Construction Mirror Magazine November 4th Anniversary Golden Issue 2017 by Construction Mirror

EDITORâ&#x20AC;&#x2122;S DESK Dear Reader!

Editor P. S. Syal Sub-Editor Ambika Gagar Associate Editor N.P.K. Reddy Editorial Advisor Priyanka Roy Chaudhary Design & Production Sr. Designer - Mukesh Kumar Sah National Business Head Subhash Chandra s.chandra@constructionmirror.com Business Head-West & South Pradeep Kumar - 09702818098 pradeep.k@constructionmirror.com Sales & Marketing Neha Chauhan neha@constructionmirror.com Hemant Kumar hemant@constructionmirror.com

I am delighted to present our 4th golden anniversary issue of Construction Mirror. By the grace of your love we complete our 4 years in the service of construction equipment companies and in construction infrastructure. Hope with your love and support we will continue this in many more upcoming years and serve you the best of CE world. India is building up its back bone and the back bone of a country is its roads, if the roads are well connected to one end to the other ends it means this meets the basic need for a country to grow economically and physically. The government approved around 7 lakh crore to road projects only, hence there target is to complete this projects by 2022 under the given budget, however there is long way to cover up the target which is not easy at all. On the other hand under the various schemes railways increasing its revenue up to 12 percent on e- ticketing, recently railway projects account for over 60 percent of the 331 central sector projects that are facing cost overrun of Rs 1.5 lakh crore due to various reasons. Talk about the local metro in Mumbai it itself getting more and more projects to develop more metro lines which is of 15,088 crore partly. Construction and CE companies are coming up with all new advance technologies like Mahindra came up with G75, LiuGong launching their equipment in EXCON 17 and list is on which we will find out inside our story. Before getting into reading I would like to conclude thanks to my esteem clients without their support we have not been able to reach to this height, many thanks to the writers for their valuable supports, to the team members and to my readers.

Ms. Manju manju@constructionmirror.com Subscription Praveen Chauhan Email: subscribe@constructionmirror.com Call: 011-6510 4350, 011-22758660

All rights reserved by all events are made to ensure that the information published is correct; Construction Mirror holds no responsibility any unlikely errors that might occur. Printed, published and owned by Usha, Published from 13/455, Block No. 13, Trilok Puri, Delhi-110091 and printed at Bright Tree, C-40, Gate No.-4, Okhla Industrial Area, Phase-II, New Delhi-110020. E-mail: brighttreesolutions@gmail.com Editor: P. S. Syal

Happy Readingâ&#x20AC;Ś. Thank you, Please give us your feedback at editor@constructionmirror.com For more details check out our Website www.constructionmirror.com/net & you can also visit our facebook page www.facebook.com/constructionmirror

Editor

INTERVIEW

Contents Cover Story

||Sachin Nijhawan||

INTERVIEW

||Vice President and Business Head|| ||Mahindra Construction Equipment||

Focus: Mining and Construction Equipment

Company Profile

Mining and Construction Equipment Sector Revenues on an Uptrend

Guest Article: Shriram Automall

||Jasmeet Singh||

||Head Corporate Communications and External Relations|| ||JCB India Limited||

Backhoe Loaders Demand Outlook Remains Grim in the Short Term

Your Trusted Partner for Acquisition & Disposal of Pre-Owned Construction Equipment

Focus: Road Infrastructure in India

44 ||Debasis Bhattacharya ||

INTERVIEW

||Head-Sales, Marketing & Product Support || ||Ajax Fiori Engineering (I) Pvt. Ltd.||

Focus: Challenges in Setting Up Smart Cities

||Director Sales & Service|| ||Liugong India Pvt. Ltd.||

INTERVIEW

74 ||Pradeep Sharma|| ||President||

||Action Construction Equipment Ltd||

Urbanization Problems and Challenges in Setting Up Smart Cities

Focus: India’s Civil Aviation Industry

||Nischal Mehrotra||

Road Infrastructure in India: Trends and Outlook

India’s Civil Aviation Industry Least Penetrated, Largely Untapped With Huge Growth Opportunities

Focus: Smart Digital Solutions in Mining Industry

Future of Smart Digital Solutions in Mining Industry

INTERVIEW

Focus: Automation Industry From Industry 1.0 to 4.0: Definition-Development-Solutions

||Ajay Kudesia||

||Vice President - Sales and Marketing||

||Kryton Buildmat Co. Pvt. Ltd. ||

Focus: Indian Tyre Industry

INTERVIEW

Indian Tyre Industry: Flattish Over the Last 3 Years

102

Focus: Lubricants Sector

||Y. Srinivas Reddy|| ||Managing Director|| ||Bevcon Wayors Pvt. Ltd.||

Indian Lubricants Sector: A Brief Review

INTERVIEW

106 Focus: Indian Cement Industry Growth

An Overview of the Indian Cement Industry Growth

116

Guest Article

||Mr. Samir Gandhi || ||Director|| ||Gandhi Automations Pvt. Ltd.||

Focus: India Roofing and Cladding Industry

134

122

||Rajinder Raina|| ||G.M. - Marketing|| ||Escorts Construction Equipment||

India Roofing and Cladding Industry: Prospectives and Challenges

Guest Article

Product Info

Po Tech India

BKT

112

KYB Conmat

130

Apollo Inffratech Group 133 Sun Roffing Company

133

Company Profile Malik Trading

136

BKT

114

Schwing Stetter

137

Tenders / Projects Tenders

138

Projects

139

Advertisement Index

140

Event Diary

141

News: Of the Month

Rebound of Cement Demand Delayed to 2018: ICRA

As cement offtake remained weak in the first half of the current fiscal ending September, ratings agency ICRA forecasts demand to bounce back from the last quarter, pinning hopes on housing and infrastructure to revive demand. As the Real Estate Regulatory Authority (RERA) affected real estate activity, with sand shortage and GST implementation compounding problems for the cement sector, the ratings agency has revised its earlier

estimate that demand will be back by Q3. During the first five months of the fiscal year 2017, cement production reported a de-growth of 3.2% to 117.3 million tonne as compared to 121.2 million tonne during the same period last year. While sand shortage and labour unavailability effected offtake in the North, RERA negatively impacted construction activity in the west with southern states like Tamil Nadu and Kerala grappling with issues like

drought (which impacted rural offtake) and weak housing activity, a release by the agency said. “The recent ban on sand mining in Bihar is likely to impact the sales volume growth in the eastern region, going forward. Monsoons impacted the demand in August – September 2017 across various regions. Further, the demand in October 2017 is likely to be subdued by extended monsoons in some regions and continued sand availability issues (in Punjab, Uttar Pradesh and Tamil Nadu),” Sabyasachi Majumdar, group head at ICRA Ratings said. On the pricing front, prices remained “higher than traditionally what has been witnessed in the monsoon impacted Q2s till FY2016.” Costs also increased as pet coke prices firmed up by 12%-15% on YoY basis in the quarter ending September while coal and diesel prices also stayed on an upward trend. “Subdued real estate activity and sand unavailability in few states is expected to delay the cement demand recovery to Q4 FY2018. The demand growth is likely to be driven by a pick-up in the housing segment – primarily affordable and rural housing, and infrastructure segment – mostly road and irrigation projects. From the profitability perspective, the industry’s ability to maintain cement prices going forward remains critical, given our expectations of higher power, fuel (increase in coal and pet coke prices) and freight costs (increase in diesel prices) during FY2018,” said Majumdar.

Cement Demand Growth Expected to be Around 3.5%-4% During FY18: ICRA

Cement demand growth is expected to be around 3.5%-4% during the current financial year, a downward revision against the earlier estimate of 5% as there has been a delay in the revival of cement demand during the first half of FY2018, ICRA said.

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The demand is expected to rebound from Q3 of FY18, according to the ratings agency even as Q2 is expected to be muted owing to the monsoons and GST implementation issues. “The demand in Q1 FY2018 was adversely impacted due to sand shortage (in a few southern and northern states), implementation of the Real Estate Regulatory Authority (RERA) and slowdown in the construction activity (in West) and drought and weak housing activity (in few southern states). Although the cement demand is expected to be muted in Q2 FY2018 on account of the monsoons and the GST implementation issues, we expect the demand to rebound from Q3 FY2018. The demand growth is likely to be driven by a pick-up in the housing segment - primarily affordable and rural housing, and infrastructure segment - mostly road and irrigation

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projects,” Sabyasachi Majumdar, senior vice president at ICRA Ratings said. On the pricing front, July and August saw a decline in prices in most markets, with prices dropping by 4% - 8% in August, 2017 as compared with June, 2017. However, prices are expected to rise as demand picks up in Q3FY18. Further, given our expectations of higher power and fuel (increase in coal and pet coke prices) and freight costs (increase in diesel prices) during FY2018, the increase in cement prices remain critical from the profitability perspective. Lumpy capacity additions in the recent past have led to an increase in debt levels and some deterioration in credit metrics, although they still remain at comfortable levels for most of the larger players. In addition, rising costs continueto put pressure on the profitability margins and debt metrics of the cement companies,” Majumdar added.

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News: Of the Month

Cement Prices Jump Rs 12 Per Bag in Q2 FY18: Report

Retail cement prices jumped by Rs 12 per bag in the second quarter of this fiscal, with a sharp rise of Rs 36 in west and Rs 15 in south on a year-on-year basis, owing to rising production costs, a report said.

Cement companies will continue to bear the brunt of higher pet-coke prices that increased 13 per cent q-o-q to USD 96 per tonne in Q1 FY18, Kotak Institutional Equities Research Analyst Murtuza Arsiwalla said in the report. The profitability of cement companies too is expected to decline 3 per cent y-o-y to Rs 828 per tonne as the burden of higher production costs outweighs the benefit of a modest price increase, Arsiwalla added. All-India retail cement prices declined by Rs 8 per bag on a quarterly basis in Q2 FY18 due to seasonal weakness seen during the time of the year. The prices declined across regions, with the highest

decline in north and central by Rs 14 per bag. Cement prices in the south declined by Rs 7, while west and east regions saw prices declining by Rs 3-5 per bag on a q-o-q basis, the report said. A part of the decline may be attributable to reduction in prices on account of GST benefits in select states. A modest price increase and healthy volume growth, although dented by higher production costs, will likely underpin Q2 earnings, the report said. More importantly, the first quarter under GST could yield surprises on realisations as well as benefits from input cost credits, it said. The cement industry is likely to register 6 per cent y-o-y growth in Q2 FY18. Potential re-stocking of inventories may have helped volumes even as volume trends in the recent past have borne the brunt of GST rollout, demonetisation, and introduction of RERA, the report said.

Cement Prices to Rise in North India Following Petcoke Ban by Supreme Court: India Ratings Cement prices in northern states of India are expected to rise on the back of rising costs brought about by a ban on the use of petcoke in the Delhi NCR region from November 1, according to India Ratings and Research. Cement producers are likely to pass the hike in costs to the final consumer, leading to an increase in cement price. According to Environmental Pollution (prevention

and control) Authority’s clarification dated 27 October 2017, such ban will be applicable only in those districts of Uttar Pradesh, Haryana and Rajasthan which fall under NCR; however if the state governments fail to issue a similar notification, then the ban will automatically be applied to the whole state, impacting all cement manufacturers. Industries using pet coke and furnace oil will have to comply by the norms issued by Central Pollution Control Board latest by

31 December 2017. The top court of India had last week banned the use of petcoke and furnace oil by industries in Haryana, Rajasthan and Uttar Pradesh in a bid to control air pollution in the Delhi-NCR region which also saw the apex court banning the sale of firecrackers to contain unprecedented air pollution in the national capital and its neighbouring regions.

JSW Cement Commences Manufacturing of Concreel HD Cement at its Dolvi Unit; Announces Expansion JSW Cement has commenced manufacturing of Concreel HD cement at its Dolvi unit in Maharashtra, a move that will help the company expand its retail presence in West India. The cement division of the Sajjan Jindal-led JSW Group is also increasing capacity at its Dolvi plant from 1 MTPA to 2.2 MTPA by 2018, and will further expand it to 4.5 MTPA by 2019. The product that has already been a success in southern markets will be sold through 14

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more than 1000 retail outlets across Greater Mumbai, Navi Mumbai, Thane and Raigad district and will be available across the state by the end of this fiscal. “I am glad to see Concreel HD make its way into the western states of India with Maharashtra. JSW Cement will be increasing capacity in our Dolvi plant from 1 MTPA to 4.4 MTPA by 2018 and further expanding it to 4.5 MTPA by 2019 to cater to demand in this region,” Parth Jindal, MD, JSW Cement said. ||www.constructionmirror.com/net||

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CONSTRUCTION MIR ROR

News: Of the Month

Projects Like Bullet Train A Boon for Idle Cement Capacity: CMA

Indian cement sector is sitting on upwards of Rs 60,000 crore of “sunk investment in surplus capacities”, but expects big infrastructure projects like high speed rail corridors, bullet train and their cascading effect to spur demand, says industry body CMA. According to the Cement Manufacturers Association (CMA), the industry has 100 mt (million tonnes) of excess capacity and so, it is in a comfortable position to supply additional demand of 3 5 mt every year coming from the big projects. “Though the infrastructure projects are critical part of cement consumption and value chain but per se,

the direct cement consumption in infrastructure projects is not so high. It only contributes 20 per cent or so to the total demand for cement,” CMA President Shailendra Chouksey told. He was fielding a query on how cement demand would change in the wake of the government’s focus on big infrastructure projects such as the Mumbai-Ahmedabad bullet train. There are many other development activities that get linked to a big infrastructure project like high-speed rail corridor or the bullet train. This would lead to a lot of other activities like industrial development, trading and job creation, he added. “The real cement demand will come when these activities shall start taking place along with the corridors, which is going to be a long-term but sustainable impact of such projects,” Chouksey said.

Asked if the industry is prepared to meet rising demand in the long term, he said: “The industry is already sitting on more than Rs 60,000 crore of sunk investment in surplus capacities.” Chouksey further said: “Projects such as these would add to about 3 5 mt of additional cement demand every year. Hence, there is sufficient capacity to meet the demand for not only this project, but even for 10 projects like this on sustainable basis.” For every kilometre to elevated or underground tunnel track, nearly about 10,000 mt of cement would be consumed, which would translate into about 6 mt of cement demand in the next 5 years, he said In terms of employment creation and cement demand, he said “for every 1 million new jobs being created, the cement demand would be in the range of 20 40 mt going into housing and urban infrastructure development”. Housing will continue to remain the mainstay for cement demand for quite some time to come, Chouksey said. Globally, the Indian cement market is the secondlargest with a capacity of 425 mtpa after China, which has around 2,400 mtpa. KRH RKL ARD SBT

Cement Either Not Sold or Unutilised in India: JK Cements Administrato

With 30 per cent lesser offtake of 430 million tonnes of cement last year, due to slowdown in construction industry in the country, a similar trend is likely to continue this year as well, a top J K Cements official said . Reports of similar pattern of cconsumption in the first five months of this fiscal from construction industry coming, there will be only 70 per cent of off take of grey cement, the company Administrator (AYA) and

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Advisor, M P Rawal told reporters here. The cement industry does not want to take risk and nearly 130 tonnes of cement went either unsold or unutilised, he said adding the production this year will also be reduced drastically considering the lesser demand. As far as company was concerned, of the 10.5 million tonne capacity, it may produce seven million tonne, Rawal who is here in connection with the 26th Edition

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of Architect of the Year Awards scheduled to be held tomorrow, said. Stating that the company was not selling its grey cement to Tamil Nadu in view of high transportation cost, Rawal said that there was no proposal to set up a plant in this part of the country, fearing the availability of raw materials like lime stone. On ever increasing prices and cartel reportedly being formed by a few cement manufacturers, Rawal said, “First of all this is a competitive industry and nobody trusts each other.. In this situation there is no truth in forming cartel to increase the prices.” The changing government policies also have a major impact on the prices and even economic predictors have failed to come out with the price pattern, he said. To a query on how bullet train will help the cement industry, Rawal said that with one bullet train there will not be a big impact. NVM ROH

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CONSTRUCTION MIR ROR

Company: News

Cooper Corporation Signs MoU with Garden Reach Shipbuilders and Engineers Ltd. (GRSE) for Development of Diesel Engines for Indian Navy & Indian Coast Guard

• The association will jointly develop and manufacture efficient, path breaking power supply solutions for the Indian Navy and Indian Coast Guard Cooper Corporation one of India’s leading engine manufacturers, entered into a strategic Memorandum of Understanding (MoU) with Garden Reach Shipbuilders & Engineers Ltd. (GRSE), A Government of India Undertaking – Under Ministry of Defence for joint development and manufacturing of small and medium diesel engines for marine applications. The MoU was signed by Sri Sarvjit Singh Dogra, Director Finance on behalf of GRSE and Mr. Farrokh N. Cooper, Chairman and Managing Director, Cooper Corporation in the city today. Other dignitaries present on the occasion were Mr. Dilip Kumar Jagattar Singh DGM (I/C-DEP), CDR. Gaurav Pande, Regional OfficerMumbai and Mr. VD Sivakumar, Corporate Head Marketing & Sales, Cooper Corporation. This collaboration aims at setting up a fully indigenous product line of marine diesel engines specifically designed and developed for Indian Navy and Indian Coast Guard, a home-grown alternative to multinational brands currently available in the market. Cooper Corporation will helm the design & manufacture of these diesel engines for marine DG set application, ranging from 50 KW – 500 KW. GRSE will integrate these DG set at their Diesel Engine Plant (DEP) at Ranchi and subsequently sell it to their prospective customers – Indian Navy, Indian Coast Guard, Shipbuilders in India and abroad. Highlighting the significance of this association, Mr. 18

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Farrokh N. Cooper, Chairman and Managing Director, Cooper Corporation Pvt. Ltd said, “It’s a very proud moment for us to be associated with Government of India – Ministry of Defence and a big achievement for a company which has graduated from cast iron engine components to contemporary engines. We are glad to partner with GRSE and will provide our best-in-class marine diesel engines armed with superior design and manufacturing quality to offer efficient and path-breaking power supply solutions for the Indian Navy and Indian Coast Guard. This effort is in line with promoting Government’s Make-in-India initiative.” Expressing his views on the tie-up, Sri Sarvjit Singh Dogra, Director Finance, Garden Reach Shipbuilders and Engineers Ltd. (GRSE), said, “We are happy to partner with Cooper Corporation for the development of high quality, clean and fuel-efficient engines to meet the requirements of Indian Navy and Indian Coast Guard. This MoU will facilitate mutual sharing of best practices and expertise, making it a fine example of engineering, technology and product innovation collaboration between GRSE and Cooper Corporation.” Over the years, Cooper Corporation has consistently invested in the latest state-of-the-art technology across 75 acres of land at 11 plants in Satara with the help of experienced consultants from all over the world. The company has set-up its own R&D unit to explore the possibilities of developing new products.

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Cooper Corporation’s commitment to quality, service and product innovation has consistently kept pace with the changing market needs worldwide. The company’s rapid strides in the global market bear testimony to this fact. Cooper Corporation’s products have been accepted internationally in countries ranging from Central America, Africa, South Africa, Saudi Arabia, Bangladesh, Sri Lanka, Russia, Ukraine, UAE, Vietnam and Afghanistan. Today Cooper supplies auto parts and engine components to all leading OEMs in India and across the world from Japan to Europe and the USA. Talking about the company’s growth and future Mr. Cooper added, “Despite the overall slowdown in various sectors, Cooper Corporation has witnessed consistent and robust growth for the past five years across sectors because of our reputation for technology, after market support and commitment to quality and service. We have recently expanded our range of engines from the current 10 kVA - 200 KVA to 250 KVA. The entire range will be available in both Diesel and CNG versions. Also on the anvil are several exciting offerings in both ends of our present engine spectrum.” At Cooper we always emphasize on farsighted vision to understand future requirements and invest aptly in technology up-gradation well in advance. As a company, we believe in progressive, global technologies that ensure business success for us and all our partners.” Mr. Cooper concluded. ||www.constructionmirror.com/net||

Company: News

SANY India Hands Over SANY Piling Rig SR285 to J. Kumar Infraprojects for Mumbai MetroPproject

SANY India, a leading manufacturer of construction, heavy machinery and renewable equipment, today handed over a SANY SR285 Piling Rig to J. Kumar Infraprojects to be used for the prestigious Mumbai Metro project. Mr. Deepak Garg, CEO - SANY India handed over the piling rig to Mr. Nalin Gupta, Director, J. Kumar Infraprojects and Mr. Dharmendra Tiwari, Piling Unit Head, J. Kumar Infraprojects near Samata Nagar Bus Stop Malad East. The Piling Rig is designed to deliver excellent results and offers a maximum pile depth

of 94m and maximum pile diameter of 2500mm. Speaking at the handover, Mr. Deepak Garg, CEO – SANY India said, “I would first like to thank Mr. Nalin Gupta for giving SANY India this opportunity and hope we offer our full range of products and services to J Kumar Infraprojects in the near future. To ensure and guarantee the performance of our SANY Piling Rig SR285, we have a very strong service team based in Mumbai especially for the Mumbai Metro project with specialists for Piling Rig. Any parts that may be required will be available at any time and would be delivered within few hours from Pune. We have also stationed a service vehicle for this highway that will be here throughout the year to service the piling machine and other SANY equipment. I want to assure you that whatever is expected out of SANY, we try and surpass those” Mr. Nalin Gupta, Director, J Kumar Infraprojects, said, “I would like to praise the whole SANY India team. The

performance of the machine given to us on trial basis has been really good and we hope that this machine will also perform just as well.” The SANY India SR285 will be used for line 7 of the prestigious Mumbai Metro project near Malad east station.

