Increasing Practice of Leasing Construction Equipment to Reduce Project Costs Will Drive CE Rental Market: PMR

The construction equipment rental market is expected to witness the robust growth in next 10 years on the back of the increasing practice of leasing construction equipment across the World including India,  said a report. The companies across the world prefer the renting option to reduce project costs.

An abstract of a report titled ‘Construction Equipment Rental Market: Global Industry Analysis and Forecast 2016-2016’ published by Persistence Market Research said that practice of leasing heavy construction equipment has proven to be beneficial for all sizes of the companies across the world which would result into boosting the rental market during the forecast period.

The report observed that construction equipment rental market will majorly get benefit from investments in the sectors like transport, housing, energy, and power. With such high level of investments in these sectors, the construction companies are expected to prefer the renting option as to reduce their overall project costs.

“This is a cost effective approach as in doing so they face lower maintenance costs and fewer technical charges. Adding to that, transportation, operation and servicing requirements are reduced many folds. Both these factors fuel demand for the construction equipment rental market in the coming future,” said the report.

The other reasons which would drive CE rental market during the period are; renting reduce operating expenses and evade tax, insurance, licensing, interest on loans, storage cost, and others which usually come with purchasing new machines. These expenses can be saved by renting the construction equipment.

The inclusion of a varied range of advanced construction equipment in rental fleets is expected to drive the rental market in all the major markets in the world. The other key reasons which would fuel the construction equipment rental market during the forecast period are strict regulations, increasing ownership cost and financial constraints.

On the other hand, the major obstruction for the demand for renting construction equipment during forecast period would be fluctuating fuel prices, expenditure of picking up and delivering machinery, especially when the contractor is working in remote areas.

According to the report, the demand for advanced and eco-friendly machinery will rise, and low maintenance machinery is expected to castaway conventional equipment during the forecast period.

The study is very bullish on Asia pacific region, the region is expected to dominate the construction equipment rental market over the forecast period. India and China are expected to offer better opportunities due to rising population and urbanization, and the growth in IT sector will further push the construction equipment rental market.

Three Ways of Looking Heavy Construction Equipment Before Starting Projects

To perform any task, advanced planning is required to complete the projects.  As we know a huge construction project would float in the next fiscal, as the Indian Government announced to invest Rs. 3.96 lakh crore for the country’s infrastructure, thus people associated with construction industry may soon start their planning for fleet management.

Here we will see different ways, which usually considered during the project planning regarding the management of the equipment for the projects. Generally, contractors consider three options during the planning stage, 1) Buying New Construction Equipment, 2) Rent, 3) Buying Used Construction equipment, which entirely depends on the budget and project requirement.

Buying New Construction Equipment

Buying new construction equipment has various advantages than disadvantages. Today whoever buys the new machine; they prefer the technologically-advanced machine which provides different advanced features to perform the task easily, help in increasing productivity with minimum human involvement, fuel-efficient, environment-friendly, low-maintenance cost and can also be remotely monitored.  But, buying new construction machinery is always a costly affair, not everyone can afford buying a new machine. However, big contractors prefer to purchase a brand new machine so that it can be used for a long period.

Rent Construction Equipment

People who are unable to buy a brand new technologically-advanced machine due to budget constraint, but he can still use such machine on Rent. Many contractors prefer renting the equipment rather than owning it, due to various advantages. Renting is having various advantages like one can hire the machine for temporary projects, rent any types of machinery, without owning the machine you can start the project with hired machinery, you can hire machine wherever you required, and others.

By looking at the rising demand for hiring construction equipment, many construction equipment manufacturers also started rental services and providing their new machine to contractors on rent. Renting option reduces the burden of maintenance, servicing, transportation of the fleet, etc.

Many online companies like EquipmentOneStop.com started rental services in India, where people from across the country can hire different types of construction machinery for their temporary projects.

Buying Used Construction Equipment

When the budget does not allow investing in the new heavy equipment, buying used construction equipment from resale market help you keep the overall budget in control. Buying used machine may reduce your budget 30 to 40%. Earlier due to limited reach, buying used construction equipment was a challenging task, but due to the rising number of organized players and emergence of e-commerce companies have given the new height to the resale market.

