Construction business requires huge investment and a major chunk of investment goes for buying heavy construction machinery depending upon the project requirement. Therefore, it is always advisable to minimize the cost of the investment to make maximum profit out of the project.
There are four segments of construction machinery, Earthmoving equipment, Concrete equipment, road equipment and material handling equipment and buying this equipment is very costly affair.
Due to budget constraint, construction companies can’t take risk of compromising on the quality of construction materials, which will ruin the brand value of the company.
However, one option is always open for these construction companies to minimize the investment in purchasing the machinery used in the projects. Instead of investing in the new construction equipment which is necessarily costly affair, one can prefer to buy second-hand construction equipment from various dealer and e-commerce portals which are in the business of used construction equipment.
There are various advantages of buying second-hand construction equipment, which help construction companies to save huge amount of money.
The new machine eats up huge money of contractors and buying used machine help to reduce the project cost. Second hand construction equipment is always available at lower price and used machine could be a better alternative from a financial point of view, when we plan out the investment for the project.
Within a first year of buying the new construction equipment, the value of the machine depreciates around 20 to 40 percent, depending on the condition of the machine, so your resale value is automatically reduced. Thereafter, the depreciation is gradual and not substantial. However, used construction equipment hold resale value, even you sell after a few years or after your project completion. Therefore, potential loss in selling used equipment is lesser as compared to selling new equipment.
Choice and Flexibility
Due to the emergence of e-commerce, many companies offer the services of buying and selling used equipment online, which give various options/choice for the buyers to buy equipment in their location or in budget. When someone intends to buy used equipment he/she has flexibility to choose machine from their favorite brand, which one can’t have same flexibility when go for new machine due to budget constraint. For example, if a small contractor wishes to buy Backhoe loader of JCB but due to shortage of fund he can’t buy the new JCB Backhoe loader, but he still has option to buy the same brand in used equipment.
As we are aware most of the construction equipment manufacturers are coming up with the latest technology and if contractors buy new machine they enjoy the features of the latest technology.
However, it does not make a huge difference on a project if someone uses the older version of the machine due to any reasons. The Heavy construction equipment industry has been very slow in adopting the new technologies, so it is not a matter of concern if contractors are using used equipment due to financial crunch.
Therefore, it’s important to make a choice between new and used equipment after taking all the above mentioned points into consideration.
The fully adjustable seat slides and turns to enhance visibility and operator safety and comfort, and the ROPS/FOPS certified Volvo cab is pressurized to increase the efficiency of the air conditioning system and prevent dust from entering the operator environment.
Demand of Paver, one of the crucial road building equipment set to rise in the country as government is committed to invest huge amounts in road building over the next few years, which will lead to the Sell of new and used Paver in India.
The paver is also known as Asphalt finisher, Paver finisher or Paving machine, is used for laying down asphalt on roads, highways, bridges and other construction works. The Paver levels the asphalt and provides compaction before road roller is used for compacting asphalt.
The Sell of the road building equipment depends on the investment made on road and highway building in the country and length of road construction. In last two years, the Ministry of Road Transport and Highways, approximately awarded road projects worth Rs 2 lakh crore and planned to award works worth Rs 7 lakh crore in the next five years to build 50,000 km of highways.
This year itself, government has a target to build 15,000 km of roads, of which National Highways Authority of India (NHAI) has a target of 8,000 km and National Highways and Infrastructure Development Corporation Ltd. (NHIDL) is responsible for rest 7,000 km.
NHAI has targeted to award 97 highway projects during 2016-17 in almost 18 states and projects could cost Rs 1 lakh crore. During the period, NHAI would award projects in Andhra Pradesh, Bihar, Chhatisgarh, Gujarat, Haryana, Himachal Pradesh, Jammu Kashmir, Jharkhand, Kerala, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu and West Bengal, and cover the area of 6,631 km.
The road and highway building in these states during this fiscal indicate the requirement of Asphalt finisher. The construction of road building in these states would lead to the demand of new and used Asphalt finisher, even the rental market will also witness the growth due road building in the country.