Dubai Makes Way for Renewable Energy Crowdfunding • DP World and Dubai Carbon Collaborate to Facilitate Crowdfunding for Renewables Energy Projects DP World and Dubai Carbon Centre of Excellence (DCCE) signed an agreement to use crowdfunding, and innovative Fintech tool, to power the retrofitting of warehouses in Mina Rashid. The agreement was signed by Nabil Battal, Global HSE Director of DP World and Ivano Iannelli, CEO, Dubai Carbon on October 23rd at the19th edition of Water, Energy, Technology and Environment Exhibition (WETEX), which runs on October 23rd at Dubai International Convention and Exhibition Centre (DICEC). Using crowdfunding, UAE residents will be able to invest in a total of 3000 kilowatts of solar energy. In addition, investors will attain a return through the kilowatt hours generated from the project, at an estimated return rate of 40 per cent across a ten year 20

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period.Through Crowdfunding, the project aims to install high-efficiency and energy saving utilities in Mina Rashid. “DP World’s Solar Power Programme has far reaching environmental benefits and we are pleased that various stakeholders are contributing to its continued success including the Dubai Carbon Centre of Excellence (DCCE). We’ve provided four sheds on which to install solar panels and DCCE is taking the project to a crowdfunding platform, allowing a range of investors to finance an important development towards positive economic and societal change. At DP World, our approach is forward-thinking and long term – we are investing in technology, people and partnerships to lead the future of world trade,” said Nabil Battal,

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Global HSE Director of DP World Global. “The Crowdfunding project is the first-of-its-kind initiative in the region, which represent an increasingly important source of financing for the renewable sector. At Dubai Carbon we remain committed to achieving the goals of Dubai Clean Energy Strategy 2050. While the project will offer UAE residents a platform to invest in renewable energy, it will also go a long way in addressing gaps and bridgingthe energy divide,” said Ivano Iannelli, CEO, Dubai Carbon. The crowdfunding project is one of several initiatives undertaken by Dubai Carbon to encourage the development of innovative green finance, which is in turn part of a wider effort to diversify the economy away from reliance on oil revenues. ||www.constructionmirror.com/net||

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CONSTRUCTION MIR ROR

Company: News

Shriram Automall Inks Tie-Up With State Bank of India for its Sme Segment Key Highlights

• Shriram Automall ties up with State Bank of India, SME vertical with a Pan India Agreement • Complete solutions for the disposal of pre-owned commercial vehicles, construction equipment, three wheelers and two wheelers. • Disposal through all bidding platforms • Transparent and hassle-free transactions

People from left to right - Mr. Surendra Rana, SBI DGM & Mr. Sudeep Banarjee, National Head Business Development Shriram Automall India Limited (SAMIL), India’s No.1 platform for exchange of pre-owned vehicles and equipment, has joined hands with State Bank of India. With this tie-up, the company marks a successful commencement of its association with the bank and extends the benefits of its holistic solutions for the disposal of all types of pre-owned vehicles and equipment. Under this alliance, Shriram Automall will cater to all the segments of the State Bank of India, including pre-owned commercial vehicles, construction equipment three wheelers and two wheelers. Sharing views over the tie-up, Mr. Sameer Malhotra (CEO, Shriram Automall India Limited) quoted: “This is a proud moment for all of us at Shriram Automall,

getting associated with State Bank of India; India’s leading bank is a proof that our professional services for acquisition & disposal of pre-owned vehicles & equipment have been accepted very well. We are happy as well as confident that this tie up will incur benefits for both of us”. “With this association we are eyeing to get the maximum benefit through Shriram Automall’s expertise in the pre-owned automobile space. We are confident of generating good revenues from our inventory through their effective resale platforms” said Mr. Surendra Rana, SBI DGM The agreement was signed at the SBI, Corporate

centre, Madam Cama Road, SBI Bhuvan, Nariman Point, Mumbai stating that SAMIL will strategically dedicate its multiple bidding platforms, including Physical Bidding, Online Bidding, OneStop Classified Kiosk and Private Treaty, towards the disposal of the institutions all types of pre-owned vehicles and equipment. State Bank of India will gain utmost benefit as the service provider will certify the market value of every vehicle and help completely in the decision-making process. Moreover, the 24*7 parking facility will ensure safety of vehicles and refurbishment will increase their market value.

Shipping Ministry Offers Grant to JNPT, Karwar Port The Ministry of Shipping today said it has sanctioned Rs 25 crore to the Jawaharlal Nehru Port Trust for development of coastal berth and another Rs 50 crore to the Karwar port in Karnataka under the flagship Sagarmala project. “The Ministry of Shipping has sanctioned Rs 25 crore as grants-in-aid to the Jawaharlal Nehru Port Trust and another Rs 50 crore to the Government of Karnataka for the Karwar port for developing their infrastructure under the Coastal Berth Scheme of its flagship programme Sagarmala,” the shipping ministry said in a statement.

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The Coastal Berth Scheme aims to provide financial assistance to ports or states in order to create infrastructure for movement of cargo and passengers either by sea or national waterways. The permissible financial support from the Centre is 50 per cent of the total cost of the project subject to a maximum of Rs 25 crore for projects relating to construction and upgradation of coastal berths by major and non-major ports and a maximum of Rs 10 crore for construction of platforms and jetties for hovercraft and seaplanes by ports and state governments and passenger jetties in National Waterways and islands by states, among others.

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The other conditions involve a maximum of Rs 15 crore for mechanisation of berths by major and non-major ports, a maximum of Rs 50 crore for capital dredging of operational non-major ports and a maximum of Rs 50 crore in order to construct breakwater for existing and greenfield ports. The Karwar port project, which involves extension of the existing southern breakwater by 145 metres and construction of a new north breakwater of 1,160 metres, is likely to be completed in three years, it said, adding that the estimated cost of the project is Rs 215 crore.

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CONSTRUCTION MIR ROR

Backhoe Loaders Demand Outlook Remains Grim in the Short Term

Cover Story

Backhoe loaders will remain the most popular type of equipment sold in the country for some time to come, though already a change in the structure of demand can be seen. Its sales have been growing rapidly since 1998. While it will continue to remain the most popular equipment type amongst plant hirers and small contractors on account of its versatility, mobility, it is expected to be increasingly replaced by more efficient, productive, specialized construction machines, such as crawler excavators and wheeled loaders, particularly on large infra projects

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Section Sponsor:

ector Overview

A new report from Persistence Market Research (PMR) says global backhoe loaders market to grow to USD 4 bn by 2026. Top 8 manufacturers account for 85% of the worldwide revenue of USD 2.14 bn backhoe loaders market in 2015. The leading player is JC Bamford Excavators Ltd (JCB) with 20% market share. CNH Industrial NV, and Volvo Construction Group occupy the 2nd, 3rd place in market share resp. These top 3 manufacturers collectively account for nearly 44% revenue share of the global backhoe loaders market. Next 5 leading players in terms of revenue share are Komatsu Ltd., Hitachi Construction Machinery Co., Ltd., Terex Corporation, Caterpillar Inc., Deere & Company. Asia Pacific market excluding Japan is the largest market in terms of volume, value worth US$ 866.6 mn in 2015, and is projected to exceed USD 1 bn in revenues by 2018. India continues to be the world’s largest market for backhoe loaders. Indian market is growing at 6.9% which is higher than the 5.9% global CAGR through 2026. On the back of strong demand from the US construction sector, North America will maintain its position as the world’s 2nd largest market, followed by Latin America. Center-mount backhoe loaders will continue to outsell side-shift variants. The center-mount backhoe loaders are projected to have over 86% revenue share of the market till 2026. Backhoe loaders are the most commonly used construction equipment (CE) with application ranging from construction & mining, utility, agri & forestry. Construction and mining remain the largest end-use sector, accounting for

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nearly 53% revenue share of the market in 2016.

Brief history of Diggers in India

There was a time when the domestic req’s of CE were entirely met by imports in India. However, this trend was put to an end by Bharat Earth Movers Ltd. in 1964 with the beginning of domestic production of earthmoving equipment in India. In pvt sector, the Hindustan Motors Earthmoving Equipment Division was established in 1969 at Thiruvallur near Chennai. This factory was later taken over by Caterpillar in 2001 for their Indian optns. A new production facility in the same region inaugurated in April, 2012 is now used by CAT for Backhoe loader production. JCB launched the 1st backhoe loader in India in 1981 through its then JV with Escorts but was taken over by JCB Ltd. (UK) in 2003 and is now called JCB India Ltd. with its stronghold located at Ballabhgarh, Haryana. Similarly, CASE India operates a production facility in Pithampur, MP which was started in 1989 when CASE had a technological JV with L&T. It made complete acquisition of the ownership of the JV last year. Similarly, Terex Corp started manufacturing backhoe loaders in 2004 at Greater Noida. Thus, owing to the rapidly developing infra of the nation, most of the global pioneers of equipment tech are today present in India as JV CoS, or have set up their own manufacturing facilities or marketing firms. 3 major recent entrants in the market are M&M, Escorts and Leyland Deere (Ashok Leyland and John Deere). Other manufacturers of backhoe loaders in India include Case Holland, Telcon, Bull India, Liugong.

Enduring Demand

Projection of the Indian economy to grow at more than 7% during the 12th plan period and $ 1 trillion ambitious investment plans of the govt, seem to make the Indian CE market in general and backhoe loaders market in particular, lucrative. India is the largest Backhoe Market in the world and Backhoe loaders contribute approximately 50% of the total EM sector here. With record sales exceeding 33,000 units in 2011, production forecast for 2013 is placed around 43000 units with an astounding CAGR of 40%. The market is thus witnessing entry of new players whereas the existing manufacturers are ramping up their production capacities. In an era when equip. manufacturers are designing machines to do as many jobs as possible or trying to follow the ‘Swissarmy-knife’ approach, the design of the backhoe-loader has long stood as a model. The machine is at once a dedicated trenching unit, as well as a frontend-loading tool. It’s true, of course, that a comparably sized hydraulic excavator may ‘outtrench’ a backhoe and that a wheel loader may ‘out-load’ it; but no other machine combines these 2 basic earthmoving functions as efficiently as a backhoe-loader, while offering excellent maneuverability and ease of transport. And, everything considered, the backhoe-loader is also one of the most affordable earthmovers around. The existing and new entrants in backhoe loaders manufacturing in India are thus rethinking product offering strategies to suit the emerging demand order. Also, the govt is now picking up again on awarding new infra projects and clearing the

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Cover Story stuck-up processes in order to put proposed green field power projects on fast track, and to meet the emerging urban and rural infra demands from remote areas, tier-I & II cities, which will assure manufacturers that the demand for the versatile equip. will remain quite firm and wide.

Technological Developments

The CE sector in India has evolved over the years and is at present in an intermediate stage of development. The industry is trying to bring in international levels of technology as demand and the scale of operation increases. The users are now not looking at only the initial cost of the equipment, but focusing on total costing, or cost per ton of usage. Demand in value is a natural phenomenon in any maturing market, which needs to be addressed by manufacturers through their products backed by necessary improvements in production line, allowing both sides to reap, honest benefits on their investment. One of the major factors that add to the versatility of a backhoe loader is the development in number of applications it can work in with the help of attachments. Buckets at both the loader end and backhoe end can be replaced with a host of attachments like pallet forks, rock breaker, jib crane, sweeper collector, auger, six-in-one clam shovel bucket, ripper tooth, jaw bucket, ditch cleaning bucket, taper ditching bucket, bucket mounted fork lift etc. Hence, a construction and earthmoving machine can be used in several other applications like solid waste mgt and material handling. However, the percentage of sales budgeted for R&D is meager ranging from 0.5-3% of sales. Although many of the manufacturers have established full-fledged R&D units to update their products or technologies, the industry in India does not invest adequately in R&D activities compared to world leaders like Volvo or Komatsu, as the existing market cannot absorb the development costs. However, we may see more R&D work by world majors in India, taking advantage of low R&D manpower costs.

A Bright Future

Construction in India is fast approaching international standards. Profile of Indian demand is characterized by cost consciousness more than value consciousness. Contractors want sophisticated equipments at Indian prices and they want to use them roughly. There is also higher awareness about the utility of this machine in rural markets and more farmers-cum-entrepreneurs are starting to own them. Backhoe loaders will remain the most popular type of equipment sold in the country for some time to come, though already a change in the structure of demand can be seen. Its sales have been growing rapidly since 1998. While it will continue to remain the most popular equipment type amongst plant hirers and small contractors on account of its versatility, mobility, it is expected to be increasingly replaced by more efficient, productive, specialized 26

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construction machines, such as crawler excavators and wheeled loaders, particularly on large infra projects. Hence, future growth rate of the backhoe loader industry may decline; then again, it may well see increasing applications in rural areas which will sustain its strong market presence. Entry of new players is well likely to expand the market. Proper product positioning will help the new entrants create a stand in this highly competitive industry. However, viewed from the long-term prospective, existing brands with wide market base will continue to connect their names with product support, an initiative which they will now be making stronger than before for higher brand recall.

Flat Growth

Backhoe loaders are passing through a challenging time for the past few years. Market is registering a flat growth with some indications that it is shrinking. However, now there is optimism among the leading players in the backhoe industry on the back of the govt initiatives on infra projects. But how far this will help this segment to regain its glory is difficult to predict. Backhoe loader has led the sales in CE industry in India, for the past several decades. As an extremely versatile product, it has proved its importance and utility over the years. It is usually the first machine to enter a site at the start of the project and remains engaged with a variety of activities throughout its life cycle. Over the years the contribution of the backhoe to Indian infra development is immense. But the recent industry slowdown has severely affected this segment. Manufacturers are contemplating new strategies to recover. Major players in the backhoe loader market predict a flat market this year with annual sales in the range of 18,000-21,000 units. The market in this segment is highly competitive with all the big players fighting with the leader. This sentiment is reflected in the recently announced downsizing of staff and officers by some of the manufacturers to enable them sustain their operations by cutting costs. The industry has been going through a challenging time over the past 3-4 years. Typically, sale of backhoe loaders includes, 50% captive users, 20% hirers, another 20% mine owners, 10% institutions like municipal corpâ&#x20AC;&#x2122;s. During the current calendar year, the annual addition is expected to be 18-19,000 units which in next 5 years time would be around 25,000 units per annum. Challenge lies in financing of the equipment as most of the customers are first-time buyers otherwise users. It is also expected that the backhoe loader market to be around 30,000 units in 2017-18. Over this base, we expect the market to grow by 4-5% in FY 17-18, after which the growth rate is expected to surge to up to 7-8% once the Indian infra growth story engulfs most part of the country. At the same time, for the above to happen, we need peace, law and order (no mindless agitations),

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quick passage of imp business legislation like land acquisition, GST, and improvement in ease of doing business, not amongst businesses but simplification in doing business with the govt which essentially including permits, clearances, taxation reforms through IT enablement of govt services, tenders, payments of dues/bills etc. The current scenario of backhoe loader industry is challenging with relatively no growth. In fact, as per our estimates, this industry has de-grown by almost 4% YTD over last year. But it is optimistic that the backhoe loader segment has a potential to bounce back. With focus of govt on infra dev and with the recent Make in India initiatives taking form, we feel that the backhoe loader industry will bounce back to new highs from its current low phase. At the current rate the industry size for backhoe loaders in FYâ&#x20AC;&#x2122;17 would be just above 25,000. The market demand is model-specific. Customers go for models which provide cost-effective solution and are high in terms of quality and performance which are technologically reliable. > 90% of backhoe loaders are sold with 76 hp engine, 1 cu m loader and 0.24 cu m backhoe bucket. This is an established combination with huge population. From its peak in 2011 at about 33,500 units, the loader backhoe market has shrunk in line with the overall industry size since then to reach around 22,500 units. While the decline in volume has been witnessed in 2015 as well, the rate of decline is flattening and a revival is expected in the industry from 2017 onwards.

Growth prospects & challenges

On an average about 24,000 new backhoes are being added every year. This makes it the largest selling CE product category. Globally, backhoe is a utility machine, however, in India, it is positioned as a productive machine, which has to turn out profits and payback the cash used to fund it. This product category will continue to thrive for a long time as it accurately represents the great Indian entrepreneur, who is very actively engaged in the process of nation building. We feel that there will always be a strong demand for backhoes, in the Indian market, mainly due to the variety of tasks and applications that the product can accomplish. As new projects get announced, the demand is also expected to rise and in the coming years a minimum of 10% growth may be expected. Backhoe loader market is maturing and a 7-8% annual growth is expected in the next 5 years. It is a support machine, not a mass production machine, so growth is feeble. The key challenges in its growth path are the availability of funding options, innovative financing products for buyers wanting to own and operate their first backhoe loader. Rationalizing of on-road prices across different states in India will also give a fillip to demand as taxes and taxes over taxes make this product unviable in certain states. Presently ||www.constructionmirror.com/net||

Section Sponsor:

GST regime is helping this product category grow at 200-400 bps.

Growth Channels

Distribution network and aftermarket channels remain critical part in construction equipment industry. When it comes to distribution network, business viability still remains important aspect. Area coverage, responsive sales operations, maintaining cash cycles and inventory turns are key challenges in controlling channel inventory and costs. To remain responsive to customers, speed and accuracy of information makes all difference. The same is applicable for aftermarket channel, that needs to be service centric and for this they need to be proactive in tracking and maintaining assets on the ground. A well-coordinated and integrated IT enabled system is the only solution for better distribution network and aftermarket channel. There is always a need to be close to customers, and due to the unique nature of this industry sustained expansion of the distribution channel is important aspect of reaching out to customers. The geographical spread of the product is pan India including very far off places and the customer expectation on the uptime of the machine is very high. This asks for quick response and low turnaround time. We at Escorts have almost doubled our sales and service outlets in the last 15 months to meet the expectations of the customer.

Pro ducts & Technologies

Considering the current market scenario, there doesn´t seem to be major changes in the products in

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the near future. The 2W & 4W variant with 2 different HP engines, different types of buckets and tyres is available with all the leading manufacturers. Digmax II was the first backhoe loader to offer Equipment Monitoring System (EMS) but others are catching up on this feature because of its benefits to the owner and service provider. Improvements would continue to be made for reducing fuel consumption and improving productivity but no earth-shaking changes would be made in backhoe loaders for a few more years. High altitude areas would always constitute of 4W drive market as would high gradient application areas like mines. The popularity of the model is application specific. A standard machine would therefore be the most sold machine with tyres standard/heavy duty being the two options chosen from. JCB today has the most comprehensive range of backhoes in the market. It has a total of 5 models to offer for its customers. These range from the Compact 2DX, the bestselling 3DX with the variants (3DX Xtra and the 3DX Super) and finally the larger 4DX. All these machines come with a variety of extra options to suit the requirements of customers. JCB machines are now fitted with Livelink technology and customers can get SMS alerts on their mobile phones or smart devices regarding service alerts, operations and security of their machines by using the Geo Fencing and Time fencing features. All this info is available to the customer in real time basis. Terex has recently achieved a historic milestone by rolling off its 10,000th backhoe loader from its assembly line at Greater Noida plant.

The Construction Equipment Division of Mahindra & Mahindra offers 3 variants Mahindra EarthMaster VX, Mahindra EarthMaster SX and Mahindra EarthMaster 4WD. The flagship Mahindra EarthMaster VX caters to the top end of the market with its superior features, while the EarthMaster SX caters to the entry level customers with its highly competitive price. For higher fuel efficiency, higher production and greater operator comfort, CASE has designed the new EX series of loader backhoes in 76, 86, and 96 hp in India. Its recently launched CASE EX Series loader backhoe CASE 770 EX, CASE 770 EX Magnum and CASE 851 EX are powered by S8000 Engine and deliver powerful performance and fast response time coupled with a 5% higher productivity and fuel savings of up to 13%. This makes S8000 the most fuel-efficient engine in the market, which translates into huge savings for discerning customers, claims the company. A noteworthy technological innovation in the Indian CE industry came in 2015 when JCB India as part of its emphasis on ‘One Global Quality’ launched an advanced telematics system called “JCB Livelink”. All of the company’s machines are fitted with this system which enables customers to remotely manage their machines. Mahindra’s EarthMaster backhoe loader is a new entry in the segment with huge prospects to grow. 2 variants of the EarthMaster are currently available which cater to different price points in the market; the Mahindra EarthMaster VX for the top end with superior features, and the EarthMaster LX which targets entry level customers. Winning features of the product

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Cover Story

include engine capacity and higher torque, not to mention a banana boom which dictates the machine’s maximum digging height, maximum dump height and fuel efficiency. With the market now set to boom it is easy to see why every backhoe player with a presence in India is making a case for their product. Construction equipment manufacturers are increasingly working towards reducing customer’s pain points by enhancing the backhoe’s productive performance, uptime, and the ease of operation and maintenance so that customers can singularly focus on business outcomes. The mission is no different with CASE India, another top tier player in the backhoe segment. Last year the company with manufacturing facilities in Pithampur, MP, introduced its new EX Series of backhoe loaders in 76/86/96 HP. The CASE 770 EX, CASE 770 EX Magnum and the CASE 851 EX are powered by the S8000 engine and deliver powerful performance and fast response time coupled with a 5% higher productivity and fuel savings of up to 13% which translate to an average customer savings of Rs 50,000 per year. LeeBoy, which produces a broad spectrum of equipment related to roads and general construction, offers two models of backhoe loaders 699 (99 hp) and 679 (80 hp). Powered by 100hp state-ofthe-art engines, the 699 comes with standard features which include a 4WD, side-shift, extended dipper, multi-purpose bucket and an air-conditioned cabin. With the govt’s development agenda being irreversible industry analysts see a thriving future for the backhoe. Backhoes can never diminish in importance in the overall scheme of national construction. The demand for their use already exists and will continue. That’s a perfect forward pitch for the backhoe. 28

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Safety features

Safety is of paramount imp in every kind of machines. Compared to other types of machines, backhoe loaders remain a safe and stable machine. The operator seat, position of the operating levers minimizes the operator fatigue in Digmax II. The high quality electric harness ensures that there are no electric circuit related hazards that could harm the operator. There are a host of other features that make the machine safe. Terex is committed to designing, manufacturing and selling safe products in compliance with the standards and regulations for markets in which they are sold and used. Certain safety and operator-friendly features of Terex range include: ergonomically designed cabin with tinted safety glass - wide glazed surface glass giving total visibility, larger and spacious cabin with enhanced interiors that provide safety during operations. Boom and swing lock facility is provided within cabin for operator to control the same while remaining in cabin, in-built loader arm locking strut that provides safety during road transport and idle position. ROPS cabin and operator’s visibility is some of the major safety and operator-friendly features in ACE backhoe loaders. The Mahindra EarthMaster series comes with various safety and operator-friendly features. The REMOTECARE feature takes freedom to the next level. It is an intelligent communication system that keeps the business owner or manager constantly informed about the machine through mobile phone based SMS updates. The machine also comes with futuristic styling, superior comfort and convenience. Mahindra EarthMaster VX offers specially designed joysticks that are not only easy to use but also minimize

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fatigue, thus allowing operators to work long hours. All JCB backhoes have re-enforcements in the cabin and have seat belts for operator safety. Tinted cab glasses with rear view mirrors provide for excellent all-round visibility. For operator comfort, JCB machines have the best-in-class cabin and also have the options for servo controls and air-conditioning. The EX series, features the largest cab in the industry and sets a new benchmark in comfort. The wide windows and narrow pillars provide excellent all-round visibility, with an unobstructed view to the attachments and to the bucket edge. The mechanical suspended seat with a cushioned high back is fully adjustable to provide the optimal driving position. The ergonomic layout of the controls further adds to the operator´s comfort and ease of operation. Improvements have also been introduced with new rocker illuminated switches to improve reliability and guarantee maximum switches visibility in dark conditions. The overall ROPS / FOPS structure of the cabin, provide unparalleled safety to the operators.