The used machines do have some disadvantage, but careful inspection or selection of the machine may help you to reduce some extent of its disadvantages.

The online companies provide all kinds of used construction machinery, like Excavators, Backhoe Loaders, Wheel Loaders, Motor Graders, Cranes, Pavers, Road Rollers, Dumpers, and others.

Volvo CE Introduces Single-Drum Compactor for Indian Market

Leading construction equipment manufacturer Volvo Construction Equipment (Volvo CE) recently introduced updated SD110BA single-drum Compactor for India market. The company has designed this machine after harnessing the skills and knowledge gained while working in India over the decades for country’s industrial applications.

The updated SD110BA single drum compactor built in India by keeping the productivity, combining powerful performance, quality compaction and versatility to adapt to earthwork compaction applications in India.

“The next generation compactor is specifically manufactured to place and compact mixed soils, crushed aggregates and base materials beneath flexible pavements capable of accommodating heavy traffic volumes. And, boasting an impressive range of productivity-enhancing features, the Volvo SD110BA ensures profit in every pass”, said the company in a press statement.

To maneuver across the different terrain in India, the Volvo SD110BA features a propulsion control lever with integrated vibration activation for precise speed control and ease of operation. This, in addition to a wide range of features including easy-to-reach controls, ample toolbox storage, and detachable sunshade ensures confident compaction, regardless of terrain or job site conditions, it said.

Operator Comfort

Due to the fully integrated traction control system, the Volvo SD110BA enables operators to access hard-to-reach areas of the site and its preventing wheel slip gives stability to the machine when operating on steep inclines and slippery surfaces.

This machine is highly comfortable for operators’ point of view; it gives ample space for continuous airflow even during varying temperatures and altitudes and enables the operator to remain comfortable and fatigue-free.

All weather condition

The engine compartment of the Volvo SD110BA designed to beat the typical weather condition of the sub-continent, and it’s also equipped with a cooling fan to reduce power from the engine, which helps the engine to stay cool in high ambient temperatures.

Fuel Efficient Engine

This single drum compactor, built for power and productivity. It offers optimum fuel efficiency and emission compliance, claims the company. It could be the ideal choice for people looking to control both operating costs and environmental impact.

Its BS-III compliant engine and optimized hydraulics system work in harmony to provide a smooth, efficient and effective use of energy. To further increase fuel efficiency, the intelligently-designed vibration system offers quicker ramp-up speeds at lower pressure.

Long Service Life

These single drum compactors are designed to ensure a long service life to the machine and increase uptime. Volvo claims its all Genuine Volvo Parts are extensively tested and approved, which provides long-lasting performance and maximize the durability of its components.

Volvo is also offering a complete range of Customer Solutions to ensure SD110BA achieve maximum uptime and generate profit and growth for their owners.

Equipment One Stop Started Rental Services for Construction Machinery

India’s one of the fastest emerging online portal for buying and selling used construction machinery, www.equipmentonestop.com has started ‘Rental Services’ for Contractors and Asset owners on the back of the growing trend of hiring construction, mining and material handling equipment in the country.

