A review of the key developments of the year.

With the passing of December, all of us will enter into a brand new year. It is definitely a matter of great honour and pride for all those who were with us throughout the year. We would not have reached this far without your support. The passing year has witnessed many developments across the industries. Here, we take a look at the key happenings of 2016.

Indian equipment market surges
According to a report published by Off-Highway Research’s, a growth rate of 27 per cent was expected by the end of 2016. This was in anticipation with the record equipment volumes expected to be sold in the coming years.

The report forecast predicts that the sales in the construction equipment sector will 27 per cent this year.  There will be double –digit increases that will follow in the year 2017-18. If the said trend follows, there might be a situation where the sales volume will break the previous record of 72,197 units, which was achieved in 2011.

Focus on investing in the infrastructure and rise in the demand of AWPs, has gave a boost to the sales. The report said, “Infrastructure development is a key economic driver and enjoys an intense government focus that should accelerate demand for construction equipment in the country.  India needs an estimated investment of Rs 31 crore over the next five years to keep pace with its growth targets, of which over 70 per cent would be needed for power, roads and urban infrastructure segments.  The total budgeted outlay for the infrastructure sector for fiscal year ending March 2017 is Rs 2.2 crore.”

Commenting on the state of the equipment market, the report added, “The domestic market is dominated by six equipment types, backhoe loaders, crawler excavators, mobile cranes, mobile compressors, compaction equipment and wheeled loaders.  These six equipment types will account for 94 per cent of the market in 2016.”

Vikram Sharma, MD & CEO, Kobelco Construction Equipment India Pvt. Ltd said, “After several years of below par activity, the construction equipment market in India is finally showing positive signs of growth. There is definite improvement in the overall confidence.” He further says, “Everyone related to the construction equipment industry is hopeful that this upward trend will sustain for some time with the momentum being generated by many government initiatives to revive the stalled projects and also launch new ones. Barring political factors, the execution of projects should bring about considerable economic activity and development.”

According to P V Ramdev, Managing Director, Everest Engineering Equipment, the construction equipment market financially showed a de growth in the 1st quarter. He says, “In the 2nd quarter it improved slightly and in the 3rd quarter there was further progress. We had many orders in beginning of the 3rd quarters also we are expecting more orders in the last quarter. This is a sign that shows a very good growth in the construction equipment industry especially in the tower cranes and passenger hoist.”

Vijay Kumbhani, Director – India, Columbia Machine Engineering (I) Pvt. Ltd feels that 2016 was a year of slow growth. He says, “The continued slowdown in the infrastructure and real estate sectors in India results in a weak market for our machinery. The steps being taken by the present government to clear stalled infrastructure projects and increase infrastructure spending on roads, ports, smart cities, industrial and freight corridors should greatly improve market conditions in the near future.”

2016 so far has shown a very healthy growth over last year in all equipment categories and it is expected that the trend will continue in the coming months as well. By virtue of increased demand, there is going to be increase in the business for all equipment manufacturing companies. The industry hopes that the good growth continues till 2019 and beyond with the present government keen to prove its effectiveness and reassure that the decision to be elected by a majority has been a good choice.

If the demand for construction equipment increases at the expected good pace, then in 2017, equipment manufacturers will invest in increasing production capacities in India to cater to the reinforced and continued product requirement in the Indian market.

Mining sector returns to life
The year 2016 has been a lively even for the mining sector. Subhajit Chaudhuri, VP – Sales and Projects, MMD India says, “Mining industry is in a right path. Coal block allocation is a good move from the coal ministry. The government is continuously working on to bring in modern technologies for sustainable, systematic and better mining in India.” Global mining is changing rapidly: rising costs, environmental pressures and health and safety have called time on traditional truck and shovel methods, as the industry becomes increasingly aware of the need for ‘Sustainable Mining’.

Coal block allocation is an important topic for the mining sector. Ramesh Palagiri, Managing Director and CEO, Wirtgen India said, “Allocation of mining blocks through auction is a right step towards bringing in transparency. Once the primary roadblocks are managed, we will see the results.”

Road construction industry to grow at 6%
With the year 2016 coming to an end, the road construction industry the road construction industry has also performed as per expectations. Sunil Sapru, Chief Executive Marketing, Ammann Apollo India Pvt Ltd says, “The market growth is estimated to be around 6 per cent.”

Dimitrov Krishnan, Vice President and head of Volvo CE India says, “For the first quarter of this year, demand for our equipment in road building projects was up 60 per cent on the same period of 2015. Our sales of equipment into road building were their highest for eight years for the period January to April of this year. The demand moderated somewhat over the course of 2016, but overall sales into road building companies were up between 30 per cent and 40 per cent compared with last year.”

Demonetisation to have a vast impact
The whole nation was taken by surprise as Prime Minister Narendra Modi took a mammoth decision to scrap the currency notes of higher denomination. This is a bold step that will have a vast impact not only on the day to day life of the people but will also affect the business world.

Rohitt Sharma, Director, MFS formwork Systems Pvt Ltd – Faridabad says, “This is one of the best years for overall growth with many positive changes in policies benefitting the end user. With RERA and demonetisation, construction activities in affordable and medium segment have taken a lead which shall enable actual user to buy a home at reasonable price with on time possession. This has led to the increase in the sales of housing units and for timely delivery modern construction technologies.”

Business world all set for BAUMA Conexpo India 2016
Over the years, BAUMA Conexpo India has been getting bigger and the footfalls and audience too have widened with every successive show.

Numerous big names in the industry like ACE, Ajax Fiori, Ammann Apollo, ASTEC, BAUER, BKT, Case, Caterpillar, Columbia Machines, Haulotte, Herrenknecht, JCB, Kobelco, KYB Conmat, Liebherr, Linnhoff, Liugong, Macons, MAN, Marini, Masa, Potain, Putzmeister, Puzzolana, Sany, SchwingStetter, WackerNeuson, Volvo, Wirtgen and XCMG have already signed up for Bauma Conexpo India 2016 that will be held at HUDA grounds in Gurgaon / Delhi from December 12 to 15. The show will set the perfect backdrop for those dealing with construction and construction equipment sector to gauge the current mood of the market along with finding the right mix of attendees to interact and deal with under a perfect ecosystem at the venue.