Make in India has positioned India as an export hub to many Asian countries which will surely create lot of opportunities”, says Tushar Mehendale, MD ElectroMech in an interaction with the EPC World.
What is your view on the total size of the MHE market in India and the growth pattern in the near future?
According to the estimates, the industrial crane’s market in India is approximately
` 1500 crore to ` 1800 crore per annum. This market size has contracted slightly in the past couple of years due to the slowdown in the Indian economy. However, with the governments’ emphasis on the revival of manufacturing, infrastructure and allied industries, we are anticipating the industry to create market size of appx. ` 2000 crore – ` 2200 crore in next few years.
To break it down further, almost 30 % of the demand for cranes comes from the public sector companies and the remaining 70 % from the private sector. The private sector is the most vibrant part of the Indian economy, growing at a sustained pace and is willing to adopt fresh technologies, thus creating scope for innovation in the crane industry. If we divide this sector region-wise in terms of quantities of the total requirement, Western India contributes around 50-55%, Southern India contributes around 20-25%, Northern India 15-20%, and Eastern India around 5-10%. General manufacturing, auto, steel, power and infrastructure sector will play vital role in creating steady growth for industrial cranes.
How do you expect the MHE market to pan out in FY 2017 ? Tell us about your plans for the material handling section?
We are optimistic about the opportunities in FY 2017 due to the governments push to promote infrastructure and manufacturing projects in the country. We are focusing on newer markets and now investing to strengthen our network in Middle East and Africa market. There is a strong potential in these countries. ElectroMech has already established offices in Dubai and Abu Dhabi and network of dealers in several countries in MENA region. Apart from this, we expect to grow the sales of our innovative stacker cranes in warehousing industry.
How do you expect demand to pick up and what will be the growth drivers for the industry in the near future? Expansions in dealership network if any?
The construction and infrastructure sector is expected to be the key growth driver for the economy as a whole. These sectors drive the demand for cranes directly, as well as from other allied sectors such as power, construction equipment, steel, cement and manufacturing. The trickle-down effect is also seen in FMCG, automobile and other sectors that grow as discretionary spending increases – which also drive demand for cranes.
The crucial role of cranes and hoists can be seen at majority of vital infrastructure sites. Gantry cranes are used for precast segment yards and bridge constructions. In the case of bridge launching girders, companies require specialised hoisting equipment.
We expect that all the sectors such as infrastructure, heavy engineering, manufacturing, power etc. will drive the demand in varying amounts for the cranes and hoists sector. We are optimistic about the total market size for industrial cranes to reach to ` 2500 Cr in next 4-5 years. As per our growth plans, we are increasing our presence in Middle East and Africa as well through network of dealers.
What are the sectors where one can expect the maximum growth for the MHE industry?
Today, almost every industry needs material handling equipment from manufacturing to FMCG to consumer durables, to port and shipyards etc to name a few. However steel, power, infrastructure, general manufacturing, automotive and allied industry will create maximum growth opportunities for material handling equipment.
How do you think the “Make in India” initiative is going to work for the manufacturing industry specially the MHE segment?
Make in India initiative has clearly boosted the sentiments of the overall industry. The FDI flow has been increased steadily in India as compared to previous 3-4 years. The Make in India initiative has added a level of ease to the processes, regulatory affairs and government guidelines making them investor friendly. Several moves to promote local manufacturing such as increasing offset limit to 49% in defence manufacturing helped to attract more FDI in India. Post Make in India, we see a positive movement in the industry with several long pending projects getting kick started. Apart from the economic aspects, the initiative is also aimed at making India, a leader in the global manufacturing environment.
Make in India has emerged as a strong brand in the global markets creating huge opportunities for Indian manufacturers. The strong FDI inflow has led to added benefits like technology transfer, contract manufacturing, joint ventures etc. Make in India has also positioned India as an export hub to many Asian countries. A lot of multinational companies are eyeing to export their products to Asian countries from India. This will create a lot of prospects for the small and mid-sized companies to support the increasing domestic demand.
After sales service and spare part availability are the major concerns for the end user. Would you brief us about your after sales service network in terms of the geographical spread?
Today, after sales service plays an important role in decision making process of the customers. ElectroMech has established its service arm, Cranedge. Cranedge is a full fledge crane service company having its presence in several cities in India and at various customer locations. Cranedge provides annual crane maintenance services, modification, one time health checkup, parts and relocation services for all types of industrial cranes. After establishing a strong footprint in India, Cranedge has spread its wings in the Middle East markets as well.
ElectroMech is in tie up with ABUS, STAHL, Cranedge and Zoomlion. How have these tie ups contributed in terms of technical knowhow so as to enhance the products (range and quality) and the services (pre and post sales)?
Technology and knowledge transfer strategy has been one of the key factors for companies today in terms of competing in the versatile marketplace. ElectroMech is an exclusive India partner of ABUS Crane Systems, Germany – one of the world’s leading crane manufacturers. Apart from this, ElectroMech has also partnered with Stahl for their explosion protected range of products used in hazardous industries like refineries, chemical etc. We have made a joint venture with Zoomlion to cater to the growing tower crane market in India. On the other side, Cranedge is our group company taking care of crane service business. To sum it up the collective expertise and technological advantage we have garnered has made a valuable contribution to the success of ElectroMech.
How do the stacker cranes help in optimum utilization of space by volume? How do you see this segment growing?
Our stacker crane is an ideal solution for material storage requirements. Indigenously designed and manufactured by ElectroMech, a stacker crane is a combination of an EOT crane and Forklift. These systems offer several operational advantages such as narrower aisles as compared to the space required by a Forklift. The crane is supported by the racks themselves, hence no additional structure is required. Being electrically operated, no harmful exhaust fumes are emitted into the work environment. Furthermore there is no down time required to charge batteries. The structure of the system, with a crane mounted on the racks, is inherently safe, with no danger of tipping over.Where substantial volumes of raw material,components or finished goods need to bestored, a stacker crane facilitates swift stocking & retrieval, offering an ideal solution. This is particularly pertinent in metros, with spiralling costs of land and construction or an existing facility where the existing space needs to be utilised. There is a positive demand for such systems in industries like pharmaceutical, warehousing, FMCG, components manufacturing etc to name a few.
You have strategic tie up with Zoomlion in the tower crane vertical. What are the projections for these sectors for FY2017?
The tower cranes market is in a fairly nascent stage in India when compared to the more developed markets. However, this scenario is rapidly changing and the tower cranes market is expected to grow at 20 per cent annually over the next few years. The real estate sector itself has seen a paradigm shift over the past decade with modern techniques of construction becoming more common across the sector. Not only metros, but Tier 2 towns are witnessing previously unseen level of development, and the skyline of the cities like Mumbai and Delhi is rapidly changing with skyscrapers becoming the norm. This isn’t surprising, given escalating land prices and Cushman & Wakefield’s estimate of the shortfall in residential units from seven major cities alone touching 1.3 million. With these changes, comes the demand for quicker time to complete the projects, which is pushing the demand for related equipment. Mumbai alone accounts for approximately 70-80 per cent of the demand for new tower cranes, and this is only expected to grow.
Precast technology is catching up fast in the country and we expect number of plants to be installed in the near future. What are the products in your portfolio which work well in this sector?
Precast segment has gained tremendous importance for creating bridges and flyovers in India. Precast in itself is a challenging segment to design cranes. We have proved our competency to design and supply several customised double girder cranes for best reliability and performance in the industry. Our rich experience in design, backed by state-of-the-art manufacturing enables us to deliver cranes in an unmatched shortest possible time which differentiates us from several other competitors.