Last month Union Minister Mr. Nitin Gadkari laid down the foundation of three national highway projects in Uttar Pradesh and announced to invest road projects worth Rs 2 lakh crore in next two years.
Cabinet Committee on Economic Affairs (CCEA) has approved the development of 1120 km of National Highways last month, at an estimated cost of Rs 6,461 crore in five states, including Karnataka, Odisha, Bihar, Rajasthan and West Bengal.
Recently, NHAI awarded projects in Uttar Pradesh (worth Rs 2,016 crore), Himachal Pradesh (Rs 1,583 crore), Punjab (Rs 2,070 crore), Rajasthan ( Rs 820 crore) and other states.
Demand of second hand/used construction equipment has been rising in the country after the emergence of various e-commerce portal; it is helping the unorganized market of used construction equipment in India. One of the fasted emerging e-commerce portal is www.equipmentonestop.com , the portal has a wide range of road building equipment including Paver from all the brands.
Source: Information has been obtained from government’s release
Upgradation of the technology is the need of the hour for survival in automation industry, especially in construction industry for smooth and error-free functioning at job sites. On the same line, John Deere one of the leading construction and farm equipment equipment makers in the world has upgraded its SmartGrade technology in its new model of crawler dozers.
After the success of its 700K dozer equipped with SmartGrade launched earlier this year. The company has now integrated SmartGrade grade control technology ‘Topcon 3D-MC2 Grade Control System’ in its 750K and 850K crawler dozers.
Topcon 3D-MC2 Grade Control System is fully incorporated into the machine cabin, structures and software — delivering precise grading performance while eliminating vulnerable external masts and cables.
“The launch of our 700K SmartGrade dozer was a huge hit earlier this year, and many of our customers asked for the grade control technology to be integrated into our larger offerings. The 750K and 850K SmartGrade dozers answer that call. They’re easy to set up and are highly productive earthmoving and grading machines intended for road building, site development and residential building applications. Like the 700K SmartGrade dozer, these models are purpose-built and ready to work the moment they roll off the dealer lot,” said Liz Quinn, product marketing manager, John Deere WorkSight.
The 750k and 850K model of crawler dozers incorporate a PowerTech 6.8-L Final Tier 4 diesel engine with 165 horsepower and 205 horsepower, respectively. Both models feature Eco mode, which automatically adjusts engine power and transmission settings based on load while maintaining ground speed, to help optimize fuel economy.
Highlights of SmartGrade
1 -Auto SmartGrade allows the operator to easily adjust the system when moving the machine from one soil type to another, unlike an after-market system, which often requires the GPS manager to make a trip to the machine to recalibrate the system, particularly helpful to new operators. Auto SmartGrade automatically lifts the blade over heavy loads before track slippage occurs, then returns the blade to grade.
2 – SmartGrade also limits the number of passes required, reducing the pace of wear on the undercarriage. The John Deere SmartGrade dozer is nearly 7 percent more accurate across the entire speed range of the dozer when compared to conventional masted systems, claim the company.
3 -Another benefit of the SmartGrade technology is that machine dimensions are preloaded into the grade control monitor, reducing the time required to calibrate the dozer to about 30 minutes. The easy-to-use system is beneficial to new operators in that it can get them up and running quickly.
4 -The SmartGrade integration into the 750K and 850K dozers also allows for enhanced diagnostics. Having the ability to get the grade control system and diagnostic information over the John Deere JDLink telematics system provides valuable uptime information to customers.
5 -SmartGrade is integrated into the machines, it removes the need to install blade-mounted sensors and components daily, reducing setup time and allowing operators to get to work.
6 -Eliminating external cables to the masts reduces breakage, and the removal of the masts from the blade eliminates vulnerability to damage and theft.
Source: Information has been obtained from John Deere’s release
Mahindra & Mahindra Ltd, a part of Mahindra Group has launched Mahindra DiGiSENSE, it is a revolutionary technology solution that connects Mahindra vehicles, tractors, trucks and construction equipment to the cloud, opening up a whole new dimension to the experience of vehicle ownership.
