Foundation Equipment Manufacturers Resort to Market Consolidation

Foundation equipment manufacturers are consolidating their market presence as demand gets curtailed from the infrastructure sector, P. P. Basistha reports.

Tardy execution in greenfield infrastructure projects have been curtailing orders for fresh delivery of foundation equipment. Slow growth in power sector and other core infrastructure projects have brought down demand of piling rigs. According to the industry estimates, the market size of foundation equipment in the country for 2012-13 is expected to be 35 units down from 60 units during 2010-11. Though the industry expects the lull in demand for the short-term, they are positive on the mid-and long-term demand, given the firm demand fundamentals of the infrastructure sector with the visible silver lining on the horizon from large number of upcoming metro projects across the country. However, manufacturers perceive that any significant demand recovery from core infrastructure sector areas, precisely power and steel, that require larger number of foundation equipment owing to the bigger volumes of piling jobs, as compared to other infrastructure projects, will only materialize by addressing macro issues like environmental clearance and special status to piling jobs.

Lower demand of the foundation equipment is well expected to make competition rife among existing players as the handful of existing manufacturers will now increasingly look to retain their market presence albeit looking to promote sales. Lull in demand dovetailed by competition is likely to hit bottom lines as led by low demand base, the manufacturers will have to resort in importing the expensive equipment.

Key strategy for Soilmec to expand and retain its market presence in India during the lull period would be through its sustained emphasis to roll out cost competitive products taking into cognizance rising project costs amidst compressed job schedules. Soilmec has been manufacturing wide range of tool kits at its state of the art 25,000 square ft factory in Vasai Maharashtra set up in 2008. The manufacturing facility makes BTM-100-mixed bentonite and water, rock bucket, soil bucket, kelly bar, casing, centrifugal bucket, bentonite mixer, soil and rock augers.

Expanding its range of product variants, the factory has also begun recently producing new range of tools, comprising belling bucket, grab bucket, core barrel (rock roller mix), 2.4 metre diameter tools and other substitution components for rigs.

According to the company sources, “Soilmec’s products are industry oriented products done through complete change in production systems ever since in 2006.Customisation amidst retention of quality standards and affordability is ensured by subcontracting production of fabricated steel to technically skilled vendors while maintaining designing testing and assembling in house. Gradual improvement in production systems has allowed us to produce more complex machines at affordable costs.”

Sources mention further, “Soilmec’s key ingredient for its accomplishment in India has been its strong and valued customer support. Total customer support for high equipment uptime is ensured through technical support in form of operators training to sustained after sales assistance, from prompt supply of parts to technical problem rectification, even under critical job site circumstances. We deliver parts to the job site within the span of 48 hours, materialized by the wide sales and support network across the country.”

According to Mr. Nitin Jajal, General Manager, Mait, “low demand and competition leaves manufacturers with no other option but to explore every possibility to consolidate market presence.  We will strengthen complete back up service support to our population of 560 employed rigs through our engineers stationed across the country. Customers training will continue to be high on the agenda.” Mait India expects to strengthen its support to the working equipment through its new Navi Mumbai warehouse facility housing inventories worth more than Rs 10 crores. The company is planning to lessen the delivery period of its rigs by importing them through free trade zones.

MAIT also plans to make available on priority delivery diaphragm wall kit required for underground metro as well as marine jobs. This kit can be mounted on existing MAIT Rigs within few hours.

Making the piling rigs available at economical rate is a major challenge for piling equipment manufacturers in India. This has in fact been a major reason for lower percolation of equipment in the construction sector, which has kept the demand base modest. Low penetration is also believed due to lesser specialization among contractors to solely take up piling jobs in India as compared to other European counterparts. Paradoxically, the situation has not undergone major change in recent years despite good number of jobs released that have piling requirements across various infrastructure sectors.

Manufacturers are looking to bypass the situation by targeting special projects through offering value on equipment in turn driving sales. According to Mr. Amitabh Kedia, Director Sales, Bauer Equipment India Private Limited, “having edge in our equipment over other offerings, we are looking for specialized projects in the country, comprising bigger dam and bridge projects, where foundations have to be undertaken in tough ground conditions.” Bauer’s equipment are working for a dam project in the Himalayas.

He affirms, “scoring above others, our rigs have been accepted by Chennai Metro in constructing its underground stations. During the construction of the diaphragm walls, our trench cutters were used to penetrate the hard rocks.”

Mr. Kedia says, “while we will be looking for special projects, support to our existing equipment will continue to be there. The German rig manufacturer has a population of 70 piling rigs working in the country. Bauer will expand its foot print by opening up regional offices in different parts of the country across the span of a couple of years.” The company has opened up a workshop in Mumbai to undertake repair of its rigs.

Potential on Value

Foundation equipment manufacturers are of the opinions that demand base is likely to remain at similar levels for next few years. However, they agree that demand potential of the equipment will depend on emerging newer requirements, which has to be fulfilled through valued products offerings. Rigs and tool kits will have to be placed that can work on deeper piles, based on requirements as well as on bigger diameters.

According to manufacturers, Ahmedabad Metro project will require rigs having diameter of 2 2.5 metre diameter working at a depth of 42 metres. Upcoming metro projects in Jaipur and third phase of Delhi metro are well expected to have requirement of rigs with bigger diameters and deeper piles. Real estate construction project of Supertech Nova at Noida near Delhi is having a piling depth of 60 metres. According to Mr. Kedia, “the advantage of single bigger diameter pile is that it can replace four piles in bridge construction, as used conventionally while building the pier, ensuring the work is completed safely and at a faster pace.”

Newer potential leaves room for business development for rig manufacturers. Revathi Equipment will look to promote mini piling rigs in a bigger way; it is marketing for Tescar of Italy in India. According to Mr. Shashiprakasha, “the mini piling rigs having diameter of 400-1200mm with depth of 15–28 metres are currently at a concept selling stage in India. However, the equipment have a big usage potential in India for working in restricted spaces, working with in already constructed building, carrying out foundation on loose soil, small flyovers, bridge construction, pole erection for railways and restoration of buildings.”

Similar views are shared by Mr. K. Ramkumar, Proprietor, Piling- Associates. He says, “heteroge neous soil conditions in India and construction projects will require different variants of tool kits and piling methods.” Mr. Ramkumar cited example of Paradip Oil Refinery being developed by Indian Oil Corporation, where expanse of the project and geological conditions necessitated deployment of different variant of piling tools. Piling Associates is the exclusive distributor of driven pile equipments manufactured by Foundation Associates Engineering pvt Ltd of Singapore in India. The company also distributes sheet piling and driven piling machines from various Chinese companies in India. It provides one year warranty on the equipment.

Requirement of heterogeneous piling solutions augurs good for foundation equipment manufacturers.