Here’s How Passage of GST Bill Will Drive Material Handling Equipment Market

After Goods and Services Tax (GST) bill passed in the Parliament, the e-commerce and logistics companies will now need huge numbers of warehouses across the country, which will lead to fetch huge investment to set-up number of warehouses in the country. The demands of warehousing in the country have increased in last few years after the emergence of e-commerce business.

As we know, rising number of warehousing will require huge amount of material handling equipment for placing and carrying the goods to one place to another and avoids the damages. Therefore rising number of warehousing in the country will drive further demand of material handling products and manufacturers are likely to see better sales in coming years as more warehouses will start coming up in India.

Passage of GST Bill will now encourage e-commerce, manufacturing companies, Logistics companies to shift to advanced and big size of warehouses across the country. As government allowed 100% FDI (Foreign Direct Investment) in warehouses, would also encourage the foreign players to get into the construction of warehousing. Earlier warehousing was only limited to metro and big cities, now the demand would shift to tier-II and tier-III cities as well, which could lift the sale of popular material handling equipment like Forklift, Conveyors and other.

Property consultant JLL India’s report said, “The existing, top warehousing hubs are Delhi-NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. These eight city hubs put together had a cumulative supply of organised Grade-A and Grade-B warehousing space of around 97 million sq ft in 2015 and this is expected to grow to around 116 million sq ft by the end of 2016.”

It further adds GST will result in emergence of new hubs like Belgaum, Bhubaneshwar, Coimbatore, Goa, Guwahati, Indore, Jaipur, Kolhapur, Lucknow/ Kanpur, Ludhiana, Nagpur, Patna, Raipur, Ranchi, Vapi and Vijayawada.

Last month, Amazon India has opened its biggest fulfilment centre in Sonipat, Haryana, the warehouse covers the area of 200,000 sq. ft, and this is Amazon India’s 22nd warehouse in the country. Recently Mr. Ram Vilas Paswan, Minister of Consumer Affairs, Food & public Distribution announced that Central Railside Warehouse Company (CRWC) has planned 10 new warehouses at rail heads. The more warehousing comes up in the country, the sale of material handling products will jump.

As per the media reports, Asia’s leading provider of sustainable urban solutions company, Ascendas-Singbridge Group planned to put separate fund to invest in warehousing segment in India. The company would set up Logistics Park on 50 to 100 acres of land in the vicinity of major cities. There were also reports that, Dutch pension fund manager APG and U.S based company Warburg Pincus are also planning to invest in modern warehouses in India, the investment in warehousing indicate the future requirement of equipment in India in coming years.

Due to rising number of warehousing in India, various material handling products such as Forklift, Conveyors, Stacker, Hand pallet truck, electric towing truck, Movable Dock, Crane, Shelves and other different machinery sell would jump in near future.

As per the report of CARE Ratings, the Indian logistic industry is projected to grow at a Compound Annual Growth Rate (CAGR) of 15-20% during FY16-FY20, the rapid expansion of logistics industry is directly proportional to the rise of warehousing sector.

Sagarmala Programme Will Require Huge Amount of Construction Equipment

As we are aware, the demand of construction equipment only emerges when infrastructure developments occur in any country. In recent times, we have seen almost all the reports based on the demand of construction equipment projected the huge requirement of different types of construction equipment in India by keeping various infrastructure projects in mind, such as roads, ports, railway, airports, smart cities, public transportation infrastructure and others.

Government of India has launched the Sagarmala Programme with the aim of modernising port-led development in the country and exploit the potential of India’s approximately 7,500 km long coastline and 14,500km of potentially navigable waterways.

The programme involves drawing up a National Perspective Plan (NPP) for Port Modernization & New Port Development, Port Connectivity Enhancement, Port-Led Industrial Development and Coastal Community Development. As part of the NPP, total 173 projects have been initially identified across the programme objectives which will result in significant investment in maritime infrastructure, create employment, reduce logistics cost and boost merchandize exports over the next decade.

The port-led developments indicate the requirement of construction equipment in the country. The development would drive the sale of construction machinery in the country and manufacturers could see the rise in their sell in coming future.

As per the official estimates, the ambitious Sagarmala Programme will mobilize more than Rs. 4 lakh crore of investment and will be able to create 1 crore new jobs, including 40 lakh direct jobs in the next 10 years.

