Liebherr India High on Demand Fundamental. . .

Liebherr India High on Demand Fundamental. . .
German crane manufacturing major, Liebherr is much positive on market requirement of cranes in India based on firm demand fundamental. However, the company expects an availability correction for cranes during 2009-10 fiscal making it easier for project developers, both buyers and hirers of cranes with better deliveries, earlier prohibitive due to high demand on booming construction infrastructure activities, learnt Partha Pratim Basistha in an interview with Mr. A K Somani, Representative Director, Liebherr - Werk Ehingen GmbH and Head–Mobile Crane Division, Liebherr India Pvt. Ltd.

Potential Demand Areas: Despite financial difficulties and led by low liquidity, equipment take off is slow but demand fundamental of cranes in India is well–placed and backed by sound requirements from power plants, wind mills, industrial development, bridges, road construction and Metro trains. Future demand would be led by power projects, both thermal power projects and Nuclear power projects. The recent focus area is nuclear power. The other sector having high demand is wind energy. Government has placed a definite target to meet the power requirements for the 11th Plan and beyond, through ultra mega power project, hydro power projects, captive power projects and so on.

Demand is also likely to remain firm notably from other infrastructure projects consisting refinery projects as country’s requirements of oil is well poised to grow during the eleventh plan period and beyond. This is evident from the fact that demand has been led by big refinery projects under expansion and new projects under construction. Few projects are at advanced stages of implementation and are well likely to go for brown field expansion in the near future creating necessary demand.

Demand for cranes from steel plants and Metro railway transportation projects both the ongoing and newly proposed projects across the country. Except Mega projects having requirement of cranes for a long period, a large number of other projects will have requirements for short term and are likely to use crane from hiring companies. In view of this, Crane hiring companies would also lead crane demand.

Liebherr India High on Demand Fundamental. . .
Market Forecast: Demand is expected to remain modest during 2009, if not getting tapered off altogether. It is much likely by second half of 2009 that the actual spending capabilities of construction companies to execute projects would be transparent. Liebherr is optimistic that cash availability would be easier in the private sector. In the recent past, there has been slow off take of equipment by private project developers due to slowdown in project execution. Few Mega power plants to be set up by non-government companies and expansion of Steel plants have been delayed. Although there are very few cancellations of orders already placed for deliveries in 2009 and 2010 with equipment manufacturers, but most of the private buyers are in wait & watch situation till the general elections in India are over and policies of new government is known. They have been slow in making arrangements for payments to acquire the equipment. In current situation, it appears that the demand requirement will be led by government projects as they have targets fixed for timely implementation of their projects and have approved funds.

Equipment Availability
Liebherr India High on Demand Fundamental. . .
Led by lower inflationary pressures pricing of cranes are well expected to ease during 2009 across categories manufactured in the country. However, weakening of rupee could lead to acquisition of equipment beyond 100 tons expensive as the manufacturing in India is below 100 ton capacity crane only. Large corrections in pricing and availability of equipment of 100 tons and beyond is not likely to happen during 2009-10 as companies abroad have their order books full, resultantly making the delivery periods of equipment still ranging from 10 months to one year.

However, 2010 end is likely to see reversal of trend leading to firming up of crane prices once again in the higher capacity range. This is based on the well led assumption that project sizes across the globe will continue to become bigger and India will not be an exception, like thermal power project sizes are likely to go to 800 to 1000 MW, Nuclear Power Plants to 1000 MW and Windmills beyond 2 MW. Such projects will need cranes from 1,300 to 2,500 tons capacity.

The other area remaining unexplored is offshore wind Mills where India has large possibilities. India is already 4th Largest in the world in this field.

On the domestic front lower pricing corrections in 2009 are well expected to happen with increased availability of equipment below 100 tons across the range due to low off take of equipment from project developers. Pricing corrections would also be led by increased availability of used cranes from international market at a very low price. In 2008, used crane dealers demanded a very high premium for fast deliveries due to boom in construction Industries and new cranes having very long deliveries of 18 to 24 months. A large number of used cranes are also expected to return to the market from the developers, post completion of few Mega projects pulling down both buying and hiring prices.

Range of Cranes from Liebherr
Liebherr makes available cranes in India from their two plants in Europe. Liebherr-Werk Ehingen GmbH from Germany manufactures All Terrain Tyre mounted Cranes ranging from 35-1200 tons comprising over 25 models and Crawler Cranes from 350-1,350 tons. Liebherr-Werk Nenzing GmbH from Austria manufactures Crawler Cranes below 300 ton capaciy. These cranes are imported from their respective plants in Europe.

Competitive Products & Services
Liebherr would in no way compromise on quality of its cranes to reduce the price even when the Indian cranes market is witnessing acute competition due to sustained invasion by Chinese products. Owing to its quality, reliability and safe operating features Liebherr’s cranes command global brand equity. I would like to mention that under stringent project execution norms, based on the fact that the country is witnessing large number of projects, project developers are looking for quality products with reliable and safe performance, even paying a higher price.

Equipment Features
Liebherr India High on Demand Fundamental. . .
Liebherr’s products have well refined operational features. This ensures the optimum equipment utilization of the machine with minimum operationed costs. It has one of the most advanced safety systems it stops all dangerous operations in case of overload still allowing safe operation. This safety system at the same time is easy to operate. The operator can check critical parameters of crane from operation cabin itself. With latest systems, crane can also be operated by a remote control device. The most advantageous operational part of Liebherr cranes is that they are equipped with troubleshooting devices cutting down on machine downtime in case of any problem. Liebherr service office at Kolkata has each crane operational program in their office on their computer and can easily correct fault giving remedies over phone when the operator finds it difficult to rectify himself.

Liebherr organizes training for both operational and maintenance staff at its plant in Europe before dispatch and also at site during commissioning. Liebherr has a team of service engineers for cranes in India.

The service engineers of Indian office provide onsite training on operation and maintenance, supervision during commissioning, post commissioning service support, identifying parts requirement, arranging supply of parts, and so on.
NBMCW May 2009

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