Rental market

Backhoes have a major presence in rental market. Deployment in excess of 12 hours a day/3,000 hour plus in a year justifies owning the machine. Utilisation below these levels would justify going the rental route. Corporates which have to execute big chunks of earth work and industries where loading re-handled material on a continuous basis is involved would find owning a backhoe loader highly economical. Short term and intermittent usage justifies deploying backhoe loaders on rental ||www.constructionmirror.com/net||

Section Sponsor: basis. Presently rental market of backhoe is in stress due to severe competition, population and dropping rental charges of backhoe loader. Approximately Rs 70,000 for 260 hrs. a month is the rent for backhoe. Backhoe market is undergoing a change in the buying pattern of its customer. No doubt, the rental market in India is witnessing positive upswing. Nowadays, when projects are time-bound delivery based and contractors work on more than one project at a time, they have to go in for a hiring/rental business model. Majorly, contractors face difficulty in investing huge amount and increasing their capital expenditure during the initial stage of the project, also the maintenance and operating cost of specialized equipment can be unpredictable. Therefore, hiring a machine becomes a better option. With supply of equipment far exceeding the demand in the market, the rental rates are very low. This has resulted in spurt of demand in the rental market. Rental machine also takes away the hassles of equipment management. For the above reasons, India would dominantly remain the rental market. The rental business lobby needs to reorganize, as they are very region-specific and scattered. The rental segment has a long way to go. We have serious rental players who are able to organize this business segment and have business models geared to provide greater value and ease in operation to its customers.

Customer focus

Service and Quality of Service are two critical aspects in the backhoe loader industry. Uptime of machines are critical as the livelihood of the backhoe loader customer is dependent on the same. Hence ability to provide service at the site in the shortest possible time are 2 critical aspects for a backhoe brand to succeed. Customer service will always provide the critical competitive advantage translating users into repeat customers. They not only buy product repeatedly, but also showcase their trust on company, on product and on service. Captive users and institutions like municipal corporations are major customers. First time buyers, first time users, small and mid-size contractors put together comprises 92% while plant hirers, corporates, govt bodies (almost in equal proportion) constitutes the balance 8%. It is difficult to categorize the market on the basis of the application as backhoe is used for all conceivable works in India. Customers range from first time buyers to large engineering conglomerates. However, the basic expectation of all customers still remains that of product quality, performance and value for money. Repeat customers are a testimony to quality and processes.

Emission compliance

Emission norms on construction and material handling equipment are going to get stringent. Govt regarding emission norms are subject to various factors like availability of cleaner fuel and various ||www.constructionmirror.com/net||

level advancement in engine design to meet the desired levels of particulates. No doubt, that these norms will take us towards a better environment, but on the other hand would need a lot of work to be done by all stake holders. Availability of cleaner fuel from oil CoS and investments for upgrading engine manufacturing facilities and tech’s by engine manufactures will remain a challenge for implementing new emission norms. Moreover, better filtration and fuel injection allows engines to perform well in off-highway applications. Implementing latest emission norms will increase cost. Implementation of BS IV engines would increase input cost.

Business drivers and Outlook There seems to be a new urgency for action in the equipment zone as witnessed by the slew of govt initiatives to reform procedures and policies around infra investment, which in turn has spurred the fast tracking of projects. There is a new emphasis on fast tracking ambitious infra development programs like Smart Cities, Swachh Bharat Abhiyaan, Clean Ganga, National Highway projects and rural road and irrigation schemes that will spur backhoe loader sales. The ongoing air of optimism also derives strength from a recent report by the London-based Off Highway Research. The consultant has assessed that the sales of backhoe loaders in India could jump from 21,192 units sold in 2015 to 28,000 machines by 2020, a growth rate of about 32%. Notwithstanding those predictions, no one expects the leap in sales to cross the high-water mark of the 33,595 machines sold in 2011, and the prevailing mood of ‘let’s wait and watch’ leads India’s construction equipment sector to toe a cautious line. Backhoe loaders account for close to 50% of all construction equipment sales in unit terms. At the current estimate there are nearly 200,000 backhoe loaders deployed across the country in various projects. Most of them in operation are manufactured in the country by the OEMs. Apart from domestic sales, manufacturers have also been eyeing exports with up to 2,171 units contributed last year. And with more required to join the equipment line-up, this should mean increased business for established players like JCB, Caterpillar, CASE India, Terex, Komatsu, LeeBoy, John Deere, not to mention the new challenger in the backhoe space; Mahindra, with its Earthmaster series. The backhoe is not just the most ubiquitous construction equipment in India due to its multiple applications and uses but one which is progressively evolving with every trade show. With a huge existing population of machines in the market and project demands still to pick up, demand outlook remains grim in the short term, at least. Backhoe loader market is shrinking. Customers

are opting for either wheel loaders or excavators instead of multipurpose machine. Moreover, a huge population of backhoe loaders is available in the market. Challenge would be to differentiate product from competitor. In the next few years, the size of the Indian CE industry, by volume, will begin to approach that of Europe. India along with China and Brazil, is poised to be one amongst three large and growing CE markets globally. This has led to various new players entering the industry. It is expected that the CE industry to become hyper competitive with constant pressure on existing players and new incumbents to continuously improve their value proposition and cut costs. The high margins that have traditionally been earned by market leaders will come down. The country is going through a turnaround phase of its infra dev, and backhoe loader is a machine which is known for its versatility always takes the center stage. After a 3-year lull, backhoe loaders are expected to see a pickup in business volumes. Across the Great Indian Dust Bowl, the market for the good old tractor-digger, aka the backhoe, has fast begun to gather pace. After a 2-year lull in the construction and infra sector which saw a slowdown in both scale and speed of project implementation, and a decline in construction equipment hire and purchase, Indian backhoe loader sales is slated to pick up momentum along with the green shoots of economic recovery. This found reflection overseas through a milestone achievement in Feb this year when global digger giant JC Bamford Excavators Ltd, to mark its 70th anniversary rolled out its limited batch of special Platinum Edition 3CX backhoe loaders from production lines at its world headquarters at Rochester, UK. Understandably JCB, which introduced its backhoe loaders in India 37 years ago its factory in Delhi NCR is now a global hub for production is expected to play a leadership role. The intent for a long innings ahead for the backhoe loader was set at Excon in Bengaluru last year when the company showcased its new “ecoXcellence” range. A market leader, JCB India offers a range of backhoe loaders with 5 variants designed for multiple applications. These range from the Compact 2DX, the bestselling 3DX with the variants; 3DX Xtra and the 3DX Super; and finally, the larger 4DX. All these machines come with a variety of attachments to suit the varied needs of customers. The govt’s renewed thrust in the infra segment has led to a considerable increase in the demand for backhoes which are the most widely used equipment in the country. JCB has been a major contributor to the Make in India cause through its products which carry with them cutting edge technology and versatility.

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INTERVIEW

Sachin Nijhawan Vice President and Business Head

Mahindra Construction Equipment.

Mahindra Construction Equipment is already present in SAARC nations as Nepal, Bhutan and Bangladesh. In fact, in Nepal we have over 10% market share. Also, we would soon look forward to expand our presence in other geographies of Africa, Asia and Middle East in near future. ||www.constructionmirror.com/net||

The present government has laid down ambitious plans to build the Indian infrastructure. Do you think the plans are achievable and what are the policy changes which are required to turn these plans into reality?

There is no doubt that India has an impending need of building the infrastructure to nurture its economic growth. I believe that through various measures undertaken for the growth of infrastructure and real estate in Union Budget 2016- 2017, the government has done its best to infuse confidence in the industry. Whilst intentions have been in place, execution would be the key going forward. Moreover, push for improvement in infrastructure including outlay for roads, railways and development of smaller airports to improve connectivity, increase in real estate activities, favourable land acquisition policies and fast clearance of pending projects are some of the other measures that can be further taken by the government to provide a boost to the economy of the country and turn these plans into reality.

Backhoe Loader is one of the most crowded and competitive segment. How has Mahindra been able to create a USP for itself?

At Mahindra, we believe in providing value to customers right from product development by utilizing the best technology. Mahindra EarthMaster is a truly personalized machine with new age digital cluster that helps the operator to identify and trouble shoot problems by reading messages and hearing warnings in 6 different languages. With best-in-class fuel efficiency, lower lubricant refilling requirement and extended service intervals, our machines provide saving to customer. Also, our customers are also entitled for 1 year unlimited hours of warranty. Moreover, Mahindra also has tie ups with various banks to allow customers to easily finance the machine at low down payment. With all these and much more, we have been able to create and provide unique proposition for our target audience.

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INTERVIEW

Q. How are you able to ensure a lower total

cost of ownership to the price sensitive Indian customer? Mahindra Construction Equipment has always strived for providing the best to its customers. It is for the same reason that we came up with the backhoe loaders after 4 years of research and over 20,000 hours of machine testing. This resulted in better technology and design enhancements enabling our equipment to lower lubricant refilling requirement with extended service intervals, thus reducing the overall maintenance cost and improving total cost of ownership. Moreover, our indigenously developed and proven Mahindra DITEC engine offers best-in-class fuel efficiency which implies saving of 10 per cent in standard evacuation cycle to the customer. We have also been able to identify segments which do not need standard features of backhoe and offer variant which is value for money them.

4.5* litres per hour as it has the proven Mahindra DITEC engine which has been tried and tested in our tractors and automobiles. With flat torque curve, it provides saving of 10 per cent in standard evacuation cycle. Further, with better technology and design enhancements, our equipment is able to sustain with extended service intervals, thus reducing the overall maintenance cost and improving fuel efficiency.

What are the various variants in the backhoe portfolio?

For decades Earth Moving contractors in India have had to make do with products of dated technology. Mahindra Construction Equipment offers the choice to breakfree from the limitations of old technology. Backed by the engineering capabilities, manufacturing strength, distribution reach and after sales service, the Mahindra EarthMaster is available in the market in 6 different variants namely VX, SX, SX MDi, SX 4WD, SX 4WD 6in1 bucket and LX.

With Government keen on giving a massive push to the Infrastructure sector, how do you see the growth pattern for the Q. Is Mahindra CE planning any more construction equipment sector in the near innovations and launches in the near future? Innovation is order of the day and we believe to provide the future? The Planning Commission estimates total infrastructure spending to be about 10 per cent of GDP during the 12th Five Year Plan (2012-17), up from 7.6 per cent during the previous plan (2007-12). Investment in infrastructure and road building sector with projects like Bharat Mala are the main growth drivers for the construction equipment industry. With these investments set to go up, demand for construction equipment is expected to rise and the equipment sales are estimated to expand at a CAGR of 6.2 per cent. Being recent entrant into the industry, we intend to capitalize on this growth by providing superior products that offer customer good profitability over the life cycle.

Q. What is the technology used to ensure low

fuel consumption for your backhoe loaders? Mahindra EarthMaster offers best-in-class fuel efficiency of 32

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products and services which help the industry to rise. In fact, when we entered the Construction Equipment industry with our backhoe loader - Mahindra EarthMaster, it had many first. We were the leader to provide telematics for remote care and joystick for ease of operation in the traditional backhoe loader segment. Continuous improvement drives us forward and we believe in providing solution which make real difference to our end customer. As a serious player in the construction equipment industry, you should expect to hear about our new innovations and products soon.

Do you export these machines to the other parts of the world? Which are the global markets you may look at in the near future? Being part of Mahindra group, we harness the synergy

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within the group to cater to global market needs. India being the flag bearer of the developing world, we have inherent understanding of the demands of other developing markets. We have a comprehensive plan to target selected geographies of the world which have synergy with us. Mahindra Construction Equipment is already present in SAARC nations as Nepal, Bhutan and Bangladesh. In fact, in Nepal we have over 10% market share. Also, we would soon look forward to expand our presence in other geographies of Africa, Asia and Middle East in near future.

Q. Your marketing strategy for RoadMaster product, because you are competing with global players in grader segmetn. You have entered this segment only now, but you have huge advantage of knowing the local market for a long time.

This is an innovative and a very disruptive product, it’s not a “Me Too” product so we don’t have to compete with any established players right now. As I said, existing graders can’t do jobs beyond express highways and national highways, and 95 per cent of road construction is happening on rural and municipal roads, hill roads, all secondary roads. It could be State highways in the hills, but they do not come in four lanes. We have been designing this product last couple of years, we went to understand the stated and unstated needs of consumers as part of our regular consumer insighting process, we realized there is no product to serve this set of construction companies. So we came up with a product which gave “Uncompromised Mechanized Solution” to grading work for these types of roads, which none of the current graders are able to serve. As I said, yes we are small, we are new, but we don’t have to compete as far as this product is concerned with anyone, because RoadMaster G75 is not a ‘me too’ product, it’s a unique product. And we are delighted to see the response, because for road contractors this is like ready solution to lot of their problems.

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INTERVIEW

Jasmeet Singh Head Corporate Communications and External Relations

JCB India Limited 34

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Q. After the recently launched initiatives

to push up the infrastructure is the road construction market finally coming into shape?

JCB India organises product demonstrations for customers at their sites which gives them an opportunity to see the machine in action. Similarly, the customer meets and operator meets are targeted towards giving them a detailed understanding about the new in-built features / technology and applications. ||www.constructionmirror.com/net||

Infrastructure sector is one of the core sectors of the Indian economy and thus, hold immense importance in the overall growth of the country. Government’s concerted efforts in the past three years through various policy reforms, programmes and budget announcements have played a key role in the revival of the Infrastructure sector and the Earthmoving & Construction Equipment (ECE) sector. This growth currently is primarily driven by the Roads and Highways Sector closely followed by key sectors such as Railways, Irrigation, Mining, Affordable Housing etc. There is a requirement for building a world class road network in India, both in the urban and rural parts of the country. Significant allocation in successive budgets coupled with Government’s focused approach towards the sector has led to the considerable growth in the sector. Moreover, construction of 83,667 kilometresof

highways under the Bharatmala project and recpatilisation of banks through record capital infusion of Rs 2.11 lakh crore over two years will give a boost to the economy.

How important is export as a component of business for JCB?

Exports are an important part of JCB India’s business and till date, we have exported to over 85 countries across the globe including developed marked. Middle East and Africa are the biggest export markets for us, followed by South East Asia and Latin America. JCB machines are manufactured on One Global Quality i.e. products that are manufactured in India are at par with the rest of the world. These machines have gained significant popularity around the world and are now regarded as productive, efficient and reliable with technologically advanced features. Approximately, 20% of JCB India’s revenues come from exports.

Q. Please brief us on the value addition onafter sales support.

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CONSTRUCTION MIR ROR

INTERVIEW

Product support plays a crucial role in the overall buying cycle of an Earthmoving and Construction Equipment. At JCB, over the years, we have set-up the largest product support network in the industry with 63 dealers and 650 outlets. These outlets are spread across India, employing over 6,000 trained professionals to cater to different customer requirements. JCB also introduced an advanced telematics technology called Livelink which allows the user to remotely manage their machines. We have initiated various customer connect programmes and Service Campaigns wherein our trained service engineers visit the customer site across India and offer Service and Parts support. In addition to the above, our service vans provide services and product support for machines on site. JCB also recently introduced the Premier Lines Solutions for its range of products. This facility includes the options of having trained service engineers along with Parts stock on site.

Q. What provisions has JCB undertaken for

educating the customers? Is there any special customer training program organised by JCB?

Customer is at the heart of all our initiatives and as a manufacturer, it is imperative to ensure that they are 36

CONSTRUCTION MIR ROR

fully informed about the operations and maintenance of any new product. At JCB, we have initiated various customer connect programmes – such as demonstration of the machine at the customer site, customer meets, operator meets etc. JCB India organises product demonstrations for customers at their sites which gives them an opportunity to see the machine in action. Similarly, the customer meets and operator meets are targeted towards giving them a detailed understanding about the new in-built features / technology and applications. They are also educated about machine care to minimize unforeseen breakdowns.

Q. Please brief us on the IoT role in JCB’s day to day operations?

JCB also introduced an advanced telematics technology called Livelink which allows the user to remotely manage their machines. Internet of Things (IOT) is going be the next game changer in the manufacturing industry and JCB has pioneered the integration IOT within its earthmoving and construction equipment range. Today, over 40,000 Livelink enabled machines are successfully working in India. We innovated and introduced “Livelink” which is an

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advanced machine monitoring system that not only gives users the location of their equipment at all times, but also relays back all machine related information which can be accessed by customers, dealers and JCB. The Livelink strives to deliver constructive, real-time information to increase profits and improve productivity. Both, the equipment owners and operators can access information such as fuel consumption, ideal time, machine location, fluid levels and service alerts on their mobile devices or laptops using the internet. Our objective is to ensure that the machine is always healthy and gives the highest level of performance. The JCB Livelink system helps in informing users by SMS alerts, the location and condition of their JCB machines. Geo fencing and Time fencing features also give out SMS alerts whenever the machine moves out of the designated, pre-determined geographical areas. This feature also works when the machine is being operated beyond the time that the customer has preset. Livelink has significantly helped in better fleet management of JCB products for our customers. It has also resulted in our product support network being able to provide world class support through preventive maintenance.

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CONSTRUCTION MIR ROR

Focus: Mining and Construction Equipment

Mining and Construction Equipment Sector Revenues on an Uptrend

CONSTRUCTION MIR ROR

|| NOVEMBER 2017 ||

||www.constructionmirror.com/net||

Section Sponsor:

nfra Sector Overview

Infra sector is a key driver for the Indian economy. The sector is highly responsible for propelling India’s overall development and enjoys intense focus from Govt for initiating policies that would ensure time-bound creation of world class infra in the country. Infra sector includes power, bridges, dams, roads and urban infra development. In 2016, India jumped 19 places in World Bank’s Logistics Performance Index (LPI) 2016, to rank 35th amongst 160 countries. FDI received in Construction Development sector (townships, housing, built up infra and construction development projects) from Apr’00-Mar’17 stood at US$ 24.3 bn, according to the DIPP. Cumulative FDI inflows in the Construction Activities sector, which includes infra, reached US$ 10.26 bn between Apr’00-Jun’17. Cumulative FDI inflows in the Construction Development sector, which includes townships, built-up infra and construction development projects, reached US$ 24.54 bn between Apr’00-Jun’17. UAE-based firm, DP World, having previously invested US$ 1 bn in India, is planning to invest another US$ 1 bn in India’s infra sector along with logistics and container terminals. Squared Capital, a global infra investment company, plans to raise up to US$ 4 bn through its second infra fund, which will be invested in infra assets in India and across the globe.

Roadways: Value of total roads and bridges infra in India is estimated to have expanded at a CAGR of 13.6% over FY’09-17 to US$ 19.2 bn. In Apr’17, the National Highways and Infra Development Corp. bagged a project to build 5 tunnels worth US$ 3.42 bn. These tunnels, namely, Zojila tunnel at Zojila Pass (14 kms), Vailoo Tunnel at Sinthan Pass (8-10 kms), Z-Morah tunnel (6.5 kms), Pir-KiGali Tunnel on National Highway-244 (8.5 kms) and Daranga Tunnel at Shudh Mahadev (4.5 kms), will help in avoiding road accidents because of avalanches. The Bharatmala project with an expected cost of Rs 10 trillion (US$ ||www.constructionmirror.com/net||

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CONSTRUCTION MIR ROR

Focus: Mining and Construction Equipment 155.14 bn) is expected to be launched soon. Around 51,000 km of roads is expected to be developed as expressways under the programme. In January 2017, the govt proposed to lay down cycle tracks on all highways and major roads pan India, to promote the use of electric cars, public transport. Highway network in the country is expected to cover 50,0000 km by 2019. NHAI has created a new highway operations division to focus on all non-commercial highway operational activities like electronic toll collection, road safety, incident mgt, and other modern amenities.

is expected to be fulfilled by private players. Till Dec’13, 217.5 mn tonnes of capacity per annum in our ports have been created to give a big boost to infra industries. The capacity of ports in India by the end of the 12th FYP is targeted to touch 2,493.10 MIPA as against 1,245.30 MTPA at the end of the 11th FYP. Growth in infra related activities: Infra related activities witnessed strong growth between Apr-Sep’16. Activities that registered the highest growth include export cargo (10%), highway construction/ widening (9.8%), power generation (6.6%), import cargo (5.8%) and cargo at major ports (5.3%).