For Port Modernization & New Port Development, 50 projects have been identified to increase the port capacity from 1400 MMTPA to 2500 MMTPA by 2025, at an investment of Rs. 1 lakh crore. For promoting port-led industrial development, 14 Coastal Economic Zones covering all the Maritime States and Union Territories have been proposed.

To enhance the port-connectivity to the country’s production and consumption centres, 65 projects have been proposed at an investment of more than Rs. 2 lakh crore. This includes10,000 km of last mile port-connectivity infrastructure, 12 new freight expressways, heavy haul rail corridor to transport coal, new pipelines for transporting crude and petroleum products, development of prioritized inland waterways and new multi-modal logistics hubs, government said the official statement.

Last month (July 20), Union Cabinet has approved the incorporation of Sagarmala Development Company (SDC) under the Companies Act, 2013, with an initial Authorized Share Capital of Rs. 1,000 crore and a Subscribed Share Capital of Rs. 90 crore. The SDC would provide equity support to the project Special Purpose Vehicles (SPVs) and funding support to the residual projects under the Sagarmala Programme.

Government recently said, it has indentified six potential new ports under Sagarmala Programme are; Vadhavan in Maharashtra, Sagar Island in West Bengal, Paradip Satellite Port in Odisha, Enayam an Sirkazhi in Tamil Nadu, Belekeri in Karanataka have been identified and Duggirajupatnam, Andhra Pradesh.

As it is projected Rs. 4 lakh crore of investment mobilize under the programme, various construction equipment such as; Excavators, Backhoe loaders, Cranes, Graders, Batching plant, concrete mixer, Tippers and other different types of construction machinery demand will rise in the country.

Along with port-led development, seven Multi-Modal Logistic Parks (MMLPs) has been also proposed in Chhattisgarh, Madhya Pradesh, Odisha, Telangana, Uttarakhand and West Bengal under Sagarmala Programme.

During recent United States visit of Mr. Nitin Gadkari, Minister for Road Transport and Highways and Shipping, American ports have shown their interest to participate in the port-led development in India, which is to mobilize huge investment.

The port development will not only raise the demand of construction equipment, but also drive the sale of material handling machinery as increased port capacity will require huge amount of material handling equipment to load and unload the goods and container at the ports across the country.

Fork lift truck, Mobile crane, Conveyors, Stackers, Straddle carrier, Ship loaders, Tug-master, Container crane, Front/side loader, Bulk material handling, Automated storage and retrieval system and different other machinery sell would jump after ports will increase its existing capacity.

According Mr. Gadkari, the Sagarmala Programme could save annual logistics cost close to Rs 35,000 crore.

Forklift is One of The Versatile Materials Handling Machinery

Forklift or Fork Truck is one of the most used and versatile machine in Material Handling Equipment (MHE) segment. The Forklift used to move and lift construction and goods material in short distance at a construction site, industrial units, warehousing and across the sector.

The forklift is one of the major materials handling equipment, at construction sites; it is used for carrying various construction materials across the sites. Usage of Forklift, smoothen the work at the site and help the workers to move the material like bricks, steel and other material easily. At Warehouse and industrial unit, Forklift has proved its worth for several years, it plays a key role in loading, unloading and placing the goods items at the right place and help in avoiding the damage of the goods products.

Along with Crane, it is one of the other major used MHE at Port; it carries the container and help in loading and unloading these containers at the Port across the world. The smooth operation at Port only possible because of Forklift, it is said, this machine plays the intermediary role between huge cranes, trucks and warehouses or Logistics Park.

Many of us just understand Forklift and its general usage, but we are not aware of various types of Forklift, which are designed and made for specific work at the site. One of the most popular or common machine is Counterbalance Forklift Trucks, when we think of Forklift, many of us think of this machine, for example, when people think of Backhoe loader, they think of JCB Backhoe loader, similarly when people think of Forklift, they think of Counterbalance Forklift Trucks. This machine is available in electric, diesel and gas.

The other different forklifts are; 3 Wheel Counterbalance Forklift Trucks, Reach Trucks, Hand Pallet Trucks, Powered Pallet Trucks, Sideloaders, Teletrucks and other.

The major companies which manufacture different types of Forklift are, Godrej, Nilkamal, Escorts, Voltas Material Handling Equipment, Toyota Material Handling India, Caterpillar, Komatsu and others.

