand for Components
Growing demand synthesized by heterogeneous requirement, augurs well for the road construction equipment sector, as it will witness the introduction of newer equipment across categories for quality and timely completion of projects. However, it will be vital for equipment manufacturers to deploy equipment that provide commercial viability to contractors. Besides, sustained equipment support will be the key depending upon various job applications.