The size of the Indian construction equipment market was estimated to be about Rs 332 billion in 2015. Between 2010 and 2014, it grew at a compound annual growth rate (CAGR) of around 21 per cent. This market can broadly be divided into five categories – earthmoving equipment (comprising 56 per cent on a revenue basis in 2014), concrete equipment (19 per cent), material handling equipment (13 per cent), road construction equipment (9 per cent) and material processing equipment (3 per cent).
Earthmoving equipment, the largest category in the equipment market, is primarily deployed in mining operations. This equipment includes excavators, backhoe loaders, bulldozers, skid-steer loaders, trenchers, motor graders, motor scrapers, crawler loaders and wheeled loading shovels.
In 2014, 45,405 units of mining equipment were sold in India. Backhoe loaders comprised around 66 per cent of the total sales (30,000 units), followed by crawler excavators (25 per cent) and wheeled loaders (4 per cent). Between 2009 and 2014, the sale of mining equipment grew at a CAGR of around 11 per cent from 27,335 units to 45,405 units. Notably, the sale of mini excavators recorded the fastest growth at a CAGR of about 50 per cent, from 73 units in 2009 to 550 units in 2014.
Key manufacturers
India’s equipment industry is highly fragmented. It comprises the organised segment (large private firms that cater to small-, medium- and large-scale projects) and the unorganised segment with a number of stand-alone private contractors that cater to only small-scale projects. Domestic players have also partnered with global majors, thereby obtaining access to advanced technology as well as global experience in project management.
BEML Limited is the only public sector company in the equipment industry. Major private players include Action Construction Equipment, Escorts Construction Equipment, JCB India, L&T Construction Equipment, Mahindra Construction Equipment, Terex India, Tata Hitachi Construction Machinery and Greaves Cotton Limited.
New products and developments
In 2014-15, a number of efficient new products were launched by equipment manufacturers. The key areas of improvement and innovation related to higher capacity, improved hydraulic systems, better engines, and greater fuel saving.
Emerging mining technologies
The share of underground (UG) mining in India has been declining owing to the unavailability of deep reserves, huge capital requirements, long gestation periods, high risks, high manpower costs, low productivity, and non-availability of indigenous equipment for UG mining. In contrast, opencast (OC) mining is cost-effective, ideal for high capacity mines and uses equipment which has lower energy requirements.
OC mining: Various technologies have been developed for OC mining in recent years. For overburden (OB) removal and mineral production, equipment such as larger-size draglines, surface miners in OB benches, surface miners for selective mining, ripper dozers for removing OB near villages, high capacity motor graders and vibratory road rollers, and ripper dozers to establish and maintain haul roads are deployed. Similarly, transportation from mines to the loading point involves the use of in-pit crushing and conveying systems; angle conveyors including high-angle conveyors, skip conveyors, tube conveyors and flexible conveyors; as well as a greater number of silos for faster loading.
UG mining: As far as UG mining is concerned, high speed drivage equipment is used for the drivage of shafts, inclines and drifts; and strata bunkers and belt conveyors for modernisation of despatch and mineral evacuation. Mining methods are mechanised by using miner bolters for faster drivage; longwall/shortwall/highwall technology; hydraulic mining; and raise borers for steep seams. Other developments in UG mining include replacement of hand-held drills with pneumatic drills, hydraulic drills, universal drill machines and jumbo drills; use of crushed OB with water to fill up voids; high speed stowing; and use of ventilation planning software.
Drilling and blasting: Some emerging techniques for drilling in mines include rotary-cum-down-the-hole combination drills, rig control systems for surface blast hole drills, multi-charging technology to improve the drill-hole diameter, and geostatistical modelling. Meanwhile, for blasting, the adoption of pre-blast surveys, followed by a careful selection of explosive and detonation techniques, is gaining traction. This also helps in determining the after-effects of blasting.
Crushing and conveying: In the past few years, there has been a gradual shift from conventional surface mining to in-pit crushing and conveying (IPCC) systems. IPCC involves the use of fully mobile, semi-mobile and fixed in-pit crushers coupled with conveyors and spreaders (for waste) and stackers (for ore) to remove material from an open-pit mine. A key feature of the IPCC solution is that, instead of using large fleets of dump trucks, ore and waste are removed from the pit by conveyors, thus saving energy.
Excavation and loading: The conventional shovel-dumper combination is now being upgraded to higher capacities. Shovel sizes have increased to 40-50 cum. Similarly, electric rope shovels of higher capacities than the earlier 5-10 cum are now being used. Other equipment such as higher capacity draglines with a bucket capacity of 50-55 cum and a dumping radius of over 100 metres, hydraulic shovels with a bucket capacity ranging from 12 to 20 cum, 850 horsepower dozers, etc. are also gaining traction.
Issues and challenges
Higher demand for low-cost equipment: Manufacturers in China, Korea and Hong Kong have been taking advantage of the lower cost of equipment production in these regions. Increasingly, there has been a trend of importing cheaper equipment mainly due to export incentives given by the respective exporting countries and India’s favourable import duty regime. Meanwhile, the Indian Construction Equipment Manufacturers’ Association has urged the government to regulate the import of second-hand equipment to protect the domestic sector.
Lack of soft financing by financial institutions and commercial banks: The mining equipment industry is highly capital intensive and involves high lead times in manufacturing. In addition, equipment manufacturers face issues such as high interest rates and low depreciation rates (15 per cent per annum). Banks and non-banking financial companies face rising bad assets in the mining equipment industry. The share of mining in stressed advances increased to around 18 per cent in 2014-15 from around 4 per cent in 2010-11. As a result, financial institutions have become extremely cautious in lending to projects in the mining sector.
Lack of adequate skilled manpower: It is estimated that about 2 million trained operators/mechanics would be required in the construction equipment industry by 2023. For the mining sector alone, about 100,000 operators and maintenance personnel would need to be trained. The central government’s Skill India initiative and the constitution of the Infrastructure Equipment Skill Council by equipment manufacturers augur well for the segment.