The rental platform allows people to both Hire and Rent Out any types of construction equipment from anywhere in India.
The rental service is available across the country including Maharashtra, Karnataka, Andhra Pradesh, Telangana, Rajasthan, Delhi, North India, Gujarat, and other states, thus people from any part of the country can either hire machine using this platform or rent out their machine to others.
The portal is having different kinds of machines including Backhoe Loaders, Compactors, Cranes, Dozers, Excavators, Graders, Hydra Cranes, Mobile Cranes, Pavers, Wheel Loaders and others.
Contractors who are looking to hire any construction equipment for their temporary projects or long term projects can visit Equipment One Stop’s rental section to see the machines on the website. In case you do not find the equipment on the portal which you are looking for, the team of Equipment One Stop (EOS) will arrange the specific machine for you using its wide range of a network.
Therefore, Contractors have to simply put their request on the website; EOS will help you meeting your requirement.
For the asset owners, the Rental Service gives them the opportunity to use this platform free of cost. Here, anyone can put the details and pictures of their machine on the website, which will be visible to the contractors from any part of the country and they may approach you if interested in your machines.
No matter where are you sitting, you can post the details of your asset on the website by following few simple steps.
The rental service is available on weekly, monthly, quarterly and annual basis.
In the Rental section, you will see two sub-sections, ‘Rent In’ and ‘Rent Out.’  In the ‘Rent In’ section, you can see the machines which are available for hiring. If you want to ‘Rent Out’ your own machine to others, here you can post the details of your machines.
Since the inception of companies like EOS, hiring construction equipment has become quite easy and CE rental has started becoming organized segment.
Prior to the introduction of ‘Rental’ service, the Equipment One Stop (www.equipmentonestop.com) was providing services for buying and selling used construction equipment. Besides, it also provides other services such as Valuation, Finance, and Insurance. Therefore, EOS has emerged as a ‘One Stop Solution’ for buying, selling and hiring any types of used construction equipment in a very short period of time.

Major Challenges Faced by Used Construction Equipment Market in India

The demand of used Construction Equipment in India has surged in the last few years, but the country’s used Construction Equipment segment is still in a nascent stage as compared to the global market. As the segment is still emerging, it faces various challenges.

The emergence of some the organized players, is trying to overcome the challenges faced by the segment.
Here we will see the challenges faced by used construction equipment market in India and how some of the organized players are trying to reduce the challenges by the segment with their professional approach.
 
1- As compared to the world’s most developed nations, the Indian used construction equipment market is not highly organized, relatively very small, highly fragmented and mainly dominated by small players.
 
2- Due to the lack of organized players in the segment, these small players or dealers do not have varieties of the construction machines; they usually keep general equipment like Backhoe Loaders, Cranes or Excavators. Generally, buyers face challenges getting specialized machines in used segment. With the emergence of few organized players like Equipment One Stop, is helping buyers make a maximum use of the segment.
 
3- The reach of local dealers in used segment is also very limited,  For example- a local player in Pune (Maharashtra) may not have reach outside Pune, but an organized player is not only limited to one state or one region but provides services across the country.  Few online players like Equipment One Stop, Infra Bazaar, Quippo are trying to give wings to the Indian used Construction equipment market and making the segment more credible.
 
4- It faces the lack of consistency in the demand, as the segment is mostly dominated by the smaller players. The segment also lacks the professionalism and credibility.
 
5- Buyers face challenges in getting well-maintained used construction machines. Generally, people who already decided to sell the machine do not care the machine properly. The owner must understand that more the machine is in condition, the better resale price the owner will get.
6- In the used construction equipment segment, buyers hardly get the technologically sound machines, is also one the major challenge faced by the segment. But few online players like Equipment One Stop is having a wide range of products across the country, they are capable of meeting the customer’s requirement.
 
7- Even selling second-hand machines are also a matter of concern as the segment is not fully organized in India. The online platforms are credible players where sellers can post the details of the machine which can attract the buyers from across the country, the market as a whole yet to be developed in the country.

5 Most Demanding Construction Machines You Can Buy in 2017

The demand and sales of construction equipment are likely to continue in 2017 after a significant growth in 2016 on the back of demand from Roads & Highways sector. The government investments of Rs.3.96 lakh crore in 2017-18 for India’s infrastructure development will further boost the country’s heavy construction equipment industry.

As we know the investments in the infrastructure sector are the main growth drivers for construction machinery. The growths in the sales of heavy machines entirely depend on infrastructural development in any region or country.

Here we will see, the five major construction machines which would witness the demand due to the investment in Roads, Railways,  Ports and others infrastructure sector in India in 2017-18, it would drive both new and used construction equipment segment in the country.

