Sales of construction equipment, a barometer of economic activity, is expected to increase in double digits in the ongoing financial year on the back of increased government spending on infrastructure projects, especially in rural areas, observes Deepak Shetty, CEO & Managing Director, JCB India.
With the Indian Government investing heavily in infrastructure development, what impact do you see on sales of construction equipment during 2023-24?
India is going to be a growth driver for the world in the coming decades, and much of this growth will come from infrastructure development in the country. There are projects of significant national importance that are gaining momentum across the country. Large-scale infrastructure development requires larger and more productive machines.
There has been a direct correlation between infrastructure development and equipment sales in the past. This year, we witnessed a slow beginning in terms of equipment sales due to reasons like the Russia-Ukraine conflict which disrupted the supply chains, and the steep increase in commodity prices which led to lower demand in the year’s first quarter.
However, with the government’s increased focus on the infrastructure sector, cooling of commodity and fuel prices, and resumption of supply chains, we are seeing a steady rise in sales of construction equipment. Current trends indicate that the rise in equipment sales will continue through the next year and the industry will see a growth of 15-20%. Among the people of the country, there resides a sense of faith in the India Growth Story owing to its political stability and policy reforms in the past decade.
How is JCB India gearing up to meet the forecasted demand?
JCB has remained committed to the India growth story for over four decades. From introducing the Backhoe Loaders in India in 1979, to the global manufacturing force the company has become today, JCB India has been making the nation and its communities stronger every day. With six state-of-the-art factories in India, it manufactures a wide range of world-class equipment, not only for India, but also for over 125 countries. Driven by constant innovation, revolutionary products, and adherence to global quality standards, JCB has sold over 3,50,000 machines - furthering the ‘Make in India’ initiative and steering millions towards empowerment. India is today not only an important market for JCB but is also the global manufacturing hub for the Group. Our focus on One Global Quality has led JCB to explore global markets on such a large scale.
The JCB Backhoe Loader continues to be a favourite for Infrastructure projects for the last 42 years since it is a versatile, easy-to-use, and easy-to-transport machine. It is suitable for government projects like the Pradhan Mantri Gram Sadak Yojana (PMGSY) and Har Ghar Jal in rural areas. PMGSY was launched to provide connectivity to unconnected habitations as part of a poverty reduction strategy. According to the latest figures, about 167 thousand unconnected habitations are eligible for coverage under the programme. This involves the construction of about 371 thousand km of roads for New Connectivity and 368 thousand km under Upgradation. The Har Ghar Jal mission is envisioned to provide safe and adequate drinking water through individual household tap connections by 2024 to all households in Rural India.
While the Backhoe Loader is an ideal machine to reach remote/rural areas, with new road development projects coming up in these areas, we are also seeing an increase in the purchase of Excavators and Mini Excavators. Projects of significant national importance are gaining momentum across the country. Large-scale Infrastructure development will require larger and more productive machines, and our recently launched new range of Excavators (JCB NXT 225LC M) addresses this need.
We are also observing an increase in government tenders floated to acquire construction equipment. The municipal corporations of big states like Maharashtra, Gujarat and Uttar Pradesh regularly acquire JCB machines. In rural sectors, Gram Panchayats across the country float tenders for equipment that is regularly fulfilled by JCB. Since JCB has a high market share in the sector, the demand for JCB equipment will increase accordingly. One in every two machines is a JCB and we expect that we will continue to support the government at the same level.
Is India’s CE industry being proactive in making machines with zero emissions, or autonomous machines, or smart machines with electrification & digitalization, or considering alternative fuels to save energy costs?
The Government has a relentless focus on the development of EV-compliant infrastructure across the country and the Construction Equipment manufacturers are looking at the viability of electric equipment quite seriously. However, we will require a robust infrastructure to support Electric Construction Equipment.
A private consumer expectation survey recently showed that around 66% of Indians said that electric vehicles will surpass petrol and diesel cars by 2030. For electric construction equipment, popularity will depend on manufacturers’ investment to develop smaller engines that can provide a powerful experience without compromising on the overall cost of the machine.
Right now, India is at the initial steps of the electric equipment revolution. Manufacturers need to focus on smaller machines to make the Electric segment popular in the Construction Equipment category. Such machines can work well in urban areas and indoor projects and also inside tunnels for hydro, metro, and road construction projects.
JCB India has been working on its ‘Road to Zero’ initiative for the past few years. Early this year we introduced the industry’s first fully Electric Excavator (JCB 19C-1E) at Excon, Bengaluru. JCB 19C-1E is a zero-emission machine and has four lithium-ion batteries that power the machine for a full day on a single charge. With a significant focus on safety and productivity, JCB’s 2GO system safely isolates all controls as a secondary safety system. Its auto-idle and auto kick-up redistribute power to preserve battery life. The machine has been introduced after rigorous testing and validation.
To bring in the next level of sustainability in construction, reducing waste or recycling it, has become a necessity. What are the practices or technologies being developed or adopted at your end (in manufacturing plant or machinery) to reduce wastage/preserve/recycle usable materials and to reduce / eliminate carbon emissions?
The number one item on our priority list is overall reduction of waste. Linked to this is the issue of single-use plastics which, for many years, has been a wasteful use of resources. We also recognise that they contribute to polluting our oceans, harming wildlife, and preventing recovery of valuable resources. We are currently working hard to research on elimination of single-use plastics and packaging in our business.
All JCB India manufacturing locations have taken up at least two waste reduction projects. This has helped to reduce packaging waste by 15% and we are all set to achieve zero single-use plastic usage soon.
Two of our manufacturing locations, Pune and Ballabgarh, have achieved “Zero waste to landfill”. This has been possible as the locations have started giving away waste to cement industries, who co-process the waste for their internal use. So, our waste becomes their raw material. This is a perfect example of circular economy wherein everything is utilized, and nothing goes out as waste. We continue to invest in Research and Development towards waste elimination and are hopeful of eliminating maximum waste in the coming years.