Projections: Crushing & Screening Equipment Business

Crushing & Screening Equipment

Views of important players in crushing & screening equipment business were sought by NBM&CW through a Questionnaire. Their response are contained in the report. The participating companies appear to be quite optimistic about the future business of around Rs 4000 crore in the next 3 years for crushing and screening equipment. Product customization, quality and services would be in focus felt the participants. For the healthy development and future growth of crushing and screening equipment segment, the captains of the industry look for enabling business environment to be created. Also regulation must be well–defined and structured and tax regime rationalized, is the call from the prominent players.

The global recessionary trend is waning very fast, the construction equipment market is sure to gain a lot from this encouraging scenario. What are your projections for the Crushing & Screening Equipment market in short– terms?

Sandvik
Mr. Raghavan Ramaswamy: India's infrastructure industry has the biggest potential for growth and opportunities for investment. We notice that the construction industry is on the rise and this would have a significant impact on the Crushing & Screening Equipment. We foresee a positive trend in equipment purchase with more small players entering into the aggregate industry as well. First quarter of 2010 has given enough evidence on the same.

Crushing & Screening Equipment
 
Crushing & Screening Equipment

Mr. Niraj Srivastava: Market is booming and the construction industry expects to achieve 40-50% growth in the calendar year vis a vis 2009. This pace is likely to continue 1-2 years down the line.

M.D., Proman
Mr. R. S. Raghavan: Crushing & Screening Industry is matured enough now and there are lot of new players in the market making it more competitive. However, there will be fewer players who can offer total crushing and screening solutions. Market is robust and will continue to grow in the next couple of years. A total solutions provider combined with the latest technology offering will help manufacturers to grow progressively. We at Proman manufacture and supply world class crushing and screening equipment. These include a complete range like LIPPMANN range of Heavy Duty Jaw crushers, PROcone – Cone crushers, REMco Vertical Shaft Impact (VSI) Crushers, ORTNER sand washing systems, Finedoor screens and feeders.

PROMAN has flexibility in the form of PROMO series mobile crushers and PROMAN-Striker range of Tracked Machines.

Terex Finlay
Mr. Jaideep Shekhar: We now see improvement in the overall market sentiment combined with the launch of new projects. In the last three months, we have noticed increased  activity in the Crushing & Screening Market and expect the trend to continue for the rest of the year and catch up with pre slowdown activity levels.  Long–term with increased focus on infrastructure by the government, we hope that India would become one of the biggest markets for the Crushing & Screening products.

Mr. V. Senthilkumar: Yes, the recession is over and the infrastructure segment is looking good. The government has announced some attractive schemes and packages in addition on to allocation of special budget. It has been projected around 4000 crores in the next 3 years for the crushing and screening industry. We would like to take a good share based on the present projections.

M.D., Nawa
Mr. G.N.Raju: We seeing global trade booming once again. It is recovering very fast. While emerging markets like China and India gave the needed acceleration, the developed countries too got on the road to recovery. The construction equipment sector is once again looking for a 'never before' boom, expectedly during the next decade or so.

The crushing & screening equipment manufacturers - commonly referred as aggregates industry – having gone through a very hard recessionary FY 2009-10, are looking with a great hope as the signs of market picking up are clearly visible. The driving force for the manufacturing sector dealing with crushing & screening equipment is optimistic to do well in the current FY on par with the year before i.e. 2008-09.

Crushing & Screening Equipment

With all its democratic institutions, banks and public and private enterprise deeply committed to the country's economic development, India's infrastructure growth is unstoppable. The expanding economy would generate its own resources for the growth plan. The total investment in infrastructure sector is expected to be Rs 45,000 billion in the 12th FYP – almost double compared with that of 11th FYP. This kind of country's rapid growth and economic expansion should put the equipment market on an exponential growth curve in the 12th FYP.

In your view, what propels the market in India – price, quality or brand?

Mr. Ramaswamy: There is still a low level of mechanisation and limited use of modern technological equipment, plant & machinery. However, we notice a trend towards change. All this while, price has been a major criteria towards purchase of equipment. Time bound projects, specific quality requirements and influx of multi-national organisations in the industry has changed and will continue to change the trend towards more technology based equipment with higher levels of quality.