Index of 8 core infra industries: The 8 core infra industries include coal, crude oil, natural gas, refinery products, fertilizers, steel, cement and electricity. The overall index grew by 4.8% during FY 2016-17. The growth in the index was led by electricity (10%), steel (9%), refinery products (8.9%), cement (5.8%) and fertilizers (3.3%). Cumulative growth of the index b/w Apr-Jul’17 was 2.5%. The growth in the index was led by steel (6.2%), electricity (4.9%), natural gas (4.3%), refinery products (1.8%) and crude oil (0.2%). Railways: Revenue growth has been strong over the years; during FY07–17, revenues increased at a CAGR of 11% to US$ 24.60 bn in FY17. Revenues from the sector are estimated to reach to US$ 44.5 bn by the end of FY20. Indian Railway sector aims to boost passenger amenities. In Mar’17, Railways started a new segment of revenue generation channel through auctioning for advertising, branding contracts on 1000 trains. The front running brands are to sign this contract for 5 years.

Power: Installed capacity increased steadily over the years, posting a CAGR of 10.57% in FY09–17 and stood at 326.84 GW. As of Jun’17, energy generation from conventional sources stood at 307.7 Bus.

CONSTRUCTION MIR ROR

Infra projects completed during the 12th FYP Sector

Airports: There are a total of 454 airports in India, out of which around 90 are open for commercial services and 16 are designated as international airports. Delhi and Mumbai are by far the busiest airports in India, carrying almost 2.5 times traffic as the next busiest airport. The growth so achieved has put tremendous pressure on current airport infra in the country. GoI has projected that an investment of around US$ 12 bn in the next FYP will be needed to help cope with additional demand, and private sector participation is expected to play a key role. 75% of the investment envisaged in the next FYP is expected to be contributed by private sector. Ports: For ports, the 12th FYP budgets investment worth Rs.1,98,000 crores, of which around 85%

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Projects

Cumulative Exp ($)

Road, Transport, Highways

8.7 billion

Power

16.63 billion

Petroleum

19.48 billion

Railways

3.81 billion

Steel

8.13 billion

Shipping and Ports

1.78 billion

Telecommunications

463.62 million

Coal

2.26 billion

Fertilisers

596.24 million

Civil Aviation

861.16 million

Urban Development

678.83 million

Atomic Energy

168.93 million

CE revenues on an uptrend

By FY20, construction equipment (CE) industry’s revenue is estimated to reach to US$ 5 bn. Revenues increased at a CAGR of 8.38% during FY07-14 and is further estimated to rise at a CAGR of 2.34% between FY’07-20, owed to the rapid infra development, undertaken by the GoI. In ||www.constructionmirror.com/net||

Section Sponsor:

FY’16, India’s CE industry grew at a YoY of around 3.45% over the previous year. Sale of construction equipment in India is estimated to grow at a CAGR of 6.18%. in volume terms, and reach to 96,700 units by FY18 from 50,000 in FY07. With sale of 76,000 unit’s construction equipment’s, the industry has witnessed growth at a CAGR of 4.76% during FY07-16. During Jan-May’16, construction equipment industry of India recorded sales of 21,869 units of construction equipment, representing a growth of 47.6% over the same period previous year.

between SREI Infra and BNP Paribas. This is expected to drive sales of equipment’s in future. With easy availability of financial schemes and increasing use of construction equipment, the scope of construction equipment rental industry is growing in India. There is demand for equipment’s for niche applications. The manufacturers have also started giving end to end solutions to cater to this demand.

Equipment Financing and Renting in India

Based on estimated revenues of 2015, earth moving holds the largest share in the construction equipment industry (62.1%) By 2016, backhoe loaders and crawlers are estimated to reach 70% of the total construction equipment; crawler excavators is anticipated to grow from 23% in 2015 to 35% in 2016 Crawler excavators is expected to be the fastest growing segment by 2018, mainly on demand for mid-sized crawlers (20T) from the construction segment and their versatile usage. Backhoe loaders and crawler’s excavators are expected to account for over 68.23% of total sales by 2018 Others consists of Asphalt Finishers, Crawler Dozers, Mini Excavators, Rigid Dump Trucks, etc.

Notable trends

Chinese equipment manufacturers have a strong presence in some segments such as wheel loaders, dozers, due to which imports from China increased in FY’16. Chinese equipment tends to be price competitive, thereby putting downward pressure on prices of domestic equipment manufacturers. The private sector’s share has expanded across key infra segments, ranging from roads and communications to power and airports. Of the total planned infra investments worth USD1 trillion during the 12th FYP, the share of private sector is estimated to be 47%. up from 25% during the 10th FYP. The share of crawler excavators is est. to increase to 35% in 2016 from 23% in 2015, mainly on demand for mid-sized crawlers (20 tonnes) from the construction segment. Demand for larger excavators (30 tonnes) used in the mining segment is also expected to increase in the years to come. Several Indian firms are entering into tie-ups for equipment rental & leasing business, e.g., tie-up ||www.constructionmirror.com/net||

As with any product that requires a large one-time capital expense, financing is a good way for the construction equipment industry to spark demand and acquire new customers. India’s earthmoving and construction equipment (ECE) financing industry was valued at Rs. 23,000 Cr. Financing accounts for about 80% of the equipment purchased. For imported machinery, it’s even higher, with 90% of equipment purchased being financed. Over the next few years, the ECE financing industry is expected to grow by a compound annual growth rate of about 22%. Most financing is through loans, with leasing as a distant second option. About 80% of ECE users that opt to finance are MSME’s. With ticket sizes varying from Rs.20 lakh for a backhoe loader purchased by an individual user to Rs.20 Cr for a construction firm’s bulk equipment purchase, the variety of players offering equipment financing has grown. NBFCs handle 75-80% of ECE financing. Penetration of financial intermediaries in the market is high over 80% of all CE bought in India are financed. Main buyers of non-financed equipment include govt and PSUs. The market is dominated by first time buyers with 60% of the market share indicates a broad-based market with easy access to financing. First time buyers and Mid segment (small retail buyers) together constitute the retail segment of the market which accounts for a large market. Construction CoS are under a lot of pressure to trim capital outlay and hence they increasingly rent equipment on a monthly or hourly basis, or where possible, on the amount of material handled. Again, the current rental penetration in India at around 7 to 8% remains low as compared to the global standards of 50 to 80%. Leasing/rental of CE is still a very fragmented industry in India, but is expected to show strong growth, possibly higher than 30% annually over the mid- term. Several OEMs have already constituted dedicated teams for the rental/leasing services. A robust rental market enables reduction in investments in projects by outsourcing the equipment requirement (including spares, services) and improving capacity utilisation of equipment. The key equipment in the rental fleet in India currently are backhoe loaders, pick-n-carry cranes, excavators, motor graders, and vibratory compactors. The equipment rental and leasing business in India is smaller compared to Japan, USA, China. Demand for rental equipment is set to

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CONSTRUCTION MIR ROR

Focus: Mining and Construction Equipment witness strong growth in the mid-term due to large investments in infra. New players can also explore opportunities in the equipment finance business. The limited presence of large organized players is restricting the growth of rental financing. Given the industry’s narrow focus today and the tremendous opportunities for growth, better access to financing will help broaden the market.

Key Challenges for Infra and CE Industry

Land acquisition delays: Across infra projects, delays as a result of land not being acquired by the time projects are awarded have affected many projects both before and after they start. For example, land clearance issues held up the Trivandrum-Tamil Nadu border road project, though the tender was awarded in 2010. Country-wide regulations on land acquisition have been enforced in a non-uniform fashion, causing delays. Even lenders are unwilling to support projects unless clearances are available and 100% right of way has been secured. Clearance delays: Delays related to forest and environment clearance are also impacting many infra projects. Clearance policies are often not used objectively, providing different rationale for clearances on different occasions. Not only does this impact the speed of clearances, it also sends uncertain signals to investors and often leads to pullback of investments. For example, the contractor for the KishangarhUdaipur-Ahmedabad six-lane highway has terminated the project because environmental clearance failed to materialize. Similarly, lack of clearance from the state water department held up the Chennai Port-Maduravoyal road project. Financing: OEMs in India offer limited financing options, and payment terms for first-time users are often unfavorable. The result is that access to financing prevents many prospective users from buying. Renting is a good option for users with an eye on limiting their large capital expenditures. However, renting penetration in India is much lower (7-8%) than in other large ECE markets (65% in the US and 35% in China) because of a tax regime that makes moving equipment across states unviable. India’s secondary market for used equipment is underdeveloped. Recovery is a big challenge for non-bank finance companies, the major providers of ECE financing for whom regulations pertaining to defaulters and bad debts are not very favorable. Unavailability of Skilled Manpower: As the ECE industry rapidly grows, the need for trained operators and mechanics will increase proportionately. Availability of skilled workers is likely to be an issue. Multiple entities from the govt, ECE companies and industry bodies are working to solve the skill gap issue, but coordination among these agencies can be improved.

CONSTRUCTION MIR ROR

Most CE users are small players who prefer on-the-job training for operators and mechanics and are unwilling to pay a premium for qualified workers. Specialized courses on construction equipment operations are not a part of vocational training at industrial training institutes because the high cost of equipment makes hands-on training expensive. ECE training institutes run by OEMs tend to be expensive for low-income groups. There is a lack of uniform national guidelines for safety, quality. On-theground enforcement is a challenge because of the fragmented nature of the industry. (Small contractors make up about 3/4th of the industry.) Components: There is a high variability in OEM demand owing to market fluctuations, which makes capacity planning difficult for component providers. India is a market where component suppliers tend to focus on items at the lower end of the technology spectrum, while relying on imports for high-tech items. Consequently, there is a gap in terms of technology adoption at the supplier end, where the market demand for higher connectivity and compliance to fuel economy regulations is not met with indigenously manufactured components. Suppliers are also constrained for operating margins because the market is very price and value conscious.

The Road Ahead

India is poised to be world’s 3rd largest construction market by 2025. All signs point to a country that would be wise to focus on developing its infra. And when it does, demand for ECE will surge. Growth in a country’s fleet-size ECE stock is highly correlated to the growth of the construction industry (a proxy for infra growth), with a high correlation coefficient (>0.99). In the near future in India, the bulk of construction growth is likely to come from growth in transportation infra (roads, rail, airports, ports), urban infra (mass rail transit systems, water supply and sanitation, urban housing) and rural infra (rural roads, irrigation, rural housing), 3 imp sectors for driving ECE demand. With sig. infra investment and growth expected in India, it is expected that ECE stock will exhibit robust growth in near future. The ECE market is expected to grow by a healthy 20 to 25% over the next few years to reach 3,30,000 to 4,50,000 units sold in 2020, from current levels of about 76,000 units. This would imply a $16-21 bn market, up from today’s $3 bn. The sector will continue to be dominated by backhoe loaders (>40% of total demand), but broad-based growth is expected across products, with each segment expected to see doubledigit growth. A rise in the use of concrete will also create demand for concrete equipment in infra and

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housing projects.

Mining, Construction equipment to witness growth

With the demand for mining and

construction e q u i p m e n t (MCE) continues to grow mainly due to the increase in infra spends, the sector is likely to grow by 13-17% during 2017, says ICRA. According to the rating agency, the demand for MCE grew by over 35% during CY’16, overcoming 4 consecutive years of weak demand, giving a boost to the sector which is likely to grow by 13-17% in 2017. It, however, noted that the industry growth this year has been somewhat curtailed despite strong growth during Jan-Feb’17 as the markets were temporarily hit by emission related ambiguity and GST during April & July 2017, respectively. It further expects the sector’s growth to lower in 2018 with it growing by 8-10%. For 2019, ICRA said that industry growth may slow down to around 4% due to Union elections and high base effects. Infra investments in roads, irrigation, railways and metro drove demand whereas coal and iron ore mining, power, oil & gas and real estate tampered demand. The improvement in average per day execution of NHAI projects to 10.33 km in fourth quarter of financial year 2017 despite demonetization and investments by Indian Railways helped in the growth in demand for MCE. The sector outlook is improving given the 20% plus growth witnessed in the construction equipment industry during Q1CY2017 mainly due to higher infra spend, particularly in roads, raised equipment utilisation and subsequently demand for new equipment which led to a sharp reduction in the delinquency data for CE financiers, noted ICRA. On the flip side focus on renewable energy and high coal inventory impacted equipment demand both in power plants and mines, the outlook on the same continues to be negative. Though iron ore production has grown at a healthy rate during FY’2017, demand from the domestic steel industry has remained subdued. This is expected to keep demand from the iron ore mining segment muted in CY’2017. Demand from the real estate segment, however, continues to be weak, ICRA noted.

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India: Sales and Forecast of construction Equipment, 2013-2018 (Units)

Articulated Dump Trucks

2013

2014

%Change 2013-2014

2018

% Change 2014-2018

Asphalt Finishrs

705

750

1,100

+47

Backhoe Loaders

27,748

30,000

38,000

+27

Compaction Equipment

2,536

2,700

4,500

+67

Crawler Dozers Crawler Excavators Crawler Loaders

335

350

700

+100

10,352

11,500

+11

28,000

+143

+400

+100

Mini Excavators

449

550

+22

1,200

+118

Mobile Compressors

4,867

5,000

7,000

+40

Mobile Cranes

5814

6,500

+12

10,000

+54

Motor Graders

276

300

750

+150

Rigid Dump Trucks

555

550

-1

850

+55

RTLTs

+25

100

+233

Skid-Steer Loaders

582

600

1,000

Wheeled Loaders

1,685

1,800

3,500

+94

Total Construction Equipment

55,946

60,655

96,730

+59

-15

+10

Annual % Change

Although the Indian economy has shown lower than expected growth in the last two financial years, the situation is predicted to improve in the future. Major challenges for the construction equipment market did arise from delays in policy decisions, which are often set aside as the govt struggles with a wide number of social and political issues on a daily basis. Major non-financial constraints include problems related to land acquisition, and procedural and approval delays, especially for environment and forest clearances. The govt has been slow in reforming its regulatory and administrative structure, and this has resulted in the on-going gap between the planning and execution of all infra projects. The continual allegations of corruption charges being faced by several political leaders, and the incoherence within the ruling coalition on development issues, hampered decision making at every level in the govt. Other challenges mainly come from the widening current account and fiscal deficits, though the govt in its interim budget presented in Feb’14 did try to address these issues. RBI is pursuing its high interest rate regime that was put in place to tame inflation during 2010-2012, but the new govt, expected to be in place by the end of May 2014, may have a second look at this policy. Some infra projects were cleared recently on an adhoc basis, but it is expected that after the general election, scheduled during Apr-May’14, the situation may turn favorable for infra growth. In the long-term, it is understood that the govt’s obligation to bridge the massive infra deficit in the country will outweigh all other unfavorable factors, hence despite this prevailing uncertainty, most construction equipment suppliers are optimistic about the future growth. Off-Highway Research is bullish about the future growth of the construction equipment industry in view of the high potential that exists in the country. The simple truth is that there is a massive amount of work to be done in every sector, and this will call for large volumes of equipment to complete it. How large those volumes will be totally dependent on govt’s effectiveness in facilitating project execution and addressing the key impediments highlighted above. The market for construction equipment is forecast to grow by around eight% in 2014 and witness a higher 10-14% expansion during 2015-2018. The demand is expected to grow to 60,655 units in 2014, and reach 96,730 units by 2018. Almost all types of equipment will witness growth, though the market will continue to be dominated by the six most popular products: backhoe loaders, crawler excavators, mobile cranes, ||www.constructionmirror.com/net||

mobile compressors, compaction equipment and wheeled loaders. Together these will account for 94% of the market in 2018. Importantly, demand for equipment that has sold only in small numbers in the past, such as mini excavators, rough terrain lift trucks and skid-steer loaders, may also increase considerably. The demand for less frequently purchased equipment such as articulated dump trucks, crawler loaders and wheeled excavators will be driven by specific orders and no future pattern can be predicted for them with any degree of certainty at this point in time. Given the govt’s increased focus and an ambitious road building target, the global CE players are taking keen interest in the Indian road construction industry. The IRF World Road meeting, which is taking place this year in India bears testimony to the growth of this sector in the country. A sustainable, appropriate technology-based micro-enterprise with the capability to maintain rural, farm to market roads and transform them into reliable, all weather roads using unskilled labor with no heavy equipment, is one of the underlying principles for focus on roads by developing nations. The next step is to lay the black or asphalt top on these roads. Wealth creation can only occur if these people are engaged in producing some fundamental need of society. Improving the lives of the India’s poorest people would improve the lives of people everywhere by creating new markets and economic opportunities. Wealth and livelihood are created by ideas, products, services, facilities and org’s which support the human beings’ ability to create, produce and deliver products, goods and services. Consider the wealth creation impacts of democracy, electricity, farming, automobiles, assembly line factories, mines and other natural resource industries, rail, roads and transportation infra, banks, accounting and legal firms to name a few. All these ideas, products, services, etc. presume the existence of reliable, all weather roads for personal access. Road transport ministry had set an astounding and all-time high target of building 15,000 km of roads in 2016-17 but could only managed 8,200 km of roads. This construction figure, however, is the highest that the ministry has achieved till date and more than double of what the previous UPA govt managed. Between 2009 & 2014, on an average 6-9 km of roads were built per day. Gadkari had also set a target of awarding 25,000-km length under highway projects in 2016-17 as compared to 10,000 km last fiscal. Ministry managed to award around 14,000 km by March 31. Though the target was missed, yet the figures hit an all-time high. Delay in land acquisition and tepid response from private developers came in the way of the ministry meeting its target. But the Centre according priority to roads helped in achieving an all-time high construction and award figures. From our industry perspective, all the major global players of Road Construction machinery are present in India and with their full arsenal. Today, the focus on road construction in India is like never before. No surprise that Traffic solution consultants, road safety equipment & service providers and knowledge disseminating agencies in road sector are making their presence felt as this is the logical next. The fact that International Road Federation is organizing the World Road meeting in India this year, bears testimony to road sector in India. As for the statistics/data, the Q1 of the current fiscal saw about 1048 units of Vibratory Compactors sold which was 44% higher than the sales for same period the previous year. This growth was recorded despite demonetization. However, Q2 may see a fall as compared to the above basis due to Very high sales in Jun’17 to avoid GST from Jul’17; Non- registration with retail hirers in particular; Lack of clarity on GST (multiple location registration etc.) and preparedness (on line claim of ITC). This will take some time to sink in and get the small-time hirers to get ready. Not to forget the very high rate of 28% of GST which has increased the asset value and thereby the requirement of initial payment (down payment) from the hirers. The impact is going to be temporary and the mark is expected to go up from Q3 and make up for the drop in Q2 by the end of H2. H2 could see a sale of 2000-2200 units plus. A total of 4000 units for the year 2017-18 look possible. This is based on the works awarded/in the pipeline. || NOVEMBER 2017 ||

CONSTRUCTION MIR ROR

Company Profile Debasis Bhattacharya

Head-Sales, Marketing & Product Support

Ajax Fiori Engineering (I) Pvt. Ltd.

CONSTRUCTION MIR ROR

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Ajax Fiori believes in Total Customer Satisfaction and all our strategies are prioritised keeping customers in mind. After sales support is a major differentiator in this business and no one understands better than Ajax Fiori.

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. Ajax Fiori (India) Pvt Limited is among leading concreting machinery manufacturers. Incorporated as a collaborative venture between Ajax Engineering, India & Fiori S.p.A Italy in 1992, we have over 25 years of strong experience in manufacturing, distributing and supporting Ajax Fiori branded concreting equipment solutions. . We are committed to providing customers with concreting equipment that make economic, investment, and productivity sense. In a nutshell, solutions that ‘Make Concrete Sense.’ We have over 10000 pants & machinery working on various Infrastructure projects in the country and we are happy to be a part of Building the Nation. Our range of innovative products, including Self Loading Concrete Mixers, Batching Plants and Concrete Pumps, designed to help our customers produce and deliver quality concrete, whenever the demand, wherever the need arises, and whatever the volume required. Our versatile user friendly machines help customers improve productivity, while increasing profits along the way. We were the pioneers in bring the technology of Self Loading Concrete mixer (SLCM) in India which revolutionised the way of Concreting for small & medium requirement of concrete for all Infrastructure projects in its early days. This machine is merger of Loader, Mobile Batching Plant and Transit Mixer for small to medium volume concrete requirements. These machines are equipped with a Concrete Batch Controller to obtain the required quality of concrete by allowing the Operator to calibrate the quantity of aggregates into the mixer as per mix design. These all-wheel drive machines are also available with crab steering hence are highly maneuverable. These machines can be deployed in any kind of terrain. The SLCMs are available in 3 models viz. Argo1000 with 1 cu.m drum having an output capacity up to 3 cu.m/hr , Argo 2000 with 2 cu.m drum having an

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output capacity up to 8 cu.m/hr and Argo 4000 with 4 cu.m drum with a output capacity up to 12 cu.m/hr.. They are also available in variants as tunnel dumpers and transit mixers. Ajax Fiori has also established itself in the Batching plant arena, offering its customers in various technologies & capacities yet compact in design, apart from the dominance in Self Loading Mobile Concrete Mixer. The Compact Reduced Bin Batching Plant with planetary mixer – capacity of 30 cu.m/hr is the latest addition to our Product Portfolio. The USP of Reduced Compact Batching Plant are that they are supplied standard with planetary mixers and customized PLC based control system. More so, these planetary mixers are manufactured in-house under strict quality control procedures, in technical collaboration with Eurostar, Italy. World over, the planetary mixers have replaced the turbo mixers for most applications, owing to its capability of producing high quality concrete of different types. The key benefits of planetary mixers over conventional turbo mixers are: • The planetary mixer mixing tools rotate in a synchronized manner and are able to turn the material distributing all of the material uniformly in the pan without favouring the different nature of the materials creating a homogeneous mix; each revolution changes the flow pattern. • The intensity of the mixing action, appropriate speeds combined with design of the mixing tools provide a complete homogenisation and an efficient flow pattern. • The pan of the planetary mixer is completely empty thus allowing the material to cover the complete area in a minimum time.

