Road Equipment: OEMs See Extended Decent Returns Initially

Road Equipment

Buoyed by the recent announcements of the government to put road projects on fast track, road equipment manufacturers are contesting hard to convince targeted buyers for avoiding brand substitution. P.P. Basistha takes a look.

Finally, there is a sense of joy in the board rooms of Indian road construction equipment manufacturers after a prolonged gloom. Top sales brass across companies, share optimism on positive projected demand. They speak with a strong assertive voice on fresh trade enquiries from contractors across the country, looking to take up projects that were aborted earlier, owing to paucity of funds. The senior sales executives expect that the earlier tangles of land acquisition and environmental clearances leading to curtailment of the projects will now be sidelined. Major instances contractors backing out of the projects, discovering the bid amount on which they have taken up the work were unrealistic, post taking over the work would also now be sidetracked with the government showing its keen interest to put projects on fast track.

However, in between, making broad statements on the projections and enquiries, the senior marketing officials, slow down intermittently, sharing eloquently that, the fresh project off-take would not be possible without serious competition. This is because OEMs will get tougher, vying for space afresh in the market in its nascent stages of opening, followed by not so late dormant phase in the backdrop of protracted demand slump. Given the market network, the manufacturers have built over the years, product selling may not be too tough altogether, if the projections are found to be appropriate, however, getting decent returns on the products could be an issue.

Enquiries by NBM&CW with the road equipment manufacturers could not wholesomely gather the volume of inventories with them at present. However, couple of important contractors contacted shared their upbeat mood in getting some best bargains from the OEMs, indicating that the market continues to be in a large extent the domain of buyers with manufacturers busy in pushing out inventories. Not hard to find, amidst a lull market, reputed asphalt batching plant manufacturer concluded some big deals very recently. Contractors in the deal claimed to have got some good discount packages.

Abhijit Gupta
The trend makes it tough for equipment manufacturers to make decent margings on product sales. Mr. Abhijit Gupta, Managing Director, Case New Holland Construction Equipment, India says, we are expanding our Ex series expanding our product range with the EX Series of Backhoe Loaders, 1107 DX Soil Compactor along with carrying out key engineering improvements, so as to reduce total cost of operation of our customers. Further, to expand and retain our market presence, we are looking towards deeper market penetration." Along with eyeing the domestic market, we are now exploring on leveraging the India plant for exporting its product range to Asia Pacific, Africa, Middle East etc.

Case Soil Compactor
He continues, "Our new 1107 DX vibratory soil compactors, come with an operating weight of 11,300 kg and are powered by four cylinder 105 hp engine. They are high on fuel efficiency as well as productivity, provides better operator comfort and safety. Our other Compactor product includes, the versatile, reliable 752-8 tons asphalt vibratory compactors and 450 DX–3 tons mini tandem roller. All these products are manufactured at our plant at Pithampur in Madhya Pradesh.

According to Mr. Gupta, "Key to our product placement has been to reduce total cost of operation, notably through fuel efficiency and higher productivity. We will continue to build on our leadership position in the Compactor segment. To provide efficient service to our wide base of Compactor customers across the country, we have set up a CASE Customer Assistance Toll Free No 1800 3000 9770 and increased our dealership network to 59 dedicated CASE Dealers with over 200 touch points.

A M Muralidharan
"We will continue our well-known strategy of bringing down total cost of operation to the contractors, through our 9.8 tons double drum asphalt compactors, 11 ton soil compactors, 22 ton pneumatic tyre rollers and 5.5 meters and two models of 9 meter pavers to build up our presence among the road contractors. Based on our sole distinction among other manufacturers to offer complete range of products, required from the initial stage of road construction till its completion, we will have to retain our existing customers as well as leverage our market presence by offering packages," says Mr. A.M. Muralidharan, President Volvo Construction Equipment India. Volvo CE manufactures its road construction products at its Peenya plant in Bangalore, barring the two models of 9 meter pavers which the company imports from Germany.

Volvo Soil Compactor
However, he concedes, "Based on the emerging trend of earthwork compaction getting subcontracted in the main projects to individual small contractors, we are also targeting the retail and rental segment for volume sales. Based on the approach, we are looking to leverage our position to second position in soil compactors at par with double drum asphalt compactors. We aim to build our brand presence through our compactors, delivering better compaction forces powered by advanced 76-100 hp engine with 5-7 percent fuel efficiency."