Metso
Mr. Srivastava: Well, all the three are important aspects; a brand is built based on quality. Yes India is a price sensitive country but Indian market is awakening to the concept of "Life Cycle Cost" where in a better Quality & Support associated with a Brand results in better reliability, higher production & improved quality of finished products which results in a better earning potential for the end users.

Mr. R. S. Raghavan: Price does play an important role but the right quality always breaks the price barrier. Some Indian companies like PROMAN have created awareness and are very visible brands. At PROMAN, we firmly believe that Quality is an attitude not a Cost !

Mr. Jaideep Shekhar: Indian customers are mature while making their purchase decisions. Now we see more customers appreciating the quality aspect of the products. The customers want world–class products at the right price and we at Terex work together with the customer to deliver the right product at low life cycle costs. However, we still have a portion of market segment wherein sometimes customers prefer low cost products over better quality.

M.D., Propel
Mr. Senthilkumar: The market in India is driven mostly by passion for good quality equipment rather than price and brand. We at PROPEL, will be taking advantages of this passion and make PROPEL brand a name in the Indian crushing industry. There are different customer segments and we are targeting the organized sector. The unorganized sector needs to be educated to go in for quality equipment. We also expect the government to make the rules strict for aggregate sizes, which the primitive crushing equipment may not give.

Mr. G.N.Raju: The market for crushing & screening equipment is mostly generated by infrastructure construction - which involves building roads, airports, bridges, highways, power plants - notably the road and highway projects.

According to reports from Ministry of Road Transport, the road & highway building across the country is in for investment of about Rs 1800 billion to Rs 2025 billion from private sources, in the next four years. That is close to Rs 450 billion annually. Most of the highways planned will be built on a DBFOT (design – build – finance – operate – transfer) basis. This is an ambitious investment plan and is going to propel the construction equipment market, specifically the road building and aggregate production machinery.

The price, the quality and the brand image – all three market shareholders will have their kitties full, if everything goes as per plan announced, in the next decade or so.

Product customization is becoming the main driver in product development strategy in the industry. What is company's focus on R&D supporting product development programmes in coherent with its different niche areas?

Mr. Ramaswamy: Sandvik's main philosphy has always been customer driven product development. All our current products and future products in the pipeline are based on customer needs and feedback received by us. We listen to our customers carefully. Entire organisation is customer focused and accordingly we believe in being close to them which is evident from the customer segment based structure we follow.

Mr. Srivastava: We customize products, which acts as a value addition for the customers by increasing the efficiency and productivity of the plant. Latest entrant in our portfolio are the Modular Crusing Plants that combine our knowledge and experience from across the globe. These plants are capable of handling large capacities and have great advantages in set up and relocation time besides having huge flexibility when our customers plan to ramp up.

We recently also added value offerings in portable crushing plants with onboard automation. The other offering is for sand traps that.

Our factories at Bawal, Haryana and Alwar, Rajasthan are emerging centers of excellence within Metso. Continous improvement in technology and designs are the hallmark at Metso. Our Crushers and screens are built in France and Finland but are customized to the configurations needed by our customers in India. Our offerings follow a solution based model derived from the input and output specifications of the customers operations.

We provide pre engineered customization anticipating the market, designing the Plants through studied application for the customers requirement based on the input and expected output. We lay more emphasis on customization of the product catering to the specific needs of the customers.

Crushing & Screening Equipment

Crushing & Screening Equipment
Mr. R. S. Raghavan: PROMAN has collaborations with the world's best in the industry and we have the advantage of launching upgraded products very progressively. PROMAN is known for providing crushing solutions, which are customized to the segment or industry.

Mr. Jaideep Shekhar: We are committed to deliver world–class products to our Indian customers with the maximum product customisation to meet the local demands. Our team of engineers at the Terex India R&D facility are working towards launching customised product offerings for the Indian market. As a company, we understand the importance of R&D in overall growth and have accordingly committed our resources in this area.