People who prefer second-hand Forklifts, should look at various online platform to buy the used Forklifts. An emerging e-commerce portal for second-hand construction equipment and material handling is www.equipmentonestop.com, which has extensive varieties of different types of equipment including forklift.

As Indian economy is growing and industrial and warehousing sector is expanding, it would help the sale of different types of Forklift in near future.

Construction Equipment Market Back on Track as Infra Projects Started Rolling Back

Infrastructure investment and construction activities on ground mainly roads and highways have brought the construction equipment industry on track after a gap of four years. All the international and domestic research companies and industry experts have projected the positive growth in heavy equipment industry.

Recently, Global market research company MarketsandMarkets projected global construction equipment market to reach USD 116.20 billion at a CAGR growth of 4.11% by 2021 and mining equipment market is projected to grow at a CAGR of 6.42% to reach USD 136.03 billion during forecast period.

Increasing number of infrastructural projects, rapid urbanization, robust economic growth and revised government regulations on mining will help construction market in Asia-Pacific region to dominate the market. Key countries like India, China and Japan are estimated to record a highest CAGR during the forecast period, said the report.

Last month, a report released by Off-Highway Research also said Backhoe loader (an Earthmoving machine) sales are expected to increase by over 32 percent in next 5 years on the back of investment in infrastructure. The sale will jump to 28,000 machines by 2020 from 21,192 units sold in 2015.

Indian heavy equipment market shrunk after 2011 when in a single calendar year 52,893 units of construction machines had been sold in Indian market with a growth of 21%, since then until September 2015 sector faced de-growth, only by the end of 2015, the market was recorded flat with a sale of 36,798 units, which started witnessing a revival in October to December 2015.

Mr. Vipin Sondhi, MD & CEO of JCB India told The Hindu newspaper that industry has clocked a growth of over 40% in last six months during January to June period. According to industry data shared by JCB to the newspaper, 21,869 units of construction equipment have been sold in first five months of 2016.

As 21,869 units have already been sold in first five months of 2016, indicates 2016 will end with better growth as compared to 2015, wherein entire year 36,798 units were sold.
As far as reaching a level of 2011, Mr. Sondhi told the paper, that number is likely to touch by next calendar year (2017).

Recently, National Highway Authority of India (NHAI) announced that around 1 lakh crore will be invested in road projects in 2016-17 and while talking about construction equipment industry, it said, sale of construction equipment has grown drastically.

NHAI is having around 250 projects across the country, the investment in the road and highway projects would drastically change the heavy equipment industry in the country, Coal mining activities and cabinet approval for new mineral policy will drive the sector in years to come.

Government has planned a huge investment in airports, ports, smart cities, railways, shipping, urban development, metro railways; all of them will boost the demand of heavy equipment in the country when the project will start rolling back on the ground.

Source: Information has been obtained from MarketsandMarkets, The Hindu and Off-Highway Research

Why Fuel-Efficient Construction Equipment Useful for Your Business

People associated with the construction industry are aware that this industry requires huge sums of money for smooth running the business. From small developers to big infrastructure companies often look for the way to reduce the cost of the business and make more profit.

Heavy construction equipment adds a huge amount of cost and even after purchasing these machines, developers’ need a lot of money for making it run. After buying construction machines, two major costs involve with it, one is fuel cost and another is maintenance cost.

To save the huge cost of fuelling, the end-user customers started realising the need of advanced technology to save fuel cost, which made the way for construction equipment manufactures to think beyond the traditional ways of making the machines.

There are two reasons for looking for fuel efficient machines, one is to save fuel cost another is environment, these two leads to the widely discussed subject across the world.

Therefore, all the fuel efficient machines help the owner to save money which goes into fuel expenses. Before 2015, when oil price was touching the sky, at that time running the CE would have cost more than now, so it is always better having the fuel-efficient machines in longer run.

Due to need and more demand from end-users of fuel-efficient equipment, construction equipment manufactures started realising its demand and started working on technology which consumes less fuel, give higher productivity and profitability.

So, many companies have come with different innovative solutions to meet the customers’ expectations.

Country’s leading CE Company, JCB has developed fuel efficient ecoMAX engine, which results in saving substantial amount of fuel. It’s also designed to adopt Indian conditions and emission norms of Indian government. Now JCB uses highly efficient JCB ecoMax T4i engine that is being used in most of the JCB machines.

