“Current Procurement Trend is to Match Operational Requirement”
"15-20 years of proven product range will dominate the market because of low break down, quick service and spare parts, long durability and better resale value," - Mr. P. V. Ramdev, Managing Director, Everest Engineering Equipment.
Procurement trends
The Indian construction equipment market is expected to grow at 12 per cent CAGR to $4 bn by 2017. Along with this, the material handling and access equipment markets are also expecting some exponential growth.
Commenting on the current trends in procurement of tower cranes and passenger hoists industry, Mr. Ramdev, said, "Current procurement trend is to match the operational requirement with minor technical specification given by the site management and concentrate to get the lowest price."
Points to be considered
Today, the tower cranes and passenger hoists markets are flooded with options. A number of players are competing in terms of pricing, productivity, localisation, after-sales support etc. However, Mr. Ramdev suggests that a buyer should carefully look into the elaborated technical specifications of each part while deciding buying high-value equipment like tower cranes and passenger hoists. He said, "Material of construction, sizes of structures with thickness, degree of protection of motors, details of mechanism, details of safety systems with its make, details of electrical parts with make, surface preparation and painting or galvanising are some of the parameters a buyer should validate."
According to him, "A potential buyer should also make a visit to manufacturer's factory or any working equipment at site to assess the quality, safety and reliability of the desired category of equipment. The buyer should also ask the opinion of some existing users about the break down, after-sale services, availability of spare parts and its cost."
"Power consumption, foundation erection cost and yearly maintenance cost are some of the major factors a buyer should consider before making a decision of buying construction equipment," Mr. Ramdev observed.
He suggests, "Buyer should ask buy-back price after 3-4 years of usage to understand the supplier confidence. Also he should assess the second-hand market price after the site usage or after 5 years."
Procurement decision drivers
Rent or buy?
Mr Ramdev lists some factors to check while making decision on whether to buy or rent:
- To buy new equipment needs huge money to invest which should be affordable to the buyer or paid by the client. Buyer has to add the rate of interest on the landed cost of the equipment for the entire tenure. Then reduce the re-sale value of this equipment after the working tenure from this total price. This will be the final cost of equipment to the buyer.
- For the rental equipment, buyer has to calculate the rental rate for total working months. This will be the total rental cost.
- Mobilisation, erection and dismantling, foundation cost etc. will be same for both the cases.
- From these two options, a buyer can find out the best economical option to go with. The rental equipment is normally considered for a period of 12-18 months and below. It is better to buy if the tenure is more than 12-18 months, and sell this equipment after the usage if required. In this case, the resale value and demand on proven brand makes an important role.
Everest Engineering Equipment is associated with SYM tower cranes, a 65-year old company with a history of Potain joint venture, and GJJ passenger hoist, a 22-year proven experience all over the world. These brands can offer any type of tower cranes and passenger hoists according to site requirements.
In India, development of high-rise buildings of above 50 floors has recently been started. So these equipment are very critical for a height of 200-metre and above height mainly because of safety and reliability factors. "SYM tower cranes and GJJ hoists are most economical, reliable and extremely safe equipment with very high speed of operation. They can offer any type of equipment with many variants according to site requirement," Mr Ramdev claimed.
NBM&CW October 2015