Complementing with localization of the products, to make them affordable, Volvo CE has been carrying out engineering improvisation for making its products attuned to Indian road project sites. Mr. Muralidharan informs, "To make the machines perform optimally, we are carrying out tropicalisation of our compactors and pavers. In order to take care of spurious fuel, an added filter has been provided in the engines."

Volvo CE will bank upon its 18 dealers to promote fresh products as well as to provide product support to its 5,200 units of compactors working in the market. The Swedish entity provides remanufacturing support through upgradation of the hydraulic systems in its road construction equipment.

Product positioning & support requirement

While manufacturers are looking forward to promote volume sales based on the range of offerings to suit the emerging demand requirements, brand retention will largely depend on addressing the emerging complexities of the road construction projects in India, through the equipment offerings and product support.

As plant and machinery constitutes 6-10% of the investment component for typical road construction project, contractors are of the view that OEMs can add value to the business by making them run the plants efficiently. This is more so in present period of compressed margins and escalation of project cost. Though OEMs have no jurisdiction to curtail project cost escalation due to various external factors however, there is a definite room for fine-tuning the plants to the expected site conditions, so that chances of putting extra finance in operations are kept minimal.

Hiten Kapadia
Atlas Copco India will emphasize on optimum running of plants through requisite support. Mr. Hiten Kapadia, Business Head, Atlas Copco says, "Training and development of our service team and dealers is a continuous process. They undergo training and refreshment course at regular intervals. We have also started "one number concept" for all supports and complaints in order to have a better control of the situation. Our engineers are also trained on major sub assembly like engines. We refer to the engine manufacturer only for critical problems."

Dynapac Soil Compactor
Atlas Copco which acquired Dynapac brand of road equipment few years ago offers soil compactors between 4 to 27 ton class, asphalt compactors between 1 to 18 ton, pneumatic tyre rollers 6 to 27 ton, paver finishers 1.8 mts to 14 mts and milling machines. The company is looking forward for enhanced business volumes through its Dynapac SD2550CS paver equipped with the new Dynapac R300TVE rigid screed. According to Mr. Kapadia, "The machine offers higher paving capacity with lowest cost per ton. Together, the Dynapac SD2550CS paver and the Dynapac MF2500CS material feeder make a great paving team, meeting the needs of contractors, communities and rental companies around the world. The superior screed system and the new version of the intelligent Pave Manager 2.0 control system contribute to the highest mat quality."

Mr. Kapadia informs, "Our R&D team has carried out improvements on the new paver, focusing on enhanced operator comfort, advanced control systems, for delivering the highest quality and total cost of ownership."

He elaborates, "The Dynapac SD2550CS offers come with a new dashboard. Ergonomically positioned and designed based on recommendations from operators, it creates easy to understand analogue signs in a digital display. To make work easy for screed operators wearing gloves, the smart screed remote controls also have toggle switches for screed extensions and levelling cylinder function.

The easy-to-learn and operate intuitive dashboard is equipped with a camera system. This offers a 360 degree view, giving the operator even greater control over the paving job by monitoring the process on a high resolution display on the dashboard. The upgraded Pave Manager 2.0 operating system, with colour display, offers an improved operator interface as well as additional features. The new version incorporates direct access buttons to key functions on the main dashboard, improved display of screed control as well as additional paving functions."

He continues, "The other improvements include, equipment flexibility for achieving desired job quality. SD2550CS is suitable for highway paving up to 14 m, with a theoretical production capacity of 1,100 t/h. The heating system with a 60 kW generator and the screed heating system ensure faster heating up to the full working width. The big hopper (2.6 m deep with 15 t capacity), a 1.3 m wide material tunnel and a 500 mm diameter auger system provides the smooth material flow required while paving wide sections. The paver is also available with a big material hopper and, when used together with the new Dynapac MF2500CS material feeder, the paving performance can be 30% higher."