• Planetary mixers have a single type of mixing tool with a geometry that together with a combination of movements distributes evenly the material. The Cmpact Reduced Bin Batching Plant (CRB) of 30 cu.m/hr. capacity was designed to fulfil the need of its Customer in the RMC & Infrastructure segments. In today’s competitive world Capital & Operational cost plays a vital role in the success of the business. • The CRB 30 eliminates the need of the belt conveyor for handling aggregates and there by reduces the capital cost by 30% compared to other similar plants available in the market. • Aggregate weighing system is independent of skip transfer system, thereby reducing the cycle time & increases productivity • The entire plant can be transported in a single trailer and thereby reducing transportation cost compared to other plants • Plug and Play electrical system, thereby fast erection at site • Compact Layout, hence minimal space required • Minimal Concrete foundation required for erection • Skid foundation also available as optional which eliminates the need of a foundation Ajax Fiori believes in Total Customer Satisfaction and all our strategies are prioritised keeping customers in mind. After sales support is a major differentiator in this business and no one understands better than Ajax Fiori. Our Sales, Parts & Service Network is spread across the country with 25+ Dealers & 60+ touch points for the customers and backed with 2 Service centres currently in Bangalore & Hyderabad.

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INTERVIEW

Nischal Mehrotra Director Sales & Service

LiuGong India Pvt. Ltd. 46

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venture is producing track mounted mobile

Been associated with LiuGong from 2008 spearheading SBD department which comprises sales, service and all other major activities related to brand LiuGong PAN India Basis. If we talk about LiuGong in a global scenario, we have 20 manufacturing plant & 9 subsidiary worldwide. Among this 20 manufacturing facilities 16 are the domestic facilities in china and rest are in India, Brazil, Poland and Argentina respectively. We are into joint venture with Cummins and ZF who are the pioneer for manufacturing engines and transmission respectively. Liugong manufacturing facilities for Cummins produce more than 20000 units of engine globally. We are a true MNC having our global presence in more than 130 countries. The most recent venture was with METSO the giant in crusher business. Liugong Metso joint

journey on 2008 promoting make in India idea long back even before its been into the big picture. We establish our manufacturing plant at Pithampur MP with a production capacity of around 2000+ wheel loader per annum. We created the best in the class of machine with featuring high productivity, low fuel consumption, high reliability, ease in operation without compromising on the safety features. One of our main motto is to understand the customer business and make them profitable. Customization as per the situation demand makes us the most competitive player in the market in recent times. We Started with manufacturing of 5 T and 3T wheel loader in 2008 and gradually entered into other segment of construction equipment like motor grader in 2012 and our most recent been the full range of excavator and compactors. The voice of customer itself

Brief us about your role in crusher and screening plant for the domestic LiuGong and the success story of market. LiuGong? We as Liugong India started our glorious

hen we talk about LiuGong, we are originally from China, so somewhere customers have big perception in thier mind that the products are made in china. It took almost 7 to 8 years to change that perception in the mind of customers that we believe in made in India and make in India only. ||www.constructionmirror.com/net||

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INTERVIEW

speaks for us as we are having more than 4000+ units operating successfully throughout India. LiuGong been the trend setter in 5T wheel loader, we are the market leader in this segment. Recently we had come up with our new generation of H series Wheel loader keeping an eye on the recent market trend and demand of the customer. Every year we are growing in folds as the after sales service supports of LiuGong and its channel partners prove themselves in the market to be one of the most reliable and efficient one gaining the trust of the customer. We are having 54 touch points throughout India providing 3S facilities to all the customers. Nepal, Bhutan, Srilanka & Bangladesh are been a part of Indian subcontinent work along with Liugong India. We even do supply of equipments to Middle East and African countries. We work as per the Automobile pollution norms supporting the CSR value of the company and the country as a whole for protecting our environment by saving energy, less emission of carbon in the atmosphere and maximizing the value created for customer.

India is ready to take the charge by supplying high quality and improved products and play the vital role in creating india as one of the country having excellent infrastructure. We are ready with the full capacity of our production unit to supply the product to the customers along with the efficient and excellent service support to guarantee them uptime as a result project can be completed within the firm deadline set by Indian government. Next 5 to 6 yrs expected to be the one of the golden era for India CE Industry reciprocating positively with the plans of Indian government. New product launched by LiuGong i.e. 611 Compactors and full range of excavators along with H Series Wheel Loaders supporting the existing product line of Motor grader proves to be at a right time when government is eyeing for 41 km a day ambitious target for connecting the length and breadth of the country. Proving technologically advanced machine with guaranteed quality output makes LiuGong walk in hand to hand with the basis motto of Indian government and building the nation together.

Q. How can LiuGong define its products to How LiuGong is going hand to hand be best in the market? with the governmentâ&#x20AC;&#x2122;s infrastructure plans? LiuGong been a foremost name in the construction Q.

LiuGong India is in sync with Indian government policies are it regarding implementation of GST or promoting make in India movement or regarding the massive infrastructure development plan. As I had mentioned previously we were the first Chinese construction equipment manufacturer to put up our plant in India in the year 2008. Creating employment and generating revenue in Indian soil through FDI and working in line with the government policies for last 10 yrs. The policies, plans and new projects announced by Indian Government seem to be extremely encouraging for the CE industry as a whole. Be it the Bharatmala Project or Golden Triangle project there will be a sure increase of demand in the market for equipments and along with all the other manufacturer Liugong 48

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equipment manufacturing industry globally we are pledged to manufacture world class equipment which makes out customer profitable and giving out desirable and high quality output. We are proud to be what we are and providing improved quality product not only in India but globally satisfying all the customer need and market demand. Our multimillion dollar state of the art RND facility in Liuzhou China roll out new development which makes our machines more cost effective and advance in compare to our competitors. Indian market and condition require special attention and the demand pattern is far more different than what we generally face globally. Thatâ&#x20AC;&#x2122;s the foremost reason we had started Liugong India one of the

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most successful subsidiary in LiuGong global group to support that cause. The machines that had been rolling out of the Indian plant are well tested in Indian condition for a prolong period of time and prove them self to be most suited for Indian condition. The component that had been used in the equipment are of world class be it engine , transmission axle or components like cylinders and control valve all are from renowned manufacturers like Cummins, ZF or Kawasaki. We had already invested 300 cr in out plant in India keeping an eye on the future prospective. We the new launch of products in compaction segment and excavator segment we are even having bigger plan for going ahead with multimillion dollar expansion in 2018-19 fiscal year. Producing Equipment which is Value for money without sacrificing on the quality and safety are the guiding parameters for LiuGong equipment. Customer satisfaction, innovation, advance technology, Assuring future by quality are the 4 corner stone of LiuGong. Our product are as competitive with the other OEM products with excellent component life but relatively more cost efficient than the other counterparts. We Liugong we master the art of producing world class equipment and services as a more cost effective rate which in turn helps our customer by bringing the total investment to be done on capital equipment but getting the desired result and assured quality in time and within deadline.

Q. What are your preparations for Excon 2017?

In EXCON 17 we are going to launch our made in India excavators and compactors, from last 7 years we were focusing more on Motor Graders and Wheel Loaders. Now we are coming up with 2 new products because we basically eyeing on the road projects where we cater our customer and offer them our full range of construction equipments. ||www.constructionmirror.com/net||

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G uest Article

ndian construction equipment segment is the most volatile segment of the automotive industry. Due to investment in the infrastructure, construction and mining sector the construction equipment segment has become one of the fastest growing segments. With the increasing demand for the construction equipment Shriram Automall India Limited (SAMIL) has become the largest solution provider for both public and private enterprises as demand of construction equipment is highly lead by the enterprises investing in areas like road construction, and maintenance, ports, power plants, telecommunication sector, urban infrastructural development etc.

organized and transparent manner. For construction equipment segment, companyâ&#x20AC;&#x2122;s innovatively advance platforms work the best for both acquisition & disposal. SAMIL is like a new breed venture in the country that very successfully bridges the gap between buyer and seller by bringing them together under one roof and letting them choose from the best in class range of pre-owned construction equipment. Today, the road to construction equipment market involves demand of 52,000 machines per year and this demand is currently growing by 5% to 7% In spite of having many players in the market who are dealing in the same segment, Shriram Automall India Limited has become the largest player and first choice of the market through its huge inventory and presence in every nook and corner of the country..

Also, Being the OneStop Solution for all types of used vehicles & equipment requirements in India, SAMIL provides a common platform to Owners, Dealers, Individual, and Corporates to transact in the most 50

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Company manages to reduce the equipment budget by providing good quality used equipment at optimal price to its customers in a structured regulatory way while paving the way for them to clear the challenges they face which lead to delay in their projects i.e. non availability of the needed equipment or delay in delivery of the construction equipment. SAMIL provides them the insight to make the complete process both easy and accessible through its most innovatively efficient online and physical bidding platforms. Indiaâ&#x20AC;&#x2122;s infrastructure industry has the highest and biggest potential for growth providing investment opportunities and with more players entering the industry we can see the growth of construction equipment segment even further. As the ratio between the sale of new & pre-owned equipment is 1:1, Shriram Automall understands the demand and requirements of its customers, thereby gains a leading edge for implementing the most unique line up of used commercial vehicles with dedicated team for the segment.

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LARGEST PLAYER IN PRE-OWNED CONSTRUCTION EQUIPMENT TRANSACTIONS SAMIL with an eye for 100% customer satisfaction has come a long way while emerging as the No.1 and Largest Platform for Acquisition & Disposal of Used Vehicles and Equipment in the country. Till date the company has sold over 25,000 used equipment through effective physical bidding platform across the country. SAMIL has effectively paved its way into the market and customers have accepted the new concept that company brought whole heartedly. As a result since 2011, SAMIL has garnered over 5,80,000 transactions from 42,000+ bidding events through 70 well structured Automalls across the country, acquiring over 6,80,000 unique bidders. Yet the market for this segment is quite unorganized and underdeveloped due to lower number of organized players in the market. In a long run with upcoming big government projects which focuses on the infrastructure development in the country SAMIL is taking every step to make this unorganized segment to emerge as the semi-organized one and then over a period of time as the completely organized. By FY20, Indian construction equipment industry’s revenue is estimated to reach to US $5 billion. Revenues has increased at a CAGR of 8.38 % during FY07- 14 and are further estimated to grow at a CAGR of 2.34 % between FY07-20 due to rapid infrastructure development, undertaken by the Government of India. Sale of construction equipment in India is estimated to grow at a CAGR of 6.18 %, in terms of volume, and reach to 96,700 units by FY18. From the above estimated data, pre-owned industry is also expected to grow at the robust speed as pre-owned construction equipment are now highly preferred by people all over the country, their most important

advantage being they are light on pockets. After all heavy equipment is the area where technology advances at a blinding pace, and its affordable to acquire used one than acquiring the new one and replacing it over the period of time.

Thereby now company has become a very critical part of the used construction ecosystem and is dealt as of utmost importance in the major industry. SAMIL provides all kind of used equipment like Excavator, Dumper, Truck, Forklift, Crane, Backhoe and Loader etc. Company has always striven to serve both equipment buyers and sellers in the most comprehensive and convenient way possible. With the substantial experience and large inventory filled with enormous pre-owned construction equipment to choose from, company has evolved in a profound manner in area of buying and selling pre-owned construction equipment meanwhile creating the long lasting relations with its customers and clients. The Indian construction equipment sector is made up of five main segments: earthmoving equipment, road construction equipment, concrete equipment, material handling equipment, and material

processing equipment. Earthmoving equipment and road construction equipment account for close to 70% of India’s construction equipment market. Backhoe loaders account for 65% of the earthmoving equipment and road construction segment. As outlined in the next Five Year Plan (FYP), Infrastructure is one of the plan’s primary areas for spending, with about Rs 31 trillion (US$ 454.83 billion) earmarked for investment with 70 % of funds needed for power, roads and urban infrastructure segments. Construction equipment sector of the country being the earthmoving industry, has already clocked a growth rate of over 40%, in the last six months. For constructing infrastructure that government is planning, huge investments in the equipment have been made resulting in demand hike of both used and new construction equipment.

Company with professional teams for all the 70 Automalls, across the country make sure to provide all kind of used equipment like Excavator, Dumper, Truck, Forklift, Crane, Backhoe and Loader etc. Company has always striven to serve both equipment buyers and sellers in the most comprehensive and convenient way possible.

SAMIL Understands That Successful Construction Depends on the Perfection of Tools and Equipment Employed! As in India heavy machinery and construction equipment segment has become the fastest growing segment and company make sure to meet the growing demand through easy to access huge Inventory providing wide range of used construction equipment to choose from. Company has helped many architects and construction business owners not only by providing them used construction equipment and vehicles through their online, physical bidding events but also by providing them easy finance for heavy machinery and services like one stop, private treaty, valuation, documentation, refurbishment etc. Company’s Private Treaty Platform was especially ||www.constructionmirror.com/net||

initiated to complete the bulk transactions. As through this platform, customers can do one-on-one deals to buy or sell their used vehicles & equipment. This platform enables them to directly make the transaction without having to participate in the bidding process with personalized approach and negotiated deals. Now, company has also made, bidding quite prominent amongst the masses through its technologically driven online bidding platforms. Out of multiple innovatively advance platforms, online bidding has made the exchange of used construction equipment extremely exciting as well as convenient. In a very short span of time company has grown to be quite huge through its hard work and commendable

services providing uncommon results and solutions to help the issue at hand.

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Focus: Road Infrastructure in India

Road Infrastructure in India: Trends and Outlook

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ector Overview

As of 15th May’17, there were 1,582 PPP projects in India, of which 783 were related to roads & bridges accounting for a value of USD74.63 bn. Project awarded under BOT is 7.15% of the total awarded projects as of May’17. Road construction projects awarded to BOT CoS recorded a CAGR of 1.23% during FY06-17. Both NHAI & MoRTH awarded projects of around 6,397 kms in FY’16. In 2015-16, 7 projects (20%) of the total 4,368 kms of NHAI projects awarded were allocated to BOT mode. During FY’17, projects of about 422 kms were awarded to BOT players by NHAI, in comparison to 873 kms in FY16. Transport infra sector in India is expected to grow at 6.1% in real terms in 2017 and grow at a CAGR of 5.9% through the year 2021, thereby becoming the fastest-expanding component of the country’s infra sector. Construction of highways reached 8,142 km during FY 2016-17, with an all-time high average pace of 22.3 km per day. In the first 2 months of FY’17-18, 1,627 km of highway was constructed at an average of 26.3 km per day. Under the PMGSY, 133 km roads per day in 2016-17 were constructed as against a 2011-14 average of 73-km per day.

20% of the investment of US$ 1 trillion reserved for infra during the 12th FYP to develop the country’s roads. India has the second largest road network in the world, spanning a total of 4.87 mn kms. Roads in India transport over 60% of all goods and 85% of total passenger traffic. The roads and bridge infra industry is expected to be worth US$ 19.2 bn by FY17. The National Highways account for 1.9% of the total road network in India and are expected to reach 100,000 kms by the end of the 2017 from 97,135 kms in FY15. GoI has formulated a 7-phase program, NHDP, vested with NHAI, for the development of National Highways in the country. The pvt sector has emerged as a key player in the dev. of road infra in India. Increased industrial activities, along with increasing no of 2-4 wheelers have supported the growth in the road transport infra projects. Govt’s policy to increase pvt sector participation has proved to be a boon for the infra industry with a large no of pvt players entering the business through the PPP model. With the Govt permitting 100% FDI in the road sector, several foreign CoS have formed partnerships with Indian players to capitalize on the sector’s growth. The NHAI has invited bids for the preparation of detailed project reports for 44 freight corridors, inter-corridors and feeder routes to reduce the cost and time of the freight movement across the country, under the Ministry of Roads Logistic Efficiency Enhancement Programme (LEEP). 3 MoUs were signed between National Green Highways Mission (NGHM) and ITC Ltd, Yes Bank Ltd and Teri for setting up a Centre for Innovations in Green Pathways in order to enhance research & innovations in the field.

highways and shipping infra in the country. The govt, through a series of initiatives, is working on policies to attract significant investor interest. The Indian govt plans to develop a total of 66,117 km of roads under different programs such as NHDP, SARDP-NE and Left-Wing Extremism (LWE). The govt has identified development of 2,000 km of coastal roads to improve the connectivity between ports and remote villages. NHAI plans to build 50,000 km of roads worth US$ 250 bn by 2022 as part of a long-term goal of doubling the length of the national highway network to 200,000 km.

Some of the recent developments

Introduction

India has the 2nd largest road network across the world at 4.7 mn km. This road network transports more than 60% of all goods in the country and 85% of total passenger traffic. Road transportation has gradually increased over the years with the improvement in connectivity between cities, towns and villages in the country. Indian roads carry almost 90% of the country’s passenger traffic and around 65% of its freight. Sales of automobiles and movement of freight by roads is growing at a rapid rate. To create an adequate road network to cater to the increased traffic and movement of goods, GoI has set earmarked ||www.constructionmirror.com/net||

The Union Minister of State for Road, Transport and Shipping has stated that the Govt aims to boost corporate investment in roads and shipping sector, along with introducing business-friendly strategies that will balance profitability with effective project execution. Some of the key investments and developments in the Indian roads sector are as follows: The NHIDCL has been awarded a contract to build 5 all-weather access tunnels worth Rs 23,000 Cr in J&K by 2024. Abertis Infraestructuras SA, a Spanish infra firm, has agreed to buy two toll road assets in operation in South India from Macquarie Group for Rs 1,000 Cr to scale up its presence in India. In the Union Budget 2017-18, the GoI has allotted Rs 64,000 Cr to NHAI for roads and highways and Rs 27,000 Cr for PMGSY. The CCEA, has approved the development of 19 kms long 4-laning from Pandoh Bypass end to Takoli section of NH-21 in HP, which is estimated to cost Rs 2,775.93 Cr. The Road Transport & Highways Ministry has invested around Rs 3.17 trillion, while the Shipping Ministry has invested around Rs 80,000 Cr in the past two and a half years for building world class

Advantage India

Robust Demand: Greater connectivity between different cities, towns and villages has led to increased road traffic over the years. Growth in automobiles and freight movement commands a better road network in India. Rise in the number of 2 & 4 wheelers, increasing traffic supports the growth. Attractive Opportunities: GoI has fast tracked at least 24 roads and highways projects. Govt is planning to offer a bonus of 10% of the total project cost to firms that construct & deliver highway projects before deadline. Higher Investments: Govt has given a massive push to infra by allocating US$ 61.8 bn for infra in the Union Budget 2017-18. GoI plans to approve almost 10000 kms of national highway in FY17. Growing participation of the private sector through PPP. Policy Support: Road

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Focus: Road Infrastructure in India infra has been key govt priority; sector received strong budgetary support over the years. FIs received govt approval to raise money through tax-free bonds. 100% FDI is allowed under automatic route subject to applicable laws, regulations.

highway projects, worth US$21.57 bn as a part of new innovative models of financing.

financing on vehicle loans. Road’s traffic share of the total traffic in India has grown from 13.8% to 65% in freight traffic and from 32% to 90% in passenger traffic over 1951-17.

