Large infrastructure projects in power, refinery, cement, metal and other segments, bound by penalty clauses for delays, appear to be pushing for mechanisation of labour-intensive jobs to meet stringent deadlines.
This, in turn, has made Indian manufacturers scout for tie-ups and marketing associations to address the rising demand as infrastructure developers are keen on local support for after-sales service of the machines.
Mitsubishi Heavy Industries and Anupam Industries have formed a joint venture to manufacture port cranes and material handling equipment for the domestic and global markets. The partners intend setting up two facilities at Anand and Mundra in Gujarat at a cost of Rs 280 crore for making overhead cranes. Earlier, Konecranes acquired a 100 per cent stake in WMI Cranes. WMI is one of the oldest and crane manufacturers in the country with an installation base of over 4,000 cranes.
Escorts Construction Equipment has a marketing tie-up with Spain's Linden Comansa for sale and service of the high-end Comansa tower cranes.
Mr Rajesh Sharma, Vice-President and Head Marketing, Escorts, said the building equipment business which has been doubling every four years will touch Rs 36,000 crore in the next four years due to the infrastructure spends. At present, the crane market was around Rs 2,000 crore.
Local support
Mr C.P. Sanghvi, Chairman and Managing Director of Pune-based Sanghvi Movers, a crane hiring company, said a number of overseas players were focused on the Indian market because of the large infrastructure spending on the anvil. Further, large projects, given the time-frame for execution, preferred to go for cranes that come with local support as there have been service issues regarding some overseas cranes sold earlier.
Even Chinese equipment sales have been dropping and they have realised the need to have a local association to address the service requirements, he said.
Moreover, there was a great demand for tower cranes for high rise construction and companies were targeting such projects.
Among the largest crane hiring companies, Sanghvi has a fleet of over 400 mobile cranes and has added about 50 cranes at a cost of Rs 230 crore this year. Sanghvi Movers has an occupancy rate of over 85 per cent. The company is focused on projects in wind power, refinery, cement and metal segment. Mr Sanghvi said he was not into the tower crane business as his company preferred to concentrate on large projects. “We prefer to work in a rather niche segment,” he said.
Interestingly, Action Construction Equipment, among the reputed mobile crane manufacturers in the country, has severed links with Zoomlion of China. Mr Sorab Agarwal, Executive Director, said though ACE had a tie-up with the Chinese maker up to 2009, it preferred to work on its own after that as it had the technical in-house expertise.
The drive towards mechanisation is because labour is difficult to get, expensive and troublesome. Further, cost overruns are expensive, besides quality standards have to be adhered to. The demand for mobile cranes was from the building construction segment and for erection and fabrication across sectors, he said.
On the general slowdown across sectors, he said the drop in demand in the last two months was about 20 per cent in tower cranes and 25-30 per cent in mobile cranes.