‘Construction equipment industry growth will happen in next quarter’

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JCB India Limited, Ballabgarh (Haryana) is a fully-owned subsidiary of JC Bamford Excavators Limited, UK, one of the world’s leading manufacturers of earthmoving and construction equipment. JCB India manufactures 25 different machines in seven product lines such as backhoe loaders, wheeled loading shovels, tracked excavators, vibratory compactors, telehandlers, skid steer loaders and pick and carry cranes.

Amit Gossain

Amit Gossain

Amit Gossain, President – ICEMA, Executive Vice President Asia – JCB India Ltd told Sandeep Menezes that a growth rate of around 15 per cent can be expected for the construction equipment industry.

Excerpts from the interview:

It’s been six months since the new government has taken over the nation’s reign, how do you foresee the construction equipment industry’s performance?

Currently things are very slow. But there is lot of positive feeling and sentiments are good. But to make things move there must be more projects on the ground – therefore this is the key. While they are talking about projects, I think the government needs to clear the various problems that are there with projects.

So if they are talking about draft for environment clearances or land acquisition – it needs to be hastened so that projects which are already there can take-off quickly.

Has the equipment industry told the government about the industry’s problems and submitted a wish-list?

We have given a wish list to the government and told them that the projects which are already there need to move fast. If projects start moving it leads to positivity in the entire system, the contractors are happy and therefore the funds start coming in.

Currently there are many contractors who are not being paid on time therefore once they start doing the projects and get paid then things will start moving fast.

Of course, the Modi government is doing lots to get investment cycle moving. The government is pushing for Swatch Bharat and other infrastructure projects. From our equipment perspective also, there needs to be lots of implements, attachments and other machinery for Swach Bharat and more infrastructure projects.

Going forward, how much growth do you foresee across the construction equipment industry?

We were expecting a growth now but it has not happened yet. We think that it will happen in another quarter (three months). I think a growth rate of around 15 per cent can be expected for the industry.

Design infringements in the Indian construction equipment industry are happening although it’s not as bad as China. Comment.

Infrastructure that India needs is immense therefore we are far behind in terms of infrastructure needs of the country. To meet those needs, we need to do a lot more. We can’t compare ourselves to western countries or even China. We have to get things moving and not compare ourselves to other nations.

The interest rates have not softened to the extent expected and most construction equipments are purchased on financing mode. Comment.

The lower interest rates certainly help. But we need to look at it in two ways. If projects are there and interest rates are high then there are better returns. Yes, right now to move the economy the interest rates should have been lowered. I think projects should start – that will be the key to the future.

The government has been pushing with its ‘Make in India’ campaign. Comment.

The ‘Make in India’ campaign is certainly a fantastic initiative. Most of our equipments are made in India. The quantum of local components in our machines mainly depends on the machine. Therefore backhoe loaders are mostly all Indian – there are some components that are imported otherwise its mostly Indian. We have five plants in India. At Pune, Ballabgarh and Jaipur plants we make it here.
What are JCB’s future plans in the construction equipment industry across India?

JCB is linked to the infrastructure development of the country. We already have a plant that we recently inaugurated in Jaipur which is currently functional. We have two plants at Pune. And also the world’s largest backhoe loader plant at Ballabgarh. Therefore we are already ready for the upturn – it’s just that the government now needs to implement the projects which they will in the near future. I am sure and positive about the upcoming economic upturn.

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