Mr. Senthilkumar: The industry itself is custom oriented and hence as per the customer requirement, we at PROPEL are in continuous development for the benefit of the end users i.e our customers. We at PROPEL mainly focus on user- friendly systems for all our crushing and screening equipment and plants.

Mr. G.N.Raju: NAWA is an indigenous company to the core. It started off with its R&D and developed its product portfolio of crushing and screening equipment and plants for construction, quarry (aggregate) and mineral industries. In a span of ten years, it achieved a phenomenal success in developing world–class equipment and systems.

For the mega road projects, the challenging task is going to be meeting the quantity aggregates requirements. NAWA has already come up with strategic technology partnership and equipment development programme. The most advanced and the world's best equipment – high capacity jaw, cone & VSI crushers and triple vibratory horizontal screens have been launched and demonstrated. NAWA is ready to build up to 750 TPH crusher plants to meet the compressed schedules of these mega projects.

Your company emphasizes tremendously on the aftermarket support, and elaborates on the uniqueness of the initiative.

Mr. Ramaswamy: For us at Sandvik, partnership is a concept with many dimensions. Aftermarket support is one of the key areas in our company.

Though we are a global entity, active in 130 countries, however, for customer's particular aftermarket need they will demand someone standing beside them. We have multiple aftermarket packages ranging from parts planning to a complete maintenance program. Thanks to our local presence, we understand their site requirements, which allow us to tailor each program to meet their unique needs, no matter where they are or how they operate. These aftermarket packages are designed to accommodate the customers resources. Big or small, any kind of material or equipment application, in remote locations or next door, customers will receive Sandvik's total service and support.

Sandvik Mining and Construction, in India has a vast network of warehouses across the length and breadth of the country. This enables us to be within the reach of our customers thus ensuring timely procurement and delivery of parts and services.

Sandvik has three Global stocking points – At Singapore, Eindhoven and Chicago. Sandvik's factories across the globe deliver relevant after market inventory to Singapore which is required to cater the needs to all the active equipment in that zone. Having Singapore as a Global stocking point has been a major advantage to India all since Singapore is very well connected with all major ports in India (i.e. Mumbai, Chennai, Hyderabad, and Kolkata). Since Sandvik is a major exporter as well as an importer, we are entitled to a special status in Indian Customs (ACP) so it results in fast custom clearance which ensures that our shipments reach its destination well within time.

Sandvik Mining and Construction in India has three major production hubs – Pune, Patancheru (A.P) and Chiplun (Maharashtra). Company's production units in India are adjudged as amongst best in the world in quality, delivery performance and cost through the Group's international benchmarking system. Major capacity expansions are ongoing for Crushing and Screening equipment and other products. Chiplun has one of its kind plants for recycling of Cemented Carbide for Sandvik Group. Our inventory system is online and transparent. We have direct access to warehouses of 13 countries to check for stock availability and thus it can be ordered through a multi–location customer order desk in India. This also facilitates accurate delivery and meeting customers demands in emergencies.

Mr. Srivastava: Metso offers value added services likes
  • The Health Audit (allows checking, observing equipment during operations, inspection of internal components and recommendations of spare and wears).
  • Metso Repair Facilities (bears replacements to complete refurbishment),
  • Parts support contracts (value based proposition, wherein parts for the equipment are agreed to be supplied over a period of time).
  • Service support Contracts (ensures the optimal health of the equipment, helps avoid downtimes, maintenance and plant audits are done on a routine basis)
  • Optimisation and upgradation contracts (systems are upgraded to incorporate latest features, process optimization to reduce costs, Retrofits enhances life-times of the equipment)
  • Annual maintenance Contracts (aims to achieve optimum availability of the equipment by deploying highly skilled personnel with the latest technology for equipment monitoring and maintaining equipment to achieve optimal utilization).
  • Operational and Maintenance Contracts (Metso Provides an operational crew for executing production and maintenance related activities Comprehensive offering which shows benefits of AMC and accountability for overall plant performance).
  • Training: Customer Training is an integral part of services, Upgrading the customers knowledge about the product to increase its efficiency and productivity.
Mr. R. S. Raghavan: PROMAN's emphasis is on customer process education right from the time of sale, the customer training in product and process, thirdly - proactive customer support. These are PROMAN's core strengths.