Dynapac Road Construction Equipment

Mr. Kapadia says, "To meet varied job sites requirements of the road contractors, number of screeds can be fitted to the Dynapac SD2550CS paver. This includes, the Dynapac V5100/6000 TVE (tamper vibration) screeds, V5100/6000TVH (high compaction) screeds as well as the Dynapac R300TVE rigid screed." Mr. Kapadia explains, "R300TVE is a tamper vibration rigid screed with a basic width of 3 m that can be extended with mechanical extension boxes up to a maximum width of 14m. In order to operate with variable paving width, the screed can also be offered with hydraulic extensions at the end, which are 1.3m wide and would extend to 2.6m maximum width. This screed is designed to offer a smooth surface finish owing to its rigid construction." Enhanced business volumes are also looked by Atlas Copco through its Dynapac PL350, PL500 and PL1000 which are compact cold planers having milling widths between 0.35 to 1m. Mr. Kapadia informs, "Available as 4 wheeled units, these models are highly user-friendly and offer high performance, excellent manoeuvrability, and an impressive level of reliability. Dynapac compact planers effortlessly achieve a depth of 200 to 300 mm. Powerful engines deliver higher output than engines of planers in similar sizes."

He continues, "The planers are well positioned in terms of providing best operators comfort with their ergonomic design. Controls and instrumentation are positioned facing towards the operator for ease of operation and all-round visibility, particularly for viewing the cutting areas. User-friendly control concept guarantees fast response times and high performance operation. This is important for patching work, when the operator has many small, independent jobs to handle.

The patented hydraulically operated front sealing of the cutter housing, adapted to the shape of the cutting drum, minimizes accumulation of the milled material, thereby reducing labour time at the end of the cutting track."

The other features of PL350, PL500 and PL1000 planers according to Mr. Kapadia are, "Flexible quick-change system for drums, four wheel operations, small cutting radius of only 230 mm, allowing the machines to perform at crammed job sites and ease of maintenance." He points out, "To make the planers numerous for varied applications, we have made drums available for demarcation work. Smaller drums with an adapted scraper blade and a side cutting wheel are available as options for both new models."

Mr. Kapadia says, "The Dynapac machines are designed for toughest conditions and have lowest operating cost. The compactors have most advanced compaction technique like high frequency. Our asphalt rage rollers are capable of delivering required quality in minimum passes. The pavers are equipped with unique fully floating screed to achieve the specified surface finish."

He says, "To make ownership and operation of the plants economical for our customers, we have been emphasising on innovation and development. This has been dually through promotion of products from our global portfolio by making them attuned to suit Indian requirements and also through sourcing of plants from our local plant at Nasik." The company has a refurbishment centre in Pune to support its entire range of Dynapac road construction equipment. The products are delivered from the company's manufacturing facilities in Sweden, Germany, Brazil, China, and India.

Ramesh Palagiri
Wirtgen India is banking on product positioning to build up presence in the freshly reopening road construction sector. According to Mr. Ramesh Palagiri, MD, Wirtgen India, "Further to the production of Soil Compactors, we launched the Tandem Roller for the Indian market. We would shortly commence with the production of our Vogele range of Pavers as well as the Kleemann range of crushing and screening equipment." He mentions, "Products to suit the demand of the Indian market are indigenously manufactured, with localisation component of around 70%, so as to ensure cost effective and competitive product offerings."

32085-Hamm-HD99-TandemCompactor.jpg
Mr. Palagiri says, "Our range of compactors are equipped with Intelligent compaction system and are designed to achieve optimum compaction with minimum number of passes to reduce the overall operating cost which is of vital importance for Indian contractors."

He adds, "Our Hamm compactors can also be offered with intelligent compaction systems like Hammtronic and HCQ system as an option."

Expanding its product range for wider market accessibility, Wirtgen has recently introduced the Vogele Range of Dash 3 Pavers for road construction. Mr. Palagiri says, "These innovative & eco-friendly asphalt pavers are based on user-friendly Vogele state-of-the-art technology. The machine concept of the "dash 3" generation focuses entirely on "lower consumption – lower emissions – lower costs." The "VÖGELE EcoPlus" low-emissions package combines a number of individual measures distinctly reducing the fuel consumption and noise of "dash 3" pavers."

Mr. Palagiri says, "Ensuring our products are economical to own and operate and deliver the desired quality, we provide total solutions to our customers, once a machine is sold, right from Commissioning the machine, be it a slip form paver, a recycler soil stabiliser or asphalt paving, depending on the nature of the job. We have "Application Specialists "at our Project sites to work closely with the project managers and supervisors. This ensures a maximum output from our machines." Wirtgen will be shortly extending its Reman support to pavers, which was restricted only to surface miners.

Amit Gossain
Looking forward to expand and strengthen business presence in cyclic road construction sector, JCB India has recently launched the VMT 330 tandem roller. According to Mr. Amit Gossain, EVP-Sales Marketing & Business Development, JCB India "VMT 330 is a highly versatile machine with high compaction forces and drum offset design. It is ideal for compaction in restricted spaces as this has got high kerb clearance. Also, the vibration system and articulated joints are maintenance free. VMT 330 roller provides saving up to Rs.1.10 lacs in 3 years."