Excavator

The excavator is the most versatile heavy equipment in the construction field. It is used for digging holes, foundation, and trenches, breaking asphalt, dragging and lifting materials, leveling area and other construction tasks. It comes in three different sizes, like Mini- excavator, Medium- excavator, and Large- excavator. The sizes are designed to meet different kinds of work at the construction sites. The big size excavators are used for flyovers and highway projects. The small sizes use for smaller road construction jobs or different other construction projects across the infrastructure sector.

The machine will witness the huge demand during 2017-18 as the government announced to pour record Rs.3.96 lakh crore in infrastructure developments. This multi-tasking construction equipment will be used for various types of construction projects.

Backhoe Loader

This is the most popular heavy construction machine, it alone constitutes around 45 percent market share of Earthmoving equipment due to its versatility and multi-tasking ability. The machine used for small demolition, digging holes, paving roads, breaking asphalt, laying pipes, setting up drainage system, transport heavy items with the help of various attachments.

This multi-purpose heavy equipment will also get a boost from the infrastructure investments in the country. Various market reports suggest the growth of Backhoe loaders in India is very optimistic over the period of the next few years.

Motor Grader

It is one of the important Earthmoving equipment, is used to create a flat surface during the road construction process. Its long blade helps in creating a flat surface during the grading process of road construction. It’s generally used for construction and maintenance of gravel road and dirt roads. While building paved roads, it is used to prepare the base course to create a wide flat surface on which asphalt is placed.

It is also used for Leveling of soil, Spreading of soil & aggregates etc, Trenching, land grading, moving earth from one place to another, Ditching and various other tasks.

The sales of the Motor grader likely to get a boost from the budgetary allocation of Rs. 2.41 lakh crore for the development of transport infrastructure alone, including Railways, Roads and Ports sectors.

Compactor

The compactor also known as Road roller machine, it is used for the construction of the roads. The machine would surely be in the demand in 2017-18 as the Union Finance Minister has allocated Rs. 64,900 crore for construction and expansion of Highways and also identified to construct 2,000 km of coastal roads.  The compactor is used for compacting soil, concrete, gravel or asphalt during road construction and foundations process.  It’s generally used for compressing the surface.

Asphalt Mixing Plant

Asphalt mixing Plant is one of the major road building equipment.  The government announcement for expansion of the highway network in the country will continue to drive the sales of Asphalt mixing Plants in 2017. The government has planned to build 42 km of road per day.

Even the sales of used construction equipment will also be in demand as many small and big contractors also prefer using second-hand construction equipment.

Rs.2.41 Lakh Cr Investments in Transport Infrastructure Would Drive The Sales of Road Building, Earthmoving Equipment

The investments in infrastructure sector are the key growth drivers for the construction equipment industry. The road building and earth moving equipment are expected to drive overall Indian construction machinery market in 2017-18 on the back of big investment announcement for transportation sector in Budget.

India’s Finance Minister Mr. Arun Jaitley gave transport sector the ‘Uber’ moment by allocating a huge Rs. 2.41 lakh crore to build and modernize country’s Railways, Roads and Ports sectors in 2017-18. The investment would help in boosting the demand for road building and different types of earth moving and material handling equipment across the country during the period.

In India, Earthmoving machinery and road building equipment alone consist around 78 percent of market share of Indian construction equipment industry. The Rs. 2.41 lakh crore proposed investments in transport sector indicate both segments would surely drive the market in 2017-18.

For the road sector, Mr. Jaitley has allocated Rs. 64,900 crore for construction and expansion of Highways and also 2,000 km of coastal connectivity roads will be developed in the next financial year.

In addition, The Government has allocated a sum of Rs. 19,000 crore towards Pradhan Mantri Gram Sadak Yojana (PMGSY) in 2017-18 to complete the current target under PMGSY by 2019, and together with the contribution of States, an amount of Rs. 27,000 crore is to be spent on PMGSY in 2017-18. The pace of construction of The Pradhan Mantri Gram Sadak Yojana (PMGSY) has accelerated to reach 133 km roads per day in 2016-17, as against an average of 73 km during the period 2011-2014.

This investment on building rural roads and highways would create the demand for different road building equipment like Motor Grader, Chip Spreader, Cold Planers, Compactor, Paver, Paving Plant, Asphalt Mixing Plant, Road Roller Machine and others. Both new and used road building equipment will witness the demand during the period.

The Railways Ministry will lay down 3,500 km railway tracks in the next financial year, up from 2,800 km in 2016-17 and also announced to redevelop at least 25 stations. The government unveiled the largest-ever rail budget of Rs. 1.31 lakh crore for the next financial year.

In the budget, The Finance Minister said, “A new Metro Rail Policy will be announced with focus on innovative models of implementation and financing, as well as standardisation and indigenisation of hardware and software. A new Metro Rail Act will be enacted by rationalising the existing laws to facilitate greater private participation and investment in construction and operation.”

Commenting on the Budget, Mr. Dimitrov Krishnan, Vice president and Head of Volvo CE India said, “The agriculture, housing, rural development, and infrastructure sectors, in particular, will benefit from the increased outlays set aside for them in this Budget. In particular, with the record INR 3.96 lakh crores allocated to infrastructure, we can look forward to greater activity in the construction of roads, railways, and ports. We can expect high demand for construction equipment and, as a company, Volvo CE is looking forward to play a role in India’s infrastructural development. Overall, this budget is a blueprint for sustainable long-term growth in our country, and execution of these strategies will be key now for the rest of the year.”

The investments of Rs. 2.41 lakh crore for Railways, Roads and Ports infrastructures in 2017-18 are set to drive different kinds of earthmoving equipment such as Backhoe Loaders, Excavators, Skid steer loaders, and others, Material Handling equipment such as Cranes, Tower Cranes, Mobile, Tippers, Haul Trucks and others, and Concreting equipment like Concrete Batching plant, Concrete Mixer, Concrete pumps, Shotcrete Machine and others.

Source: Information has been obtained from GoI

Budget 2017-18: Record Rs. 3.96 lakh crore Allocation for Infra Set to Drive Construction Equipment Industry

The budget 2017-18 has given the much-needed push to country’s infrastructure sector. The government has announced to invest Rs. 3.96 lakh crore in creating and upgrading the infrastructure of the Asia third largest economy in the next financial year.  In the last budget, the government had allocated the investment of Rs 2.21 trillion for 2016-17.

