IECIAL Upbeat on CE Market Growth
What is IECIAL's overview of CE market growth in India for the next 2-3 years, in view of the national and international economic headwinds looming large on the industrial sector?
There is a regular news about the financial downturn and uncertainties in some of the overseas markets. Within India, the immediate concerns pertain to inflation and high interest rates. These factors together have resulted in some negative sentiments in the market. Having said that, the infrastructure agenda are top priority for the government today. The construction equipment market has grown over (after) 2010 and with strong basic fundaments in place, we can expect a 15% YOY growth in the construction equipment market in India atleast for the next 2-3 years.
IECIAL is a national point of reference for the Indian earthmoving & construction equipment industry. The Association was constituted in 1949 with 10 Indian companies that manufactured and imported earthmoving and allied equipment. In 1977, the secretariat of the Association was shifted from Mumbai to Delhi with an intention to interact closely with the central government departments on various policy related matters and put forward industry's viewpoints to the policy makers.
Most of the leading construction equipment manufacturers and distributors are a part of IECIAL and the activity level was raised in terms of regular interaction with the government, making the industry globally competitive, adopting state-of-the-art technology, etc. During the last two decades, the Earthmoving and Construction Equipment Industry has made enormous progress and grew both in size and diversity. Growth in the construction equipment industry in India is linked to the overall level of infrastructure development as well as growth in construction activities.
IECIAL now represents 36 companies that manufacture a variety of products. Almost all the local manufacturers are its members.
During Excon 2011, IECIAL proposes to organize a national conference on CE industry; what is the theme and focus of this conference?
Coinciding with Excon 2011, IECIAL will organize a two-day national conference on the construction equipment industry at the BIEC complex, Bangalore. The conference is aimed to provide a platform for construction companies, consultants, project authorities, concerned government organizations and technical experts etc. to deliberate on the present trends of applications of construction equipment in the industry, performance of specific equipment in the projects, requirement of state-of-the-art technology, customers viewpoint and case studies on application of equipment etc. The top industry officials are going to participate in this conference and there will also be a CEO forum. This will be a very interesting seminar for all concerned.
A section of the conference will be on ECE Industry: Vision 2020 and Beyond. The focus areas of the conference would be:
- Consumer's perspective on the products and technology available in the market
- Future growth of the earthmoving and construction equipment industry – Vision 2020
- Inclusive growth in the construction industry
- Perspective of the Government and regulatory bodies
- Supply chain management
- Viable financing models for the equipment and projects
- Leasing and renting of equipment
Do you think the entry of second hand machineries and products imported from low cost countries has been a challenge for the industry; what could be the corrective measures to offset this disadvantagefor domestic CE players?
Entry of second hand machineries is detrimental to a growing economy. Today, in absence of any barriers, there is a looming threat of such machinery being dumped into developing countries like India once they are superseded from the developed markets. Many of these products have high emissions and poor quality that affects the project development. Plus there is a safety factor which is compromised.
It's imperative that such products enter into India through a single port and are checked for quality, safety, emissions and other norms. Unreliability of such products is a huge loss for the customers as these machines are bread earners for them and a single hour of downtime results in direct monetary loss and projects are thrown off schedules as well.
Construction equipment industry in the country has reached a stage necessitating a critique on its strength, weaknesses, threats and opportunities. Will it not be a worthwhile task for the IECIAL to attempt a SWOT analysisto sensitize these aspects for better appreciation of CE industry profileand prospects as one of the most essential engines of infrastructure growth in policy making and implementations?
The construction equipment industry in India, in the midst of some ups and downs, has grown at a steady pace in the past few years. This has necessitated critiqu- es on the strength, weaknesses, opportunities and threats of the industry by the construction equipment manufacturers for them to remain abreast with the market conditions. The manufacturers at their end carry out the necessary analysis and present their outcomes to IECIAL. IECIAL helps resolve the issues that the industry faces and that are put up by the manufacturers. IECIAL through introduction of innovation and technology and through its various seminars/conferences addresses the concerns of the industry.
For the manufacturers and contracting companies, equipment leasing and financing could become a major business opport- unity for all times, particularly during the lean time. How can its current low financing volume and penetration be matched with the market size of CE?
Earthmoving and construction equipment manufacturers have tie-ups with the government finance institutions and non-banking Finance Corporations (NBFC). These tie-ups make it easier for the customers to get their machines financed. The finance companies are highly active and support the importance of construction equipment to infrastructure building in the nation. Even the nationalized banks that have greater reach throughout the country are providing finance for construction equipment. As the market grows, the manufacturers are continually working with NBFCs and other finan- cial companies to provide better financing options to the customers.
A number of finance companies have joined IECIAL as associate members.