Outlook

Value of total roads and bridges infra in India is expected to expand at a CAGR of 13.6% over FY09-17 to US$ 19.2 bn. In April 2017, the National Highways and Infra Development Corp. bagged a project to build 5 tunnels worth US$3.42 bn. These tunnels, namely, Zojila tunnel at Zojila Pass (14 kms), Vailoo Tunnel at Sinthan Pass (8-10 kms), Z-Morah tunnel (6.5 kms), Pir-KiGali Tunnel on National Highway-244 (8.5 kms) and Daranga Tunnel at Shudh Mahadev (4.5 kms), will help in avoiding road accidents because of avalanches. Increasing industrial activity, increasing number of 2 and 4 wheelers would support the growth in the road transport infra projects. In Jan’17, the govt proposed to lay down cycle tracks on all highways and major roads pan India, to promote the use of electric cars and public transport. In Apr’17, Chenani-Nashri tunnels that links Kashmir valley with Jammu was inaugurated. It is the longest road tunnel in the country and US$371.86 mn were invested in this project. Targeted pace of road construction has been increased to 23 km a day. National highways account for 1.9% of the total road network in India. Double-lane highways constitute the largest share of highways in India (40658 kms). Double-lane highways are followed by single/ intermediate lane (19330 kms) and 4/6/8-lane (19128 kms) highways. The Govt has proposed to upgrade 2 lane national highways into 4 lane national highways for which US$ 65 bn has been allocated. This step is expected to reduce the passenger car units (PCU) to 10000 per day. The Govt of India approved US$1.04 bn project for construction and upgrading 558 kms of roads to link the country with Bangladesh, Bhutan and Nepal. The project will ease the movement of passengers and cargo and increase inter-regional trade by 60%. Around 50% funding for the project would come from Asian Development Bank (ADB). In the state of Telangana, the total accumulated length of National Highways including those sanctioned after formation of the state and before bifurcation stands at 5,512-km as on Apr’17. In Jan17, Govt of Assam announced investment of US$2.23 bn for developing 1253 kms of roads in the state, into national highways. In response from institutional investors from Canada, Middle East and the US, in Feb’17 NHAI floated bids to monetize 10 national highway projects in the country. The NDA decided to bring all future road projects such as economic corridors and coastal roads under its aegis, with an aim to give a boost to its Bharatmala Plan. This flagship programme is estimated to cost around US$148.74 bn. The govt is planning to monetize 105 54

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Trends

Demand for urban transport: The govt’s policy to increase private sector participation has proved to be a boon for the infra industry with a large number of private players entering the business through the PPP model. The type of PPP models used in road projects are BOT toll and BOT annuity. During the next 5 years, investment through PPP is expected to be US$ 31 bn. Electronic toll collection: NHAI is taking revolutionary steps, like facilitating Online sale of FASTags and offline sale through Common Services Centre (CSC) near toll plazas, to ensure availability of FASTags for Electronic Toll Collection. International Investment: Infra is the key to supporting double-digit GDP growth in India during the medium to long term. Cumulative FDI inflows into the construction development sector, including roads and highways, stood at US$ 24.54 bn till Jun’17. Success of India’s Five-Year Plans: The total length of national highways is expected to reach 100,000 kms by the end of the12th FYP. In Sep’15, govt set a target of building national highways of 30 km per day. By Feb’17, govt constructed 6,604 kms of national highways. A total of 50,000 kms of state highways is to be taken up for up-gradation as National Highways. Infra initiatives: Programs like Bharat Nirman, JNNURM are designed to pursue nationwide rural connectivity, linking all the unconnected villages with fair weather roads.

Rising vehicular traffic: Sales of passenger vehicles increased at a CAGR of 10.24% during FY06-17 and reached 3.8 mn in FY17. Sales of commercial vehicles in the country increased at a CAGR of 5.21% in FY10-17, with the number reaching 810,286 during FY17. Rising per capita income and growing middle class coupled with easier access to finance and a wider price range of vehicles have boosted car sales. Production of passenger vehicles increased at a CAGR of 10.24% to reach 3.8 mn in FY17 from 1.3 mn in FY06. Production of commercial vehicles increased at a CAGR of 5.21% to reach 810,280 in FY17 from 567,000 in FY10.

Higher individual discretionary spending has led to increased spending on cars, motorbikes and scooters. Growing domestic trade flows have led to a rise in commercial vehicles and freight movement. Increasing

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Focus: Road Infrastructure in India

Private funding: Cumulative FDI inflows into the construction development sector, including roads and highways, has increased at a CAGR of 17.07% from US$ 8.06 bn in FY10 to US$ 24.29 bn till Mar17. Cumulative FDI stood at US$ 24.54 bn as on June 2017. A MoU has been approved by the Union Cabinet between India and the UAE on bilateral cooperation in road, transport and highways sector. The MoU includes collaboration in planning administration and management of road infra, technology and standards for roads/highways construction and maintenance. NHDP’s Phase I & II were mostly developed by public funds with BOT’s share at 14.8% & 29.6%, resp. The PPP model will be the favored route for executing the remaining phases of NHDP. In May’17, the Road Ministry signed 34 MoUs with investment potential of around US$ 29.74 bn with private and public CoS such Adani Logistics, Ascendas, Chennai Port Trust, etc., to improve multi-modal logistics. Policy initiatives: Infra investment is a major focus area for the govt. The govt has given a massive push

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to infra by allocating US$ 61.8 bn for infra in the Union Budget 2017-18. The planned outlay under the Union Budget 2017 -18 for development of road transport and highways is US$14.67bn. Moreover, as per Union Budget 2017-18, the govt has set targets to develop almost 2,000 kms of coastal connectivity roads. The PMGSY is a scheme for development of rural roads in India. Under the Union Budget 2017-18, Govt of India allocated an investment of US$ 4.21 bn for the PMGSY. CoS enjoy 100% tax exemption in road projects for 5 years and 30% relief over the next 5 years. CoS have been granted a capital of up to 40% of the total project cost to enhance viability. Infra finance CoS, such as IIFCL, NHAI, HUDCO, PFC and IRFC, have been permitted to issue tax-free bonds for a total value of US$ 3.27 bn for FY’15; promotion of infra debt funds is the top agenda. As a part of Union Budget 2016-17, bonds worth US$ 2.2 bn are being planned to be raised by NHAI. GoI has set up the IIFCL to provide long-term funding for infra projects. Interest payments on External Commercial Borrowings for infra are now subject to a lower withholding tax of 5% vis-a-vis 20% earlier. IDF income is exempt from income tax. The Central Road Fund (CRF) assists the state govt and UTs in the development of state roads. For FY’18, US$ 10.13 bn has been allocated specifically for the development for the national highways in the country. Existing excise duty on petrol and diesel has been changed to road cess to the extent of INR 4 per litre to fund investment in roads and other infra. Out of US$ 33 bn, allocated for the progress of infra, US$ 14.5 bn has been assigned for the construction sector, including construction of roads and highways in India, as per Union Budget 2016-17. In Union Budget 2017-18, the govt provided an outlay of US$ 14.67 bn for the road sector.

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Opportunities

NHDP is a 7-phase project amounting to US$ 60 bn, aims to widening, upgradation and rehabilitation of 47,054 kms of national highways. NHAI awarded 77 road projects covering 4,275 kms in FY17. In India, roads remain the most important means of transport, accounting for around 80% of the passenger traffic and 65% of the freight traffic. Number of total vehicles in India increased at a CAGR of 9% during the period of FY’06-17, from 9.7 mn to 25.3 mn. As of FY’17, 2-wheelers accounted for 78.73% of the total no of vehicles in India.

Road developers stand to gain as India’s spending on highways is expected to double to Rs 6.8 lakh Cr over the next 3 years on govt’s infra push, a report by Nomura said. Poor quality of roads and growing traffic would drive the demand for more highways, it said. National and state highways comprise less than 5% of the roads but account for 80% of traffic. Most of these are either single of double-laned, leaving room ||www.constructionmirror.com/net||

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Focus: Road Infrastructure in India for a “significant improvement in India’s highways network”, the report said.

NHAI managed to construct 8,100 kms of roads in the year ended March, a little over half the target. It’s still the highest ever and Nomura expects the construction to exceed 10,000 km in the near term, driven by the fact that work is in progress at 33,000 km of highways which were ordered in the past two years. Stalled projects revived through a recent round of reforms will add to growth. Nomura called the central govt’s estimate of Rs 5 lakh Cr investments in the three years ended Mar’20 as optimistic. It would be spending close to Rs 3.2 lakh Cr while nearly Rs 3.6 lakh Cr could come from various state govts, it said. After a stagnant phase between 2010-11 and 2014-15, growth has picked up in highway sector contracts. The opportunity is widely driven by states likes of Uttar Pradesh, Madhya Pradesh and Maharashtra, which will account for 60% of the entire states’ capex. A pipeline of state orders such as Purvanchal Expressway (Rs 26,000 Cr) in Uttar Pradesh, Mumbai-Nagpur Expressway (Rs 46,000 Cr) and several other projects in the south support the revenue streamline and growth in order books, Nomura said. The biggest concern for the infra CoS remains debt. The sector is among the biggest contributors to Indian banks’ stressed assets, which at Rs 10 lakh Cr are among the highest in the world. Developers have to get their finances sorted but they are getting there. There are some concerns among bankers to lend to infra projects but many CoS are in the process of securing financial closures. Restructuring of debt and the revived interest of pvt investment in PPP has helped orderbooks expand. Govt also eased rules for infra investment trusts to help infra CoS help raise funds. Road builder IRB Infra Developers Ltd. and Sterlite Power Grid Ventures Ltd. have already listed their InvITs. Their other peers have also sought approvals from the market regulator. Given the interest in InvITs, CoS have been trying to free some of their assets to

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raise capital. There is a positive outlook on the sector and CoS will be able to implement and execute even if there are temporary hiccups. Another pool of opportunity lies in metro rail corridor expansion in 15-20 cities. The overall cost of expansion of approved projects is over Rs 2.5 lakh Cr, supporting the order books of contractors, according to ICRA Ratings. The order book is expected to rise by Rs 75,00090,000 Cr over the next 3-5 years, thanks to metro rail expansion, it said. Roads and urban infra are two key segments which have witnessed robust order inflows for construction CoS. The central government is planning to extend the country’s existing national highway network of 115,000 km to 200,000 km. For this, the MoRTH has estimated a fund requirement of around Rs 7 trillion over the next five years. This requirement will be met through the MoRTH’s gross budgetary support, the Central Road Fund, toll remittance, the monetisation of national highways through the toll-operate-transfer model, external borrowings by the National Highways Authority of India (NHAI) and private sector investment. Further, the MoRTH has identified 208 level crossings on national highways for the construction of road overbridges (RoBs) under the Setu Bharatam scheme. So far, the feasibility studies for 87 RoB projects have been completed. The MoRTH has also approved the conversion of about 51,300 km of state roads to national highways, subject to the outcome of their detailed project reports.

Conclusion

When we talk about investment in infrastructure, let me digress from the issue of road development to the larger issue of what the government is really thinking on infrastructure development in the country. In terms of new models for encouraging PPPs, there are the hybrid annuity model (HAM) and the BOT toll model that we have experienced for the past few years with hiccups that were primarily due to issues concerning pre-construction clearances and activities.

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What we really try to look at is problems that were confronting us in practically every project on account of land acquisition, utility shifting, forest clearances and environmental clearances. To a great extent we have tried to get these issues out of the way. The other aspect that we have tried to look at is proactive policies for exiting from projects, rationalized compensation, one-time fund infusion, etc. When we look at infra and investment in infra, it is a game that two people have to play. On the one hand, the government must have the right policies whether for new projects or those that are languishing and it also has to take care of bottlenecks because of which we miss our milestones. On the other hand, from the private sector’s side, the way projects have been structured, and financed, has left quite a lot to be desired. As a recent development, the first phase of the ImphalMoreh connectivity project has been sanctioned. It is important to lay emphasis on such projects, as connectivity with our neighbours is one of the key elements of road development in the country. Together with this, we are looking at the proper integration of road and highway development with the Ministry of Shipping’s ambitious flagship Sagarmala programme. Today, we are in a situation of working very closely with state governments in terms of developing logistics parks in key areas which witness huge freight movement. We have identified seven major locations in Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Gujarat, Assam and Haryana where there are plans to develop multimodal logistics parks. The MoRTH has also started focusing in a big way on identifying areas which are suitable for the development of wayside amenities according to a well-designed model under the PPP model and undertake operations and maintenance thereafter. Although this may seem like a small area on the face of it, it is likely to have a huge impact all over the country with regard to enhancing the travel experience on Indian roads. Further, the MoRTH has been trying to get into great detail on the whole debate of concrete versus flexible pavements. We are planning to undertake a comprehensive study to understand what is going to be the best formula to adopt. One size fits all is not the right solution for anything in India and this is also true for all the models we develop and put into place. Hence, the ministry aims to develop the right mix of models. Given the large scale of projects that the MoRTH is executing, we recently tweaked our engineering, procurement and construction (EPC) guidelines to ensure greater involvement of contractors. The element of competition, greater price discovery, and changing the technical eligibility criteria are some aspects of the amended guidelines. The ministry is also encouraging innovative technologies in the areas of detailed project report preparation and road ||www.constructionmirror.com/net||

construction. To this end, mobilization advances are being provided. Meanwhile, the first round of bidding for toll-operate-transfer projects will be conducted in a month’s time. Ultimately, we are all working towards one common objective of connecting and transforming India through much better infrastructure development in the country. The past year has been a significant one for the road sector. The gradual shift from focusing only on project award to initiating measures for faster project turnaround was quite noticeable. The MoRTH has left hardly any stone unturned to facilitate active stakeholder participation. Project-related activity has been on the rise following the government’s push for innovative implementation models. Earlier reservations about the viability of the hybrid annuity model (HAM) have started to reduce. While the construction rate is not in line with the MoRTH’s target, the pace has certainly improved. In the future, the sector will continue to offer new and innovative opportunities under the NHDP, big-ticket programs like the Bharatmala and the toll-operate-transfer (TOT) model to stakeholders across the board. The sector is on a gradual path towards revival. Long-term and innovative funding avenues are emerging in the market. IRB Infra Developers and MEP Infra Developers have launched infra investment trusts. ITNL and Reliance Infra also plan to list their assets under the instrument. In line with its plan to tap long-term funds from the Life Insurance Corporation of India, NHAI raised Rs 85 billion for 30 years at an

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interest rate of 7.22 per cent per annum. The first round of bidding for toll-operate-transfer projects is to be held shortly. Initially, 75 publicly funded national highway projects with an aggregate length of 4,500 km and an annual toll revenue collection of around Rs 27 billion have been identified under the model. Preparatory activities including the finalization of the model concession agreement and tender documents have been completed. Technology continues to be a key focus area of the MoRTH and NHAI. FASTags is now active at more than 360 toll plazas across the country. The Indian Bridge Management System has been launched to ensure efficient upkeep of the country’s bridge infrastructure. Online platforms like e-Pace and INFRACON, and the recently launched INAM Pro+ have eased operations. Road safety is another focus area of the government. It has set a target to reduce the number of fatalities due to road accidents by 50 per cent by 2020. In this regard, in March 2017, the cabinet approved changes to the Motor Vehicles (Amendment) Bill, 2016. The ministry has set a completion target of 15,000 km during 2017-18. During April-June 2017, the construction of about 2,300 km of national highways was completed, increasing the rate of construction to about 25 km per day. The MoRTH plans to further scale this up to 40 km per day. Significant opportunities will be offered to contractors, and equipment and material providers through programs like Bharatmala and Setu Bharatam. Providing a major fillip to its expressway development agenda, the NHAI has floated tenders

for the appointment of contractors for the MumbaiVadodara expressway and consultancy bids for the Delhi-Amritsar-Katra (for the feasibility study) and the Delhi-Yamunanagar expressways (detailed project report preparation). Meanwhile, the central govt is also laying emphasis on multimodal transport and is in the process of launching the Multi-Modal Logistics and Transport Policy. The overall outlook for the sector is optimistic. As per the MoRTH, what remains to be dealt with is the bureaucratic logjam. While the issues have largely been dealt with, private players need to now make the most of the opportunity put forth by the govt. PPP model is here to stay; however, its uptake will be at a pace much slower than seen in the mid-2000s. Land acquisition is still an area of concern for many projects. There is a need for a more effective dispute resolution mechanism, proper project development and preparation, and a more balanced risk allocation. If the situation is to be improved further, NITI Aayog should hold consultations among stakeholders including bankers, contractors, investors and the govt. This will result in the formation of a balanced MCA to support PPP projects. There is huge growth potential in the sector. GoI aims aim is to increase the NH network to about 200,000 km and bring 80% of the traffic on national highways. The stakeholders, however, need to think innovatively. Seems the Govt is aware of the financial constraints and expects the benefits of the PPP model to be leveraged by domestic players and investors. This is a golden period of opportunities for the infra sector.

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INTERVIEW

Pradeep Sharma President

Action Construction Equipment Ltd 60

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We value for money propositions and products coupled with quality, reliability and superior functional parameters and capabilities, leading to faster cycle times, improved efficiencies and productivity. Another important driver is our ability to provide fast product support through our countrywide network of dealers and offices equipped with genuine parts and trained engineers. ||www.constructionmirror.com/net||

Q. Brief us about Action Construction Equipment Ltd. and its core business?

ACE is Indiaâ&#x20AC;&#x2122;s leading material handling and construction equipment manufacturing company with a majority market share in Mobile Cranes and Tower Cranes segment. In addition to Mobile Cranes, ACE also offers Tower Cranes, Crawler Cranes, Truck Mounted Cranes, Lorry Loaders, Backhoe Loaders, Vibratory Rollers, Forklifts, Tractors & Harvesters and other Construction Equipment. ACE has a consolidated presence in all major Infrastructure, Construction, Heavy Engineering and Industrial Projects across the country. ACE is promoted and managed by professionals having rich experience in Construction Equipment domain. We are dedicated to provide our customers with latest technology Construction Equipment and efficient sales and product support aimed at satisfying their real needs.

What are the new trends according to you emerging in the different sector in construction equipment segment?

Growth finally returned to the Construction Equipment Industry & with Govt. continuous focus on Infra and Public spending next couple of years may turn out to be Golden Era for the Industry in terms of volume and growth. Except Real Estate most of the segments like Roads, Mining, Irrigation, Ports etc. have started doing well & in couple of quarters when the impact of Smart City projects & affordable Housing concept is felt delivering, ||www.constructionmirror.com/net||

Construction Equipment Industry will witness a further push. Despite the prevailing global uncertainties, rising needs for better infrastructure, modernized methods for agriculture and growing complexity of mining/manufacturing technology will boost demand for technologically advanced equipment in these segments. Moreover, looking ahead as the growth path widens for the emerging and developing nations, India would be one of the most attractive investment destinations globally. The new political dispensation lends a lot of credibility and hope for the growth of infrastructure and economy in future. ACE is fully geared-up for this forthcoming growth as the market improves. The key success factors for the future depend upon innovative financing and value-added services where the focus is on increased penetration of financing leasing and rental services, providing adequate maintenance to equipment and training to crew, and facilitating immediate repair and refurbishing of equipment. The study also points out the importance of R&D and innovation in terms of appropriate product technology and pricing, product customization for different applications, product reliability and ease of use, and last but not the least, post-sales support in terms of service and training infrastructure, focus on maintenance of equipment, ensuring the availability of spare parts and widening the distribution network to service the client better.

What are the challenges you facing in the market and how do you cope up with that? ACE has always believed in innovation to achieve excellence. The Group has introduced new technologies and new models across its product

range at a phenomenal pace which has helped us in enhancing our Market Share despite all challenges. Also, Company has a diverse portfolio consisting of wide range of products covering all segments of Construction, Earthmoving, Material handling and Agriculture sectors. The importance of R&D and innovation in terms of appropriate product technology at right pricing, product customization for different applications, product reliability and last but not the least, post-sales support in terms of Parts, Service and Training have been the major catalysts for our growth in top line. We are the market leaders in the main product segment i.e. Cranes. We are also fully equipped to cater to markets in product segments which we have entered in the past 5 â&#x20AC;&#x201C; 7 years as we have huge installed capacities for our entire product range. We are confident that we can substantially scale up our market share in Earthmoving and Road Construction Equipment and also grow our Agriculture business. This would further enable the company to improve both its Top and Bottom lines significantly without much Capex in next couple of years.

What is the USP of your products and you key strategies? Our USP is Value for money propositions and products coupled with quality, reliability and superior functional parameters and capabilities, leading to faster cycle times, improved efficiencies and productivity. Another important driver is our ability to provide fast product support through our countrywide network of dealers and offices equipped with genuine parts and trained engineers.

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CONSTRUCTION MIR ROR

INTERVIEW

Ajay Kudesia Vice President - Sales and Marketing

Kryton Buildmat Co. Pvt. Ltd. 62

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The Company is headed by Civil Engineers with decades of Indian and international experience between them. The Company has worked closely with engineers, developers and architects from across the country to develop products that are ideal for the challenging Indian sub-continent construction needs. ||www.constructionmirror.com/net||

properties, but also physical properties, the Krystol

An early entrant in the Indian market, Kryton Buildmat Co. Pvt. Ltd. (Kryton-India) has been building a waterproof India for over 2 decades. The first and till date one of the few crystalline waterproofing chemicals manufacturers in India, Kryton India takes pride in delivering customised solutions for technically complicated projects pan country and across varied types of constructions. The Company is headed by Civil Engineers with decades of Indian and international experience between them. The Company has worked closely with engineers, developers and architects from across the country to develop products that are ideal for the challenging Indian sub-continent construction needs. Approved and recommended by Central Public Works Department (CPWD), Engineer’s India Limited (EIL), Municipal Corporation of Delhi (MCD), National Buildings Construction Corporation (NBCC) the Company’s promise of quality is ensured through the ISO Certification, BIS and IS yearly qualification/ audits.

crystals permanently fill the pores, capillaries and hairline cracks of the concrete mass, and continue to grow throughout the concrete, reaching lengths of many inches over time. Once the concrete has cured, the crystalline chemicals sit dormant until another dose of water (such as through a new crack) causes the chemical reaction to begin again. The ability to reactivate in the presence of water gives Krystoltreated concrete the ability to “self-seal”. When cracks form due to curing shrinkage, settling, seismic activity, etc., water entering through them causes new crystals to form and grow, blocking and filling the cracks.

Brief us about Kryton India and its technology uses water as a catalyst to create long, narrow crystals within the concrete itself. These success story to our new readers?

Q. What are the products and services you offer to the customer?

The Company has a wide range of products for new and old concrete with their award winning Krytsol Technology. Unique in terms of not just its chemical

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Q. How is Kryton India looking to the Indian construction market?

The Indian construction market has seen a number of ups and downs. The real estate has seen a boom and has also seen a slow down. But what has kept the contractors, construction equipment, chemicals and other manufacturers on their toes has been the constant investment in the construction and maintenance of infrastructure projects. Dams, ports, metro, railway , refineries, these projects have been at the backbone of creating a need for international technology that will work specifically for the Indian

conditions. We are looking at these infrastructure projects to push through in the immediate future and bring with it, opportunities to showcase the best of the industry. Also, with regularized construction in real estate, the need for more durable solutions that add decades to the construction is going to be the need of the day.