The technology empowers owners, fleet operators, drivers, dealers and service teams to access vital information about their vehicles, trucks, tractors or construction equipment on a real time basis from the driver’s seat and afar.
This digitally enabled sensing will be available across Mahindra’s breadth of mobility products (including its Backhoe loader ‘Mahindra EarthMaster’). This launch makes Mahindra, the first OEM (Original equipment manufacturer) in India to integrate its product line-up onto a cloud-based technology platform.
DiGiSENSE will empower customers to digitally build knowledge 24X7 about the performance and location of their vehicles. Drivers can contact emergency breakdown services or pull up a route planner at the touch of a button, fleet owners and dealers can track the location of their vehicles in real time, while remote diagnostics and reports allow service teams to monitor the vehicle’s health and productivity parameters, on a real time basis, said the company.
Speaking at the launch, Dr. Pawan Goenka, Executive Director, Mahindra & Mahindra said, “DiGiSENSE 1.0 is one such effort to adopt technology to develop new ecosystems. It is the first of its kind technology platform which is multi application and multi product enabled. From providing real time data, to tracking performance and productivity of the vehicles, DiGiSENSE will enable customers to control their businesses.”
DiGiSENSE will initially be available in the Jeeto and Imperio in the small commercial vehicles space; the Arjun Novo in the tractor space; the Mahindra Blazo in the heavy commercial vehicles space; and the Earthmaster in the construction equipment space.
It will help the Construction Equipment business reap huge benefits such as improved productivity and reduced operating costs. Construction equipment are extremely expensive machines and many times rented out or sent with a driver. The technology will help the owner to track the machine on a real time basis, it will also update you for Low fuel indication, gives machine usage status, machine health status, remind you when service is due, machine location and its Alert system will help you to track machine performance.
This cloud technology will help truck owner to have better control over their business and money by providing various Trip optimization parameters then and there through mobile app. The technology will help in fleet management, roadside assistance, vehicle tracking, safety indicators, engine management, driver productivity management and also ensures security of vehicle and goods in case of any route violation.
Rajan Wadhera, President and Chief Executive – Truck, Power Train Division and Head – MRV, Mahindra & Mahindra said, “DiGiSENSE is a modular, scalable, flexible and robust connected vehicle platform that has been conceived and brought to life by Mahindra by bringing together an entire ecosystem of stakeholders. We have built in several features into DiGiSENSE and will further integrate other features in the future versions. We are sure this will revolutionize the way our customers will interact with their Mahindra vehicles and will empower them to maximize their efficiencies and effectiveness.”
It is available as a subscription-based service at an affordable price, DiGiSENSE will eventually be available across the entire line-up of Mahindra’s vehicles, said the company.
Source: Information has been obtained from Mahindra’s press release, Digisense website.
Due to rising infrastructure development in the country, Indian construction equipment industry is expected to grow over 20% to 58,465 machines in 2016, said a latest report of Off-Highway Research, a global research firm of construction and agricultural equipment markets.
Sales of construction equipment in India grew over 37% in the first six months (Between January and June) of 2016 when compared to the same period last year, said its specialist consultant and market forecasting study.
The sale of construction equipment could rise during this period, as Indian government has increased its infrastructure investment, especially in road and railways and actual construction work has resumed on the ground. Last month, government has informed the Parliament that Ministry of Road Transport and Highways had approximately awarded projects worth Rs 2 lakh crore in last two years.
Off-Highway Research’s report further says, Indian construction equipment market has witnessed a turnaround over the last 18 months, with sales falling to a low of 47,889 units in 2014, before enjoying a small increase in last year (2015). On the back of infrastructure investment, sale of CE products is expected to surge over 20% in 2016. It is also expected to sustain market (CE) growth for the next four years, albeit at more sustainable levels, it 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 INR 31 trillion (US$ 465 billion) over the next five years to keep pace with its growth targets, of which over 70% 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 INR 2.2 trillion (US$ 33 billion),” said Off-Highway Research in its report.
