Youth Aspirations - A Major Demand Driver for the CE industry in India - Jasmeet Singh, Associate Vice President- Corporate Communications and Corporate Relations, JCB India
How do you see the progress attained by the manufacturing industry in regards to the growth target projected by the Government on raising the GDP to 25 per by 2022? Where do we stand today?
The Government has made some really good efforts and initiatives in revitalising the role of manufacturing industry. The focus on re-booting manufacturing as one among the core growth sectors has definitely brought in a positive push for the industry and its allied sectors. And a primary reason that has supported this wave is the aspiration of youth. Today we see migration towards the evolving urban zones. This flow of migration is only expected to continue in the coming years. It is of no surprise that this will have to lead to a demand for quality lifestyle and better infrastructure. It brings in a lot of opportunities for the infra-construction sectors and thereby drives the demand for the equipment industry. Also, manufacturing industry is being increasingly considered as a promising source of employment. Benefitting this were initiatives like ‘Make in India’ etc. which will continue to encourage a lot of domestic and multinational players to invest and tap in the pool of Indian workforce. Hence, the whole idea of attaining growth by emphasizing on manufacturing as one among the centrepieces of development is a very welcome move by the Government. If this focus continues we are very optimistic about our nation’s economy on achieving its desired growth targets.
Please share with us your assessment on the growth of Construction Equipment industry in India so far?
The year 2011 was a very strong year for the equipment industry. But, after the year 2011 the industry as a whole went into an economic down-cycle This downward trend continued till 2015 and the industry including JCB felt the pressure thus resulting in re-calibration of the Supply Chain. However, the end of 2015 brought in a ray of hope with the focus on roads and highway programs by the Government. This focus on Roads and Highways has since continued and 2018 was the best year ever for the Industry, including for us at JCB in terms of the number of machines sold. The current year, 2019, has just begun. Owing to this being the ‘Election Year’ we are expecting usual market uncertainties. The year has remained flat so far in terms of sales and demand volumes. However the scenario is expected to change once the Government is seated and set in operation post elections. Meeting the infrastructure deficit of our country is a need of the hour. Quality infrastructure is a must for development. This promises immense growth opportunities for the Construction Equipment industry.
There has been a continued debate on excess availability of capacity and low consumption. What are your views on this situation?
As I had mentioned earlier, the year 2018 was a record period for the CE industry. Thus the capacity to build is there. For JCB, in particular, we invested during the period of down-cycle. During 2014 when the industry was going through a down-cycle we invested in setting up our new factory in Jaipur, followed by our design center. As a country, we have to meet a large infrastructure deficit, due to which the opportunities will always be there. We see the demand to only scale up in the coming years and for this the manufacturing industry has to build capacity. We anticipate even the future years to turn out promising.
Tell us about the trends driving the CE industry today?
Over the years, there has been a significant amount of digital integration in Construction Equipment. Equipment today is much more advanced and functions in real-time world as against the ones in operation 20 years ago. Advanced technologies like Telematics, Digitally Integrated Systems, Operator Friendly Management Techs, etc. will run the show in the coming years. Today most of the operations are being run on real-time basis and analytics, i.e. from predicting maintenance issues, to scheduling the operational hours, allocating service engineers and even orders parts online. We hence see this digital influx to draw the equipment industry to its newer heights in the coming years.
What in your opinion should be the Government’s focus now to benefit the industry’s growth? How can it create more investment opportunities for stakeholders like you?
The opening up of many infrastructure projects and new initiatives like the Bharatmala project, rural road development programs like the Pradhan Mantri Gram Sadak Yojana etc. (to name a few) has brought in a slew of opportunities for the equipment industry. Sectors like the roads and highways and railways are moving in the right direction which is pulling in the major demand. Plenty of irrigation and water conservation projects are now being announced and slowly taking its pace. All these facets have definitely brought in the encouragement for the equipment industry. However, the industry is in need for more growth drivers apart from the roads and highways segment. Infrastructure is not just about roads and highways; the infra-umbrella has a vast range of segments from irrigation, mining, water conservation, urban rejuvenation to power and energy and much more. The current demand pull being witnessed is mainly from the roads and highways segment. To achieve a promising growth, more demand drivers need to be identified and evolved.
With urbanization being one among the core focus areas how do you see the demand evolving from the tier-II and tier-III cities? Can these areas be considered as the new growth zones for the sector?
The demand pull is based on the pattern of consumption and aspiration. Youth today demands more facilities and aspire for advanced lifestyle – better houses, hospitals, schools, shopping malls, transport etc. All these call for increased infra development. Such quality infrastructure is equally in demand by the metropolitan as well as suburban and tier-II and tier-III residents. Hence, a shift in demand can be seen from metros like Mumbai, Chennai, Bengaluru, Kolkata, Delhi etc. to tier-II and tier-III cities and towns. The other major driving factor are the Urban Rejuvenation Programs. For cities and towns to be developed these regions need to be upgraded to quality standards. Considering these facets we came up with products like Mini-Excavators, Skid Steer Loaders, Telehandlers etc. It could hence be rightly said that the demand pull is today largely driven by the aspirations of our young population.
In brief, tell us about the approach adopted by JCB India towards creating and empowering a quality and skilled workforce in the country?
Going further, Skills will become a critical aspect to derive productivity and Quality. As technology moves ahead, different skills required will emerge. Skilling has to be for everyone, it is independent of gender as well. At JCB, our Jaipur facility is an example to showcase the strategy adopted by us on this front. 30% of the workforce on the shopfloor comprises of women. Activities even like welding etc. are today effectively handled by our female colleagues. Through such initiatives we are pioneering the integration of women in manufacturing in our industry. We have tried to open new inroads for women to join the most advancing manufacturing sector. We have had a fantastic experience by creating a gender balanced workforce at our facilities. In addition, our colleagues undergo various training program which further elevates not just their performance but also knowledge and comfort in operations.
@EPC World Media