Q. How Kryton India working towards the

changing trends made by the government which are in favor of the construction materials mainly, how much you find it beneficial? As discussed above, the changing trends are more demanding in terms of quality and are asking for chemical companies to step up and give solutions that will work. The government has been focusing on solutions that will add years to the structures and not need constant repair and upkeep. Another point of focus has been on time saving. In both private and public sectors, on-time completion is not a luxury but a necessity and so any solution that will help save on construction time will see a boost in sale. These points together are a promise that quality will be the main agenda and so products, solutions and services that have quality at their core will definitely lead the way to designing and developing the new stronger, better India.

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CONSTRUCTION MIR ROR

G uest Article A Revoltion on Concrete Product Plant Automation. Po Tech machine has spread out their market to India one and a half years ago with their fluent experiences made through manufacturing, installing and operating more than 100 plants in South Korea and Southeast Asia last 25 years. Po Tech offers small concrete product machine with many benefit which you may not seen before in India market at a competitive price for making their initial market through 2models, PT5555 & PT5243.

Full Automatic Plant

There are 3 main strong points of Po Tech machine. First, Even if Po Tech use small size steel pallet(550X550), by adopting different stamping method(Vertical production) based on strong vibration power, both model (PT5555 & PT5243)has 1.5 ~ 2 times of production capacity than similar machine in brick production (67000 Brick of 230 x 110 x 70mm in 8 hrs shift.) As for paving block, Unistone 80mm/100mm, to produce colour pavers @ 16000 to 19000 per 8 hrs shift, 8pcs at a cycle and possible to attach face treatment device. Other than this, from 60mm to 250mm height of various products can be manufactured such as block, brick, kerbstone, paver.

Colored Paver

Third, Every systems designed very compactly with full automatic function (Rack loader, Unloder, Cuber) so only 30mx60m space required for full automatic plant. In other words, initial invest cost is less and maintenance is easy. Total Manpower required to operate fully automatic plant from batching to cubing is 2 to 3 only. It may be a general feeling that there will be high tax rate for importing from overseas. But South Korea has tariff agreement called “CEPA” with India so in case of Po Tech machine, including basic duty (1.56%), total tariff is 19.89% at present. But if customer is manufacturer, GST(18%) will be refundable. This is a big benefit. The Guide of sales, service and spare parts will be supplied from Kolkata by Mr. J. R. Mohanty who has experienced more than 25 years in this industry particularly more than 15 years with Columbia Machine who can extend this experience and expertise for mix design and product development. We have service people to cover the need of the earliest along with full set of spares in ready stock at Kolkata. In a highly competitive situation in related industries, Po Tech thinks customer first and will share profit with international society. If you would like to meet a highly productive and ideal machine, choosing Po Tech will be best solution.

Main machine with Face treatment device

Second, Po Tech machine has differentiated unique filling system “Impeller” which can reduce filling time, fill mortar evenly to a very narrow space in a mould. I n case of hollow block, 14 mm wall thickness is possible so customer can reduce consumed material, production cost, and keep same quality of sound proof, insulation and good strength. Moving cubed product without base pallet

Please contact us :

E-mail: sales@PotechMc.com Web:www.potechmc.com Impeller 64

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Hollow block (14mm wall thickness) || NOVEMBER 2017 ||

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Focus: Challenges in Setting Up Smart Cities

Urbanization Problems and Challenges in Setting Up Smart Cities

CONSTRUCTION MIR ROR

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hat makes a city smart?

With increasing urbanization, Indiaâ&#x20AC;&#x2122;s urban population is expected to increase from 377 million in 2011 to 600 million people by the year 2031. Almost 50% of the total population will live in urban areas. According to a recent report on Indian urban infra & services by a high-powered expert committee set by the GoI, the urban share of the GDP is expected to rise to 75% in the year 2030 from around 62-63 percent in the year 2009-10. The number of cities is projected to increase to 87 in the year 2031 from 50 in 2011. Urban areas will be critical to the economic growth of the country and they will require a massive overhaul to accommodate the future population. To cater to this increasing urban population in the future, cities need to plan and provide a suitable environment for future investments, create new jobs and livelihoods, build reliable public infra, provide social services with ample access to affordable housing and most importantly support efficient use of resources for a sustainable quality of life. Smart City Components: Integrated transport and increased connectivity; 100% coverage of utilities- solid waste mgt, storm water drainage, telecom, electricity, water, integration of ICT with transportation, utilities to allow real-time monitoring; energy efficiency and the use of renewable resources; sustainable building practices; access to jobs, education,

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healthcare.

Based on the stage of ICT integration in project life-cycle smart cities can be broadly classified into three types: new cities, retrofitting existing cities with smart technologies, and purpose-driven cities. New cities integrate ICT in all aspects to attract citizens and businesses by providing quality services. Retrofitting existing cities into smart cities is a step-by-step intervention to integrate new processes into the older systems to achieve the overall objective of creating a smart city. Purpose driven cities could be industry centric, built around science towns or other core activities. The scale of each of these types of cities could greatly vary. However, all the smart cities broadly consist of ICT integrated projects in various sectors viz.; Environment, Energy, Transportation, Smart Buildings, Governance and Social Infra. ICT: Smart cities are defined by extensive use of

technology to make the cities sustainable and improve the overall quality of life. Such technology dependent initiatives require platforms that allows constant innovation and improvement of existing technologies to increase the overall performance in all sectors including digital technology, automobiles, energy, healthcare and transport systems. ICT forms the fundamental support system for smart cities and it is integrated across different sectors to achieve transparency and efficiency in processes. It can be used to improve power use and distribution, ensure 24/7 water supply, improve efficiency in mobility through intelligent transportation and traffic management, enhance automated surveillance and security systems and enable Wi-Fi powered open spaces and houses for businesses. It can also be implemented for efficient use of scarce resources and real-time tracking of available services. It has the potential to provide quick response in emergencies as well. The scope of integrating ICT is unlimited and it is largely dependent on availability of funds and the set goals and objectives for different cities. Environment: Smart cities take measures to plan for future generations while protecting the natural environment and resources to reduce the overall carbon footprint. Some of the major agendas can include: a) Use of Renewable Resources: Smart urban environments require renewable sources of power to reduce dependency on coal for energy

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Focus: Challenges in Setting Up Smart Cities generation. b) Promoting mixed-use developments and encouraging walkability: Smart cities include walkable communities where major trips could be completed within a short distance through walking, cycling or public transportation with reduced trip transfers. For this, work spaces and living spaces are located in close proximity to each another. c) Reduction in wastage of resources: Through the use of ICT, smart cities focus on reducing wastage of resources such as water, electricity, etc. by identifying and isolating the source of leakages, controlling peak, non-peak hour usage, identifying equipment needing repairs and/ or replacement, etc. They also implement efficient technologies for recycling waste water and solid wastes. Energy: Efficient energy management is crucial to a smart city due to its large dependence on power. Smart metering and wireless connected sensors are some of the technologies that have been adopted for energy management. Smart meters allow two-way monitoring from both the utility provider as well as the end-user to monitor consumption, peak hour loads, etc. These systems provide necessary information to the citizens to help manage their tariffs. Additionally, smart cities also use smart grids, which are power grids that are integrated with controls, automation and new technologies to allow efficient transmission of power, quicker restoration of power outages, reduce overall operation and management costs and integrate renewable energy systems. In addition to this, they give financial incentives to the consumers to shift the electrical demand during off-peak hours. Overall, smart grids offer opportunities to save energy while reducing dependency on fossil fuels. According to 12th plan energy projections, only about two-thirds of our total energy needs will be produced domestically by the year 2021-22. Dependency on imports will be essential to bridge the energy demand and supply gap. Energy intensive smart cities will only spike up the already heavy dependence on fossil fuels for energy production, unless renewable fuel alternatives are available. Currently, only 2% of India’s energy generation can be attributed to renewable sources. There is an immediate need to develop technologies to increase dependence on alternative energy sources to make smart cities financially and ecologically viable. Coal-based energy supply cannot be a long-term solution for an initiative that aims to be sustainable in its approach. Transportation: Smart cities provide seamless integrated public transportation networks across multiple modes including rail, metro, bus and non-motorized transportation (walking, cycling). Ideally, ICT is integrated with the transport networks to allow real time tracking and increase citizens’ access to information on transportation. Guided parking and volume-based traffic control systems aid in addressing 68

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traffic challenges and improving mobility. Other measures to provide smart transportation solutions may include smart cards, asset and fleet management, toll and parking management. Smart cities also promote the use of low polluting vehicles and EVs. Land-use planning is integrated with transportation planning to reduce trip distances and increase walkability. Enhanced urban design of the streets support high pedestrian activity and engagement of people with the surrounding spaces, activities. Buildings: Smart cities include buildings that are sustainable in terms of the materials used and construction techniques employed, to reduce the overall carbon footprint. Intelligent systems, which include sensors and control systems, can optimize the overall building energy usage, along with the efficient use and mgt of utilities. Smart building tech’s can help reduce maintenance costs and enhance occupiers comfort, health and safety. Governance: Governance becomes a crucial part of the implementation and sustenance of a smart city. Smart cities include an integrated governance system that employs technology for ease of movement of information and efficiency in all of its processes across several departments. E-services, social media, applications and other platforms allow interaction between the govt and its citizens whilst keeping the latter engaged and updated about the latest developments. Social infra: health and education: According to the report by the high-powered expert committee mentioned earlier, a total investment of about INR 39.2 lakh Cr will be required over the next 20 years to meet the infra deficits and service delivery shortcomings. Urban services like water supply, sewerage, solid waste management, storm water drains etc., would require at least 20% of the total anticipated investment. Construction, operation and maintenance of new and existing infra will also be critical. However, given the current rates of investment in urban infra, there is likely to be a huge shortfall in meeting anticipated demand. In addition to the physical infra, the new cities will need heavy investment in social infra (which includes housing, education, healthcare and entertainment among others). Securing funding to implement such large-scale infra developments will be crucial and a challenging task. Access to quality social infra (primarily health; education), is crucial for every city. Smart cities provide these services with the integration of technology to reduce expenses, where possible, and provide timely support. Moreover, a highly skilled environment that is created through a smart city, requires skilled human capital necessary to support and sustain the cities for the future. Skilled human capital: Smart cities require ‘smart’ citizens to run and maintain the cities as well. The

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working population needs to be prepared for the employment opportunities that the cities will provide. In addition to this, they need to embrace the innovations, adapt and engage. Access to quality education and training, and other necessary support and guidance will be critical. Capacity building to improve the skills of personnel in relevant govt agencies is also required for quick absorption of various new technological interventions in the govt processes. Future cities need to simultaneously and continuously provide the right env. for innovation, productivity enhancement, thereby providing employment opportunities for the new population. Smart cities introduce a new paradigm in the way cities are envisioned. There is no singular definition for a ‘Smart’ city; however, it can be identified by certain characteristics. A smart city should ideally offer swift seamless mobility, round the clock accessibility to urban services, access to quality healthcare, education, jobs, affordable housing. Smart cities aim to reduce anticipated complexities, expenses that accompany future urbanization. Hence, integration of ICT, energy efficiency, sustainability forms the backbone of these cities. For enabling and supporting these initiatives, the smart cities also require accountable, empowered ULBs. Overall, smart cities promise to provide a quality of life that can support future generations sustainably.

Smart Cities Mission

Smart Cities Mission which envisions the smart development of select Indian cities is one of the premier initiatives of the central govt. The mission was launched by the govt in June 2015 with the release of guidelines and a mission statement for the 100 Smart Cities project. The mission has been allotted a budget of Rs 480 bn for 5 years. While the concept of a smart city lacks a clear, set definition, it is widely accepted that it varies from city to city, and essentially involves “urbanizing” cities. Thus, “smart” is a relative term. The extent of “smart” features required to be put in place in a city will depend on the existing level of development as well as the targeted level of development. An examination of smart city proposals reveals that a holistic approach has been proposed across cities, in a bid to renew the entire urban ecosystem. The mission aims for comprehensive development of the selected cities, at the institutional, physical, social and economic infra levels. After the first round of selection of 20 cities was concluded, the govt announced 13 new cities in second round in May’16. Detailed plans have been chalked out for these 33 cities in terms of their smart development. ||www.constructionmirror.com/net||

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Focus: Challenges in Setting Up Smart Cities

Focus areas

33 cities selected under the mission have different focus areas, depending on the current level of infra development. Across these cities, there are over 1,500 projects worth at least Rs 720 bn (the cost of only those projects has been considered of which information was available) across a vast variety of sectors such as energy, mobility, housing, water supply and sewerage systems, waste management, safety and security, governance, education, health care, public amenities, rainwater harvesting, etc. Projects to be undertaken in the cities essentially fall under the broad categories of infra development and ICT initiatives. Key projects typical in the mobility sector include traffic mgt systems, smart parking systems, development of roads and non-motor transport corridors, e-rickshaws, etc. In the energy sector, most projects involve the installation of consumption meters, deployment of supervisory control and data acquisition and other similar technologies, tapping of RE sources, etc. A no of housing projects involves slum redevelopment as well as construction of new housing societies. With regard to water and sewerage systems, the routine type of projects are those for the provision of 24×7 water supply, smart metering, installation of energy-efficient pumps, etc. In this space, there are also projects related to the development of sewerage systems and wastewater recycling. Waste management is another area that has a significant number of projects. Those for geotagging of bins, door-to-door waste collection, solid waste mgt systems, etc. are common across a number of selected cities. A number of proposed projects also involve the installation of safety and security systems. Some of these are the installation of fire hydrants, equip. for firefighting, disaster mgt systems, and the deployment of closed-circuit television cameras on the streets. Other key projects pertain to digitization of classroom learning in schools, creation of healthcare centres, development of parks and recreational areas, street lighting, rainwater harvesting, restoration of heritage monuments and sites, etc.

SPVs

The key implementing agency of any given smart city project will be the special purpose vehicle (SPV) that is to be established for each city. A typical SPV will be headed by a full-time chief executive officer and its board will comprise nominees from the central govt, as well as the respective state govts and ULBs. The SPV will plan, appraise, approve, release funds for, implement, manage, operate, monitor and evaluate the smart 70

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city development projects. State govts & ULBs are mandated to ensure that a dedicated and substantial revenue stream is made available to the SPV so as to make it self-sustainable and to enable it to evolve its own creditworthiness for raising additional resources from the market. Project execution can be through joint ventures, subsidiaries, PPPs, turnkey contracts, etc. suitably dovetailed to revenue streams. As present, barring the New Delhi Municipal Corporation (NDMC), Chennai and Coimbatore, all the other cities (of the 20 announced in the first round) have SPVs in place. Formation of SPVs for the 13 cities announced in the second round will be undertaken soon.

Financing

An investment of Rs 508.02 bn was proposed for the 20 cities announced in the first round. For the 13 cities announced in the second round a total investment of Rs 302.29 bn has been planned. Together, these 33 cities selected under the mission entail an investment of at least Rs 800 bn. Clearly, the financing requirements are huge. As per the SCPs of various cities, the main sources of funds are outlays by the central govt (under the Smart Cities Mission) and those by the respective state govts. Besides, funds are also likely to be diverted from the ongoing schemes of the central and state govts. While at the state level these schemes may vary, some important central schemes that will financially assist projects proposed in the SCPs are the Pradhan Mantri Awas Yojana (housing projects), the Atal Mission for Rejuvenation & Urban Transformation (for transportation/mobility projects, water supply, etc.), Digital India (for ICT implementation/egovernance projects), Skill India, the Integrated Power Development Scheme (for power projects), the Swachh Bharat Mission, the MNRE Solar City Mission, the National Urban Livelihoods Mission, and the National Health Mission. Convergence with such schemes will be an important source of financing for the Smart Cities Mission. Further, international funding agencies such as the Asian Development Bank and the World Bank are also key sources of funds, and some financial commitments have been made for select cities. Private sector participation (through PPP projects) will also be crucial to bring in finances from the private sector. One of the most critical aspects of the Smart Cities Mission is the mobilization of funds for the planned projects. Based on the estimates of the High-Powered Expert Committee on Investment, the requirement for financing smart cities is as much as Rs 350 bn annually for the next 2 decades. Factors such as fiscal limitations of the govt at both the central and state levels, the poor financial health of most ULBs in the country, and the problems associated with the PPP model reflect the need to depart from regular financing models and graduate to the formulation of innovative funding solutions.

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Until some headway is made in this direction, the private sector (which has the potential to be a game changer) will not be interested in investing its funds in this space. Confidence building is one way the govt can undertake the task at hand. Recently, in a bid to “crowd in” investments from the private sector, the centre revealed the progress on the credit rating of ULBs of those cities that have been included in the Smart Cities Mission as well as the AMRUT. The idea is to grade the ULBs in terms of their financials, so that efforts of raising funds from the market through bond issuances garner investor interest. A total of 94 cities were accorded credit ratings. Of these, 55 received investment grade ratings. Of the total 20 ratings that range from AAA to D, ULBs that have a grade of BBB- and above are investment grade. Cities that are ranked below this level are required to undertake the necessary interventions to improve their financial standing. Credit ratings are assigned based on assets and liabilities of the ULBs, their revenue streams, resources available for capital investments, and accounting and governance practices. It is pertinent to note that in addition to the credit rating of ULBs, ratings for individual projects (for which resources are to be mobilized) too have a significant impact on the channelization of funds. Another noteworthy step has been the introduction of the value capture financing (VCF) model by the Ministry of Urban Development in Feb’17. It is planned that VCF will be an integral part of the detailed project report of all central govt projects. Globally used model is based on the govt’s right to claim a part of the increase in asset value resulting from its investment decisions. In other words, govt investment towards developing public infra often leads to rapid economic development in those areas, resulting in high land prices. A VCF framework opens a channel for the govt to tap into this increment through various means such as the imposition of additional taxes, development charges, etc. and in turn utilize the funds thus raised to finance future projects. The fund requirement for the Smart Cities Mission is large and while the govt is extending financial support through various schemes such as AMRUT (which converge with the mission), it has limited fiscal capacity. In light of this, private participation is an absolute must. However, the poor uptake of the PPP model may have a significant impact on the financing for the mission. While the Kelkar Committee has recommended ways to fix the model, it may take a while before this is actually done. The recent credit rating exercise is expected to increase some investor confidence, and is likely to translate into fund flow. VCF is another laudable step that is expected to pay off and open up new avenues for capital recycling. That said, a host of factors will have a bearing on the bankability of projects. The cost of funds, financial design of projects, ||www.constructionmirror.com/net||

and contractual clauses will need to be meticulously incorporated into project conceptualization. Often, problems in these areas are overlooked in the appraisal process and this leads to capital being locked in and further prevents fresh investment.

Risks

There are certain risks that could impact the successful implementation of the Smart Cities Mission. For instance, the digital divide that exists among citizens poses a risk of non-inclusion of those without access to the internet. These citizens are not likely to benefit from the potential gain from those projects that involve ICT implementation for better services. On the capacity side, the implementation of SCPs will require skills that are not available across various govt agencies and will routinely require the formulation of strategies to deal with day-to-day challenges.

Opportunities

The scale of the mission is immense, given the involvement of the govt machinery and the task at hand. This is also an opportunity for various stakeholders. According to the National Association of Software and Services Companies, the Smart Cities Mission can create business opportunities worth $30 bn-$40 bn for the information technology industry over the next five to ten years. These opportunities will emanate from the ICT-based projects that are planned to be taken up across all the selected cities. There will also be tremendous scope for urban planners, equipment and technology providers, etc. However, certain issues need to be addressed before the transformation of a city into a smart city is possible. The current situation reflects fragmented accountability where cities are subject to rules and regulations drawn up by the centre, state and district administrations. Also, not all departments that operate in a city have a central command and thus departments are often not coordinated. The approach for developing these cities into their “smart” versions calls for a concerted effort by all the stakeholders involved. Approaching the mission in silos will only serve to thwart it. The successful implementation of the Smart Cities Mission rests crucially on a collective approach by the govt (central and the resp. states) and the citizens. Political will and the technical capability to engage citizens in policymaking will shape these urban centres. In this sense, building social capital is of prime importance. Technology is another crucial factor which will bridge the existing gaps in the system, as well as enhance efficiency and governance levels. Given the fact that the Indian economy is being increasingly driven by highly skilled services such as IT, telecom, engineering and knowledge services, there is tremendous potential to utilize and develop the available human capital and skills for incubating

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future innovations in ICT integration. In addition to this, the political will and commitment of the central govt promises to bring in large-scale reforms to support the smart cities initiative. ICT is the basic infra for all the smart cities. There is no limitation on the collaborations and innovations that can be adopted across various departments and with multiple stakeholders. ICT enables the city and the governance to bring in participation from the citizens and integrate their inputs in the processes. By extending community participation, it not only empowers the citizens, but it also allows them to develop a sense of ownership of their cities. Thus, the smart cities initiative would result in sustainable and thriving Indian cities; new and old, if implemented properly with active involvement of all stakeholders.

Update on the Smart Cities Mission

Smart Cities Mission, one of the pioneering projects of the central govt, was launched in July 2015. So far, the govt has selected 60 cities in three rounds. In Round I, 20 cities were selected, followed by 13 in the Fast Track Round, and 27 in Round II. With regard to the mission’s progress on the ground, projects worth Rs 1,321.97 bn were approved between Jan & Dec’16 for the cities selected so far. In Union Budget 2017-18, the govt allocated Rs 40 bn for the mission. Meanwhile, cities that failed to make it to the previous lists and are competing in the 3rd round are making significant headway in terms of preparations to compete in the upcoming round. Cities such as Bengaluru, Ghaziabad, Bilaspur, Oulgaret and Thiruvananthapuram are expected to be selected. Some cities, such as Bareilly, Rajkot, Dahod, Karnal and Muzaffarpur are in the process of citizen engagement and are receiving public comments for finalising their smart city proposals. While it was earlier stated that the cities selected in the third round will be announced by Mar’17, there is no further update from the govt.