It is projected, sale of construction equipment likely to rise to 73,595 units in 2020, if it touches this number, and it would break previous high of 67,898 units sold in 2011.
According to report finding, Backhoe loader is extremely popular machine in India and around 24,500 units expected to be sold this year alone and it represents 42% of the market in volume terms. Off-Highway Research believes the strongest long-term growth prospects are in the crawler excavator segment in India, it is projected to double in size between 2015 and 2020 to 22,000 units per year.
In a major push to give a boost to the country’s infrastructure sector, the union cabinet has approved huge investment of Rs 30,835.86 crore for Railway and National highway projects across the country. The cabinet approved nine railway projects totaling 1,937.38 km and 1120 km of highway projects in five states.
The cabinet has given its green signal to nine railway projects in ten states worth Rs 24,374.86 crore include Assam, Jharkhand, Chhattisgarh, Maharashtra, Uttar Pradesh, Madhya Pradesh, Telangana, Andhra Pradesh, Odisha and Chhattisgarh and five national highway projects worth Rs. 6,461 crore in Karnataka, Odisha, Bihar, Rajasthan and West Bengal.
The news brings cheers on the face of construction equipment manufacturers and will give major boost to Indian construction equipment market, which has already started witnessing the better sell as compared to one year ago, all the leading manufacturers are bullish on better sales of various types of CE and material handling products.
In the budget 2016-17, government has committed to invest Rs 2.21 trillion for various infrastructure developments in current fiscal and allocated a mammoth Rs.218,000 crore for lone railways and roads in 2016-17.
When we look at the projects approved by union cabinet, Major railway projects fall under Maharashtra, Madhya Pradesh, Uttar Pradesh and Chhattisgarh, in these states Maharashtra alone received three railway projects. The cabinet approved construction of third line between Itarsi and Nagpur (Madhya Pradesh and Maharashtra) at cost of Rs.2,882.95 crore, this 280 km long railway line is expected to be completed in five years.
Another project which goes to Maharashtra is 201.04km long third line between Ballarshah and Kazipet (Telangana and Maharashtra) at a cost of Rs 2,403.22 crore and which is to be completed in five years and third project in the state, 228.3 km long third line between Rajnandgaon-Nagpur (Kalumna) in Rajnandgaon district of Chhattisgarh and Gondia, Bhandara and Nagpur districts in Maharashtra at a cost of Rs 2,193.53 crore, besides facilitating the travel, this project will benefit various industries, mines, coal fields and power plants will have additional transport capacity to meet their requirements.
In Uttar Pradesh and Madhya Pradesh, railway will construct 152.57 km long third line between Jhansi and Bina at a cost of Rs 2,273.84 crore, the project is expected to be completed in four years and another 273.80 km long third line between Mathura and Jhansi at a cost of Rs. 4,377.13 crore has been approved.
A 206 km long fourth line between Jharsuguda and Bilaspur will be constructed between Odisha and Chhattisgarh at a cost of Rs.2,298.31 crore and it will be completed in five years.
One railway project will be constructed in Andhra Pradesh at an estimated cost of Rs.3,875.68 crore, Indian railways will construct 287.67 km third line between Vijaywada Junction and Gudur Junction, the project is likely to be completed in six years.
One each railway project will take place in Assam and Jharkhand, 176 km second railway line between New Bongaigaon and Kamakhya at a cost of Rs 2586.85 crore will be constructed in Assam and third line between Kharagpur (Nimpura) and Adityapur at a cost of Rs 1483.36 crore will be built in Jharkhand.
Road Transport and Highways Ministry aims to increase the national highways’ length to 2 lakh km. This fiscal, government had decided to award 25,000 km of national highways as compared to 10,000 km in the last financial year and targets to construct 15,000 km in this fiscal.
The government commitment towards improving infrastructure of the country will drive overall construction equipment market and especially, multi-purpose equipment like Backhoe loader, excavator, various road building equipment and other.
States where government has approved railways and highways projects, will require a good amount of CE. By looking at government investment, infrastructure companies would think to increase existing number of their assets to grab the projects.