Mr. Gossain says, "our intention has been to make available road equipment attuned to the Indian road site requirements. JCB's 9T Tandem Roller VMT 860 is designed to offer high productivity and reliability with maximum operating economy. Powered by robust, fully topicalised, low fuel consumption JCB Engine ecoMAX, the ideal combination of static weights, centrifugal forces and amplitudes makes this asphalt roller perfect for a wide range of both soil & asphalt applications, from rolling sub-base to finish rolling."

JCB VM Soil Compactor
He elaborates, "VMT 860 has been specially designed keeping in mind the tough Indian working conditions. This new generation road roller comes with maintenance free lifetime lubricated central joint. It is also equipped with two water pumps, each pump capable of sprinkling adequate water on both the drum surfaces. The roller has unique operator platform with ergonomically located controls and rotating seats that make operation very comfortable. Owing to its excellent maneuverability and a compact design, VMT 860 compaction rollers are also ideal for a wide range of workplaces, including yards, access roads, residential streets, car parks, roads, highways and airports."

Catering to applications for highway construction, dam sites, canals, land development, runways JCB India offers VM 115, 11T single drum soil compactor. Mr. Gossain says, "VM 115 is designed to offer high compaction and greater output at the lowest fuel consumption within the category of machines. It is powered by turbo charged, water cooled 4 cylinder JCB ecoMAX engine, generating output of 114 HP. The VM115 Compactor develops high amplitude for deeper compaction, an optimal centrifugal force for a higher density and correct frequency range to get the best re-location of the soil particles during vibration."

To expand its presence in road construction business, JCB India will bank upon its 59 dealers and 600 outlets stocking products. Mr. Gossain says, "To ensure that prompt service is provided to our customers, our dealers run a service van which offers 24x7 assistance to our customers in case of a machine breakdown in any part of the country." He adds, "Based on our dealership network, our objective will be to make further market penetration and be closer to our customers."

Cushioning Effect

Marini Asphalt Batching Plant
While earning smart profits is an issue many manufacturers are pondering with, getting volume sales may not be an easy task altogether. This is because the emerging demand gap is most likely to be filled up by the existing fleet in the market. With margins of contractors remaining compressed and release of payments still getting extended in many cases, there is likelihood that contractors may extend concrete decision to procure newer units.

Blesson Varghese
Taking cognizance of extended procurement, we will be looking for newer application areas of our compactors and pavers, to deliver a great value for money for our customers and also to promote sales," says Mr. Blesson Varghese, MD, Fayat India.

He explains, "Being the leader in the Industry, we will refrain from entering those areas where product placement based on rudimentary technology is high; instead we intend to bring high technology for quality conscious and productivity seeking contractors. Technologies like Bomag intelligent compaction which is GPS enabled optimizes operation. It stores operation data and allows the operator to rationalize normal operations and ensures best in class compaction and data recording. Based on our Bomag 'Ecomode', we will target special application areas & projects where better stability is required by the compactors. The contractors using the compactors will get appropriate quality with better fuel efficiency."

According to Mr. Varghese, "Post launching of our total high-tech range of Bomag machines involving rollers, milling machines and pavers at bC India 2013, we have a wide range of products for India. Our range is almost complete now in India from asphalt batching plants to pavers - compactors and maintenance equipment. The 800 tph pavers with upto 12 mtrs screed size deliver 98% compaction, highest in its class as compared to offering from other manufacturers." He mentions further, "We are well positioned to cater diverse paving requirements based on our offerings of 5-7.5-9 meters pavers. The pavers are engineered to pave normal asphalt mix as well new age mixes in trend these days, delivering best in class efficiency, productivity and performance.

Existing Fleet as Barriers

Backed by the positive business sentiments of projects taking off-road equipment manufacturers have drawn projections of demand for pavers and compactors picking up full scale by end of 2014.They argue, the lull period with extended payments of the contractors has led to manifold rise in actual use of the existing fleet in the market, which will pave way for fresh fleet acquisition by the contractors. However, it will be interesting to see what will be the pace of fresh off-take as the size of existing fleet, which is not small, is likely to provide a barrier for the new equipment to move to the contractor's stable at least in the mid-term.
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