Institutional progress

Tracking the progress of the mission, in terms of SPVs set up, during Nov’16-Feb’17, 26 cities had incorporated their SPVs. All the cities chosen in the first round have established SPVs and are moving ahead with project execution, as envisaged in their respective smart city plans. However, some cities such as the New Delhi Municipal Council (NDMC) are facing issues and are believed to be lagging behind the planned project execution schedule. Cities such as Rourkela and Tirupati are in the process of finalizing project mgt consultants.

Project progress

As of Jan’17, there are about 731 projects across the 60 cities, entailing an investment of about Rs 463 bn. Of the total investment, over 54% (Rs 250 bn) pertains to works related to core infra creation (under area-based development), while 12% (Rs 54.68 bn) is for projects involving the setting up of smart solutions. The remaining 34% (Rs 158 bn) is for projects that relate to pan-city and non-core infra creation. Of the total projects, 24 have been completed, while work on another 49 is in progress. However, work on a significant portion (about 53%) of the

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Focus: Challenges in Setting Up Smart Cities

planned projects is yet to be initiated. Other projects are at various stages of initiation. The execution of smart city projects in cities such as Ahmedabad, Surat, Coimbatore, Amritsar, Ludhiana, Nagpur, Kochi, Davangere, Bhopal, Visakhapatnam and Belagavi are progressing at a fair pace. Considering the sector-wise split of all the projects, as per the MoUD, the maximum investment is expected to be witnessed in the housing sector (Rs 100 bn), followed by urban transport (Rs 72 bn), and area-based development (Rs 68 bn). Energy, water supply, and information technology connectivity are other areas likely to witness significant fund flow.

Major Issues and Challenges

As the selected cities in the Smart Cities Mission are pulling loose strings together and making headway in the execution of smart city projects, the challenges involved cannot be disregarded. The concept of a smart city is gaining traction in India slowly, and thus the newly set up SPVs are facing teething issues. Financing remains a lacuna, and is expected to be addressed through the issuance of bonds and greater participation from the private sector. For this to happen, however, the initial push has to be provided by govt entities. India is currently lagging seriously behind on sustainability of its urban areas for a variety of reasons that range from overcrowding and congestion to poor quality and grossly inadequate infra resulting in polluted & decaying living environs. Consequently, there are a no of challenges in retrofitting and even developing new smart cities. The most prominent ones are: 72

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The Right Model for Smart Cities in India’s SocioPolitical Context: Smart cities are largely being projected as an epitome of India’s educated citizens’ aspirations. It is feared that it will lead to non-inclusive developments; smart cities will meet the requirements of only the educated middle class and their aspirations, and there will be profitable real-estate ventures in the form of restricted enclaves. Opportunities for marginalized groups will not be created in such an urban environment as it may not yield economic returns. There has been no consensus on defining the indicators for an Indian Smart City till date. This may result in fragmented concepts of smart cities being implemented, leading to further exclusion. Social Acceptability, Livability and Sustainability Concerns: The Smart City Mission lacks clarity in its conceptualization. The focus seems to be on technology implementation, without an overall framework to understand the need and impact of the same. There is a lack of clarity in understanding the end (Smart City) and the means to reach the end (ICT). The image of smart cities is projected as heavily instrumented and automated. Also, there are concerns over the privacy and security of sensitive personal data being accessible by unintended users. This raises issues related to livability in a smart city and its acceptability in India’s social context. The resource requirements, including energy and its associated environmental impact in an instrumented city raise concerns on the environmental sustainability of these cities.

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Convergence with Other Urban Sector Programs: There is ambiguity on whether the initiatives under the Smart Cities Mission will be one-time investments with asset creation as a goal or whether it will be an approach to introduce certain critical structural reforms in the way Indian cities are planned and managed. Recent developments suggest that there are some convergences between the Mission and the New Urban Rejuvenation Mission. Similarly, programs such as the Swatch Bharat Mission should be aligned with and complement the Smart Cities Mission. However, a clear roadmap is required. Adequate incorporation of the spatial aspect of a city is of critical importance12. In addition to these concerns, how the smart cities programme will anchor and drive growth in the larger hinterland, is not clear. Roadmap, Process and Scale of the Smart Cities Mission: If the Smart Cities Mission is an attempt to upgrade existing cities and prepare them for the future, then there is a need for a universal approach/ framework to be developed under the Mission. The design and development of a sustainable, economically viable framework will help in achieving a city’s growth objectives in a participatory and inclusive way. Currently, the notes released by GoI do not provide information on any such framework. Also, the on-ground projects named Smart Cities, across the world, show that India needs to appropriate internationally practiced approaches to suit the scale, size and context of its cities. The selection of cities as ||www.constructionmirror.com/net||

pilots under the Smart Cities Mission has been widely understood as a political decision. There is a need for a more objective process to be followed in selecting cities to better ensure their success and enhance the possibility of replication in other cities. Funding Strategy for Smart Cities: It is anticipated that developing smart cities will entail substantial investments, which will be locked-in for a long term, and in turn shape India’s urban future. According to the High Powered Empowered Committee on Urban Infra (HPEC), INR 7 lakh crore is required for the next 20 years to bridge the existing gaps in India’s urban infra. This amounts to INR 35000 crore per year13. The need for private sector investment in urban development, including smart cities, is thus important. Without an urban development policy and an urban planning framework, private sector dominance at this juncture of urbanization is indeed a challenging situation due to the following reasons: Private sector (real estate developers, IT CoS, etc.) investment will be ad hoc and will be driven mainly by profit motive. Foreign capital will only be targeting investments that have higher rate of return, and many public services may not fall in this realm. These investments will ensure return on risk, and will rely on financially sustainable business models. The regulatory, financial and institutional env. is still not geared for this type of investment. Without a substantial share of funding coming from GoI and states govts, ULBs in poor financial health will be deemed as unattractive, even if there is growth potential. This may further lead to favoritism with more funds being given to richer states and richer ULBs. ` Programme Design, Operationalization and Institutional Arrangements: Any new programme or scheme proposed by the Central govt should be in cognizance with the fact that the governance of a city is a State Subject (under the Constitution). The problems with previous programs that the Mission needs to address include: Lack of capacity in smaller cities to implement urban development programs. The existence of a big-city bias is evident from JNNURM evaluation studies. GoI’s control over programme implementation and sanctioning of funds may lead to delays. Studies have indicated that involvement of higher levels of govt increasingly affect the process of empowerment of local bodies. Lack of use of participatory approach in capturing a local community’s needs and local solutions. The role of ULBs in program design, operationalization are limited. Programs generally lack critical inclusion aspects. More opportunities for livelihood do not automatically translate into inclusion, especially gender concerns. Planning tools used in programs (such as CDPs under JNNURM) fell short of effectively linking city growth plans with its spatial character. Use ||www.constructionmirror.com/net||

of template-based and over-simplified retrofitting city growth models resulted in less contextualized plan targets and generalized strategies. Fragmented nature of programme implementation led to non-achievement of some of the key agendas such as creation of world class cities. Selection procedure of cities and towns and geographical and population coverage are critical factors in determining a program’s success. Previous urban development programs were found to be lacking in this aspect. This is partially responsible for the non-fulfilment of their respective dev. agendas. Sectorial bias led to over-emphasis of certain types of infra creation. For eg, 63% of the JNNURM funding was received by water supply, drainage, sewerage sector in Mission cities. Capacity of Institutions to deliver Technology-centric Reforms: The last decade saw the initiation of e-governance programs as part of the municipal reform agenda. While there are positive structural changes that have taken place through the implementation of these programs, some of the major challenges they faced are mentioned below: Creating and retaining a capable human resource pool, especially at the small and medium town levels. Creating capacity and motivating staff across ULBs to use technologyenabled tools. Continuing the use of manual systems of capturing data and complaints in parallel with computerized systems, creating dual databases. Poor Governance Structures: Delivering good governance has been emphasized as a key agenda of GoI. The fact that technology can be an enabler in fostering good governance characteristics has been recognized by govts and experts. However, technology in itself is not neutral. It works in certain contexts and yield results accordingly. Urban local govts in India have limited financial autonomy and the capacity to

raise resources. The municipal govts are dependent on fiscal transfers. Several studies have identified fragmented institutional set-ups and overlapping jurisdictional responsibilities as a hindrance in smooth implementation of projects and their service delivery to citizens. Additionally, the poor operation and maintenance of the existing assets has resulted in further problems. The governance structures need massive restructuring to undertake a major project such as the implementation of smart cities. There needs to be a shift away from state-centric planning to a more decentralized but regionally inclusive approach. The urban local bodies need to be strengthened to be financially sustainable to undertake large-scale projects that provide effective local level solutions. There is a need to develop a shared design vision between different govt bodies to support efficient implementation. Finally, there is also a strong need to ensure that those in govt are suitably trained and geared up for: speedy responses to the real-time problems, and flexibility and imaginativeness to evolving demands of citizens. Thus, the govt needs to constantly evolve to adapt to the changing needs and respond to its citizens, thereby making them accountable and transparent at the same time. Complex Social Structures: Urban India hosts dense and highly populated microcosms of different population groups classified on the basis of religion, caste, community, social status, occupations, origins, beliefs, etc. On top of that, most large cities have half or more of their population dwelling in slums. Smart cities need to be able to cater to these diverse client groups whilst ensuring that their privacy and security are not compromised on. Further, all services and infra have to be affordable for all sections of the population and these cities should not become gated communities meant for a privileged lot.

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Focus: India’s Civil Aviation Industry

India’s Civil Aviation Industry Least Penetrated, Largely Untapped With Huge Growth Opportunities

ndia’s civil aviation industry is on a high-growth trajectory. India aims to become the 3rd largest aviation market by 2026. The Civil Aviation industry has ushered in a new era of expansion, driven by factors such as low-cost carriers, modern airports, FDI in domestic airlines, advanced IT interventions and growing emphasis on regional connectivity.

verview

Freight traffic on airports in India is expected to cross 11.4 MT by 2032. Growth in import & export in India will be the key driver for growth in freight traffic as 30% of total trade is undertaken via airways. Airports across the globe are planning on increasing their spending on new tech to keep up with surging passenger traffic, that is expected to double to 370 mn by 2020. Much anticipated double digit growth would make India as the world’s 3rd largest aviation market by 2020. Fliers would soon be able to use biometric details for security checks at airports after good feedback from a pilot project. Domestic passenger traffic expanded at a CAGR of 11.46% over FY06-17. According to DGCA, domestic passenger traffic witnessed growth at a rate of 22%, in comparison to 21.24% in FY16. International passenger traffic registered growth at a CAGR of 8.33% over FY06-17. During Feb’17, domestic airlines carried over 8.23 mn passengers, showing a growth of more than 23% compared to the same period last year. During FY’17, domestic passenger traffic increased by 22% in comparison with growth rate of 21.24% in FY16. During FY16, international passenger traffic increased by 7.72%. AAI dominates, but private sector participation is rising. Until 2013, AAI was the only major player involved in developing and upgrading airports in India. Post liberalisation, private sector participation in the sector has been increasing. Pvt sector investment increased to US$9.3 bn during the 12th FYP from US$ 5.5 bn in the previous plan.

India has 464 airports and airstrips, of which 125 airports are owned by AAI. 6 major airlines operate in the country. Market Share as on August’17 and Load Data for the month of August’17

Focus: India’s Civil Aviation Industry as published by Directorate General of Civil Aviation. Source: IBEF Sep’17

India Domestic Airline Market Share Nov’16; Source: CAPA - Centre for Aviation, Directorate General of Civil Aviation

6 major airports in the countr; Source: IBEF Sep’17.

Major Pvt sector players; Source: IBEF Sep’17

Market Size and Developments

As per the IATA, India will become the third largest aviation market in the world in terms of passengers by 2026. Furthermore, the IATA also expects the air passengers to grow at a CAGR of 3.7% to double from 3.8 bn air passengers in 2016 to 7.2 bn air passengers by 2035. India’s air cargo is estimated to grow at 9% over the next few years, according to Mr Ashok Gajapathi Raju, Minister for Civil Aviation, GoI. India has become the world’s fastest growing domestic travel market for the 22nd time in a row, recording a 26.6% YoY growth in Jan’17, according to the IATA. India has replaced Japan to become the 3rd largest domestic aviation market globally, recording a total of 100 mn domestic flyers in 2016, as compared to 97 mn flyers in Japan during the same period, according to Centre for Asia Pacific Aviation (CAPA). According to CAPA, domestic air traffic is expected to grow 25% and cross 130 mn in FY’17-18. The no of departures from India increased 20% YoY to touch 131 mn in 2016, according to the data by the IATA. CAPA estimates that India’s airlines reported a combined profit of US$ 122 mn in fiscal 2016. According to data released by the DIPP, FDI inflows in air transport (including air freight) between

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Apr’00 and Mar’17 stood at US$ 1.01 bn. Rolls-Royce Holdings Plc, the UK-based aircraft engine manufacturer, has opened a new defence service delivery centre in Bengaluru, which would deliver real-time solutions for improving capability and provide faster front-line support to over 750 aircraft engines used by the IAF, Indian Navy and State-owned HAL. Qatar Airways is planning to start India’s first fully owned foreign airline in partnership with Qatar govt’s investment arm, Qatar Investment Authority, as per Qatar Airways. Indian budget airline carriers Indigo and GoAir, plan to expand their network to Gulf cities like Doha, Sharjah, Dammam in 2017, which would likely boost the growth of Indian aviation sector. GVK Power & Infra Ltd., which operates the existing airports in Mumbai and Bangalore, has won the right to build Mumbai’s 2nd airport in Navi Mumbai, which will require an investment of Rs 16,000 Cr to build the airport with a capacity to handle 10 mn passengers annually in the 1st phase, expected to be operational by 2019 and 60 mn passengers a year by 2030. IndiGo, having 42% of the Indian aviation market has entered into a partnership with global distribution system services operator Travelport, to expand its global presence by distributing its ancillary products to the portal’s customers across 180 countries. Several European countries, including Greece, Netherlands, Georgia, Sweden, have shown interest in signing an open sky agreement with India, following the change of rules in India’s National Civil Aviation Policy (NCAP), which is expected to sig. enhance the country’s international connectivity. During the International Civil Aviation Negotiations (ICAN) 2016 held in Nassau, Bahamas in Dec’16, India has signed Open Skies Agreement to encourage connectivity and passenger travel between India and Jamaica, Guyana, Czech Republic, Finland, Spain, Sri Lanka, apart from resolving other issues such as greater traffic rights, new service agreements and code sharing with several other countries. According to CAPA, Domestic traffic could grow by nearly 25% in FY’18 and approach 130 mn passengers. The next FY is expected to be the 3rd consecutive year of domestic growth above 20%. Growth could be as high as high as 25% but may be tempered by 3-5 % points because of the impact of demonetisation. Traffic growth remained strong in Dec-2016 and there are as yet no signs of a slowdown. However, the purchase of air travel using some withdrawn denominations was permitted until the first half of Dec-2016 which may result in a delayed impact in the first half of FY2018. As of now, it is difficult to fully factor in what the impact may be, if any. The introduction of the GST have a short-term negative impact on economic growth for a couple of years until more positive results emerge.

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Based on aircraft deliveries, competitive dynamics and the positive outlook for the economy, domestic growth at 20% or higher could continue for up to a further 2 years.

Domestic International FY2016

21.2%

7.7%

FY2017E

22-23%

9-10%

FY2018F

20-25%

10-12%

Govt Initiatives

In the Union Budget 2017-18, the Civil Aviation Ministry received a substantial increase of over 22% in budgetary allocation at Rs 5,167.60 Cr for the next FY. Some major initiatives undertaken by the govt are: Indian airline companies like Air India, Air Deccan, SpiceJet, Air Odisha and Turbo Megha, have been awarded with the right to fly to 128 routes across India, requiring them to cap half the seats at nearly 50% of the fare, under the GoI’s regional aviation scheme named Ude Desh ka Aam Nagrik UDAN. The GoI has approved the construction of 18 Greenfield airports in the country, which would be executed and financed by the respective airport promoters, and are estimated to require an investment of Rs 30,000 Cr. The CCEA, GoI, has approved the proposal to revive 50 un-served and under-served airstrips in 3 FYs starting from 2017-18 at an estimated cost of Rs 4500 Cr. The GoI has started a new regional connectivity scheme (RCS) called UDAN under which fares will be capped at Rs 2,500 for half the seats in an 1-hour flight, as per the sources. The GoI has also received bids from 11 airlines for the same. IBEF, has stated that the govt plans to double the no of airports in India over the next 2-3 years to cater to the increased passenger traffic due to developing regional air travel market. Aviation Ministry along with AAI plans to develop small airports with frugal facilities, and encourage pvt airlines to bid for routes connecting these small airports with existing larger airports, thereby increasing regional air traffic. AAI plans to increase its capital exp. for 2017-18 by 25% to Rs 2,500 Cr, primarily to expand capacity at 12 airports to accommodate rising air traffic, as per sources. The Ministry of Civil Aviation has revised its air services agreement with Netherlands, which would enable air carriers from both the countries to operate up to 28 flights each week, up from current weekly limit of 21 flights, which would benefit regional carriers as well as enhance connectivity between the countries. The Executive Development Programme of Rajiv Gandhi National Aviation University in collaboration with Indo US-American Cooperation Program, aims to promote skill development of senior leadership and close the gap of increasing demand for trained people in the aviation sector.

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Ude Desh Ka Aam Nagrik

Source: IBEF Sep’17

India is set to become 3rd largest aviation market by 2020. By 2020, passenger traffic at Indian airports is expected to increase to 421 mn from 264.99 mn in 2016-17. Travel, tourism to contribute US$ 423.7 bn to GDP by 2026. Travel, Tourism industry is est. to grow at a CAGR of 6.66% to US$ 423.7 bn in 2026 from US$ 100 bn in 2017. Business, Leisure travel to boost growth. Spending on business travel is est. to increase to US$ 39.88 bn in 2026 from US$ 10.26 bn in 2017, while on leisure travel is exp. to rise to US$ 203.5 bn in 2026 from US$ 181.65 bn in 2017.

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The Union Civil Aviation Ministry has eased several norms of Ude Desh Ka Aam Nagrik (UDAN), a agship regional ying scheme to attract more airlines and helicopter operators to participate in regional connectivity scheme (RCS). The new norms were announced when the process for second round of bidding for the RCS were announced. The winners of the second round of bidding will be announced by Nov’17. The relaxations of the norms include dilution of the exclusivity clause mandating that only one airline may y on one route in the initial years. It will allow selected airline operator of a particular route may issue no-objection certicate (NOC) to other airlines who want to operate on the selected RCS route. The norms restricting two airports in close proximity from participating in the bidding also has been relaxed. It will allow routes with a stage length less than 150 km for operations through xed wing aircraft. The UDAN Scheme aims at providing connectivity to un-served and under served airports of the country through revival of existing airstrips and airports. It aims to develop the regional aviation market and make ying affordable. It is applicable on ights which cover between 200 km and 800 km. The distance limit is lower limit for hilly, remote, island and security sensitive regions. It reserves minimum number of UDAN seats i.e. seats at subsidized rates and also cap the fare for short distance ights. It has a unique market-based model to develop regional connectivity. The civil aviation ministry relaxed the norms for UDAN to allow for greater connectivity. The relaxations include dilution of the exclusivity clause mandating that only one airline may fly on one route in the initial years. The norms that restricted two airports in close proximity from participating in the bidding has also been relaxed. IndiGo has announced that it plans to buy 50 ATR planes, while SpiceJet has also signed an letter of intent to buy 50 Bombardier Q400 regional planes. Air India and SpiceJet have the biggest fleet of regional planes under this scheme. Jet Airways too flies on regional routes but did not participate in the first UDAN round. IndiGo, which is inducting ATR planes from November, is likely to participate in the second round. Inexpensive regional air connectivity under the UDAN scheme would allow travellers to save time and

enable the middle-classes in small-town India to take their first flights. Five airlines including Air India, SpiceJet, Turbo Megha, Air Odisha and Air Deccan were allotted 128 routes to fly in the first round by March, but only 16 routes have been operationalised so far. The eight under-served airports that have been connected in the first round are Gwalior, Kadapa, Pondicherry, Porbandar, Bhatinda, Kandla, Nanded and Shimla. Air Odisha and Air Deccan have not yet taken off. Choubey said the two new airlines will be able to do so by 30 Sep, when the 6 month grace period ends. These airlines are almost starting from scratch, which means they need to seek regulatory licences unlike Air India, SpiceJet which already had operational airline licences. The ministry said the un-served and under-served airports to be connected shortly include Agra, Pathankot, Shillong, Bikaner, Ludhiana, Durgapur, Vidyanagar, Salem, Mysuru, Jamshedpur, Cooch Behar, Kullu, Bhavnagar, Jalgaon, Jamnagar, Kolhapur, Pantnagar, Diu, Nasik, Raigarh and Mundra. The airports that need upgradation to host flights include Kanpur, Jaisalmer, Adampur, Raurkela, Burnpur, Utkela, Jeypore, Jharsuguda, Bilaspur, Ambikapur, Jagdalpur, Mithapur, Neyveli and Solapur. The ministry will require about Rs 300 Cr this year to subsidise the scheme.

Challenges facing India’s civil aviation sector

In 1994, the then GoI repealed the Air Corporations Act, 1953 and replaced it with the Air Corporations (Transfer of Undertaking and Repeal) Act, 1994 thus enabling Pvt CoS to operate scheduled services at domestic locations. This was part of the broader liberalisation reforms that started in 1991. Today, India has the fastest growing domestic aviation