Mr. Jaideep Shekhar: With the start of our Manufacturing facility at Hosur, we have the abilities to support our customers within the shortest possible timeline. We have plans to start our local aftermarket warehouse at Hosur this year and also localise the components where possible. We also give great emphasis on the training programs both to our dealers and end users. We undertake site training classes for the sales and service manpower of our dealerships and also solicit active participation from the customers.

Crushing & Screening Equipment
Mr. Senthilkumar: We at PROPEL are now fully geared for after sales support. We are embarking on full training programs for all our customers in near future which will benefit the customers as well as PROPEL. We are also planning to conduct inhouse service schools which can cater to our customers as well as our competitors customers. This initiative will be the first of its kind in India.

Mr. G.N.Raju: Our after-sales service and parts support to the customer is unique in nature. The focus is more on partnering the customer, rather than commercial gains.

We have devised programs to support the customer needs, either service or parts, right at his doorstep. We station our service personnel at the customer's plant and make available instantly the spare parts stocked at plant site to the operating personnel. The customer saves downtimes and production losses. We go one step ahead and take complete operation and maintenance responsibility, crush and produce aggregates needed for his project completion within time schedule. The customer is able to completely focus on the actual construction activity under this unique and extended support by NAWA.

Crushing & Screening Equipment

What are the critical policy issues plaguing the CE industry in India that need to be addressed on a priority basis? Also how do you propose to tackle them at the macro as well as micro level?

Mr. Ramaswamy: There is a definite need for more transparent and consistent policies and framework for the industry. Regulations must be well defined and structured. Designed to facilitate the users. Most importantly, a regulatory frame work on specifying the various equipment at uniform standards. There should also be an independent monitoring agency to monitor if the regulations are not followed.

Mr. Srivastava: The Government should be more strict towards pollution control norms It must lay more emphasis on manufactured sand than river sand for environmental reasons. The NHAI Committee should be more strict towards product quality. NOC for land lease is time taking and projects are still taking a long time even after the financial closures for NHAI. Eighty percent of the land should be acquired for awarding any road projects delay in this leads to delay in awarding any road projects. Fund availability to the medium sized contractors is necessary. The government should take controllable measures towards such things.

Mr. R. S. Raghavan: We have inequalities in taxes and duties vis-a-vis imported equipment or due to being in a particular State. GST introduction might sort out the tax waiver. We need to have a level playing ground on the duty part wherein some equipment still get duty exemptions even though there are good quality manufacturers locally. We are addressing it at various Government levels.

Mr. Jaideep Shekhar: One of the main issues hindering the growth of the CE industry in India is the lack of access to easy financing options available to the customers. The cost of equipment financing is on the higher side which sometimes acts as an entry barrier to new and small customer segment. There are quite a few NBFC's working in India, however there needs to be policy change to promote these NBFC's active in CE Financing.

Mr. Senthilkumar: The critical areas are mainly the import duties which the government can consider to reduce. Also for portable plants, in few states, there are restrictions for movement which can be made uniform as these equipment are part of infrastructure development of the country. Although as a equipment manufacturer, we strictly follow the norms for transportation still there are issues raised by the RTO authorities while crossing the borders or check posts. We are already taking up this matter at the highest level so that a proper solution is derived. This will help not only PROPEL but also our competitors on all india basis to serve the infrastructure industry better.

Mr. G.N.Raju: The critical issue facing the manufacturers of CE is spiraling input costs. The steel is the main raw material involved. The prices of steel are now a days are unpredictable and steel producers hike steel prices almost daily. This causes an adverse impact on the profitably and finance position of the machinery manufacturers. There should be a regulatory authority to fix the steel prices on a periodic basis, so that production costs vis-à-vis the CE sale prices are determined basing on the major input cost, that is the steel.

NBMCW May 2010

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