The government has allocated 18 percent (Rs.3.96 lakh crore) of the total budget allocation, to build and modernize roads, railways, shipping, airports and others. The total expenditure in Budget for 2017-18 stands at Rs. 21.47 lakh crore. The government has made record spending to improve strained infrastructure of the world’s second most populous country.
For the development of the road sector, the government has allocated Rs. 64,900 crore for Highways in next financial year, up from Rs. 57,976 crore in 2016-17. Further, the government has identified the construction and development of 2,000 km of coastal roads to facilitate better connectivity with ports and remote villages.
The government has set a target to build 42 km of roads per day.
For the modernization and up-gradation of railways, Railway lines of 3,500 km will be commissioned in the next fiscal, as against 2,800 km in 2016-17. The government also announced to redevelop at least 25 stations. The total capital and development expenditure on Railways has been pegged at Rs. 1.31 lakh crore for the next financial year.
The allocation for shipping sector has gone up to Rs 1773 crore from Rs 1531 crore in the last budget. The government has allocated Rs 600 crore for Sagarmala programme.
The transportation sector alone has been allocated Rs. 2.41 lakh crore, including Rail, Roads, and Shipping in 2017-18. The Finance Minister said, “This magnitude of investment will spur a huge amount of economic activity across the country and create more job opportunities.”
While speaking on upgradation of Civil Aviation infrastructure, Mr. Jaitley said that the Select airports in Tier 2 cities of the country will be taken up for operation and maintenance in the PPP (Public – Private Partnership) mode.
In the budget, Finance Minister Mr. Arun Jaitley has taken various measures to boost the construction sector of the country. He has given much-needed relief to affordable housing, now the government has decided to grant infrastructure status to affordable housing, the move is expected to attract investors and reduce costs for developers.
Further, the government announced to build one crore houses for houseless and those living in ‘Kutcha’ houses by 2019. For the financial year 2017-18, the allocation for Pradhan Mantri Awaas Yojana (PMAY)-Rural has been increased to Rs 23,000 crore from Rs.15,000 crore in 2016-17, it will give a boost to construction activities in rural India.
The Indian government planned to lay down the Optical Fiber Cables spread over 1,55,000 km and connect more than  1,50,000 gram panchayats with high-speed broadband connectivity by the end of 2017-18.
Commenting on Budget, Mr. Vipin Sondhi, Managing Director & CEO, JCB India Ltd. said, “From earthmoving and construction equipment industry’s perspective, we till now witnessed that the roads and highway sector leading the growth momentum, however to really create sustainable growth, other sectors needed attention. With this budget the focus has broadened and now includes sectors like railways, agriculture and real estate with emphasis on affordable housing. A record investment of Rs. 3,96,135 crore for infrastructure, 1.31 lakh crore for railways is a big boost to the economy and a step in the right direction.”
The government commitment towards the expansion of country’s infrastructure development helped the construction equipment industry in 2016. Last year, the sales of the construction equipment and construction vehicles drove on the back of government investment in various infrastructure projects.
The huge Rs. 3.96 trillion allocations for infrastructure sector is the good news for the construction equipment and heavy machinery manufacturers like JCB, Volvo CE, Tata Hitachi, Komatsu, SANY, Caterpillar, and others. Also, Heavy commercial vehicle (Dumper & Tipper) makers like Tata Motors, MAN Trucks, SSAB, Ashok Leyland, and others will also get benefited from this budget.
The investment would drive the sales of various construction equipment and material handling products like Backhoe Loaders, Excavators, Cranes, Motor Graders, Bulldozers, Skid steer loader, compactor, Paver, Pavement Planer and others. As the projects hit the ground, the used construction equipment will also witness the demand.
Source: Information has been obtained from Ministry of Finance

Major Criteria in Selecting Used Construction Equipment

Nowadays, many contractors prefer buying used construction equipment rather than investing in new construction machinery in a move to reduce their overall budget. The sales of construction equipment surged in recent time as construction works started taking place in sectors like Roads, Railways, Irrigation, Urban Transportation, Housings and others in the country.

There are the few major criteria which people generally follow while buying both new and used construction equipment. At the time of buying any new machine, people mainly look for Price, Fuel Efficient machine, Reliable Product, After Sales support, and technologically advanced equipment, same goes for buying used machines except After Sales support services from the seller.

Here we will see why people follow the above-mentioned Criteria at the time of purchasing used construction equipment.

Price

Pricing is the most important concern at the time of purchasing any used construction equipment. The purpose of buying second-hand equipment is to save money; therefore people ensure they are getting the right kind of machine in minimum price which helps them reduce their overall budget. So when you go to buy used machine make sure the seller priced its machine appropriately as per the current condition of the machine. Ensure the machine is fit and maintained, else you will have to spend more in repairing and servicing the used equipment, which is the costly affair.

Fuel Efficient Machine

Whether you buy new construction equipment or used one, fuel consumption is the main concern for the buyer; therefore people look for the fuel efficient construction machine so that they could reduce fuel cost in a longer term. Thus, it is suggested to double check the fuel efficiency of the machine. Whether you are buying new construction equipment or used machines always prefer fuel-efficient machine over fuel consuming machine, though you have to pay a little more. Heavy equipment consumes a huge amount of fuel.

Reliable Product

A product becomes a brand after producing quality products and services for several years, which make it a reliable product. There are no guarantees of efficiency and durability of the unreliable brand. At the time of buying used machine, people must prefer the machines from well-known companies because these machines are made with durability and productivity in the mind which already proven.

Technology

The latest technologies in construction equipment are helping the contractors in several ways, from increasing productivity to remotely control the machines. So even at the time of buying used machine, prefer the equipment equipped with technology if available in your budget.