JS120 excavator of JCB is claimed to be one of the most fuel-efficient product, it is powered by a 4 cylinder JCB ecoMax engine.

Volvo EC160E is the newest E-series crawler excavator; it featured with Tier 4 final D4 engine which is very fuel-efficient compared to its earlier model. It’s two other EC380D and EC480D excavators are also fuel-efficient. CAT claims its 320D/D L series 2 hydraulic excavators is 15% more fuel efficient.

Sweden based Construction equipment company Huddig has developed a technology called ‘Tigon Technology’, the technology gives Huddig’s Backhoe Loader higher efficiency, improved performance and lower fuel consumption.

Hybrid hydraulic excavator series of Hitachi ZH200-5B gives superb fuel efficiency with better working performance as compared to its standard model ZX200-5B.

Various leading CE companies are making fuel-efficient products to save the cost of running a construction business.

The above examples show, how CE companies started meeting the consumer demand and regularly coming up with new technologies.

Construction And Mining Sector to Drive The AMW Tipper

Tipper is one of the crucial heavy vehicles which drive the construction and mining industry. Tipper is a dump truck used to haul sand, gravel, rock, and asphalt, mostly used for these two sectors, including dumping garbage.

The sale of tippers directly proportional to infrastructure and mining sectors, the more infra and mining activities takes places the demand of tipper will go up automatically.

The sale of tippers has reduced in the last few years as both infrastructure and mining activities contracted in the country due to economic slowdown and other various reasons. But after the government ambitious aim to revive country’s infrastructure sector and roll back to the mining activities, bring the good news for M&HCV players who are manufacturing tipper trucks.

Mining sector rolled back after contraction of many years, recently government allocated 47 mines bearing mineral like iron ore, gold, limestone and bauxite for auction. As per the official data, in first 11 months of FY2015-16, mining industry witnessed the growth of 8.2 percent; the growth has been seen after the contraction of four consecutive years.

To meet the target of doubling the coal production to 1.5 billion tonnes by 2020, the government has decided to open the coal sector for commercial mining to private sectors after 40 years.

On infrastructure front, Recently Road Transport & Highways Minister Mr. Nitin Gadkari said, government aims to invest Rs 25 lakh crore in roads, railway and shipping infrastructure in next three years and announcement of record budgetary allocation of Rs 2.21 lakh crore for infra sector by Finance Minister Mr. Arun Jaitley during his budget speech, indicates huge construction activities is going to take places across the country, which require huge amount of various types of construction equipment along with Tipper.

Therefore Tipper market has been recovering as government has accelerated the speed of road and highways construction activities in last two years.

As mining activities have started rolling back, road and highways co
nstruction have taken pace and there is an inflow of huge investment in infra sector; this would lift tipper demand in the country, in which AMW Tipper is expected to get a better share along with other major players.

AMW manufacture varieties of tippers for a specialised purpose for both

Construction and mining sector, such as; Model -2518TP (Makes quarrying and construction work easier to handle), 1618TP (Ideal Tipper Hilly terrain), 2523TP Box Body suited for all off-road load challenges), 2523TP Rock Body (suited for all mining applications), 3118 TP (perfect tipper for all hauling operations) and others, claims the company.

AMW tippers are suited for the rough and tumble of mining & quarrying operations, as well as for carrying bulk loads in construction and infrastructure industries. The trucks are fitted with Euro III engines that deliver 180/235-280 HP and 1100 maximum torque. Heavy duty double acting shock absorbers and integral power steering with double UJ ensure a smooth and stable ride.

AMW Tipper model-2518, it is a large fleet of truck and it makes work easier at both mining and construction sites. In this segment, it is available in rock
body cab and cowl to provide better flexibility. As far as specification of this model is concerned, it is fitted with a 5.9 litre 6-cylinder diesel engine. It has an engine capacity of 5,883 cc and top speed is 78km/h. It has fully synchronized gearbox allows comfortable and distinct gearshifts without vibration or noise, enhancing performance and fuel efficiency. The 380mm diameter, power-assisted clutch ensures effortless gear shifting, longer life and reduced slippage. To make the driver feel comfortable and tireless work at construction site, company fitted AC in its cabin with large comfortable bed and interior designed noise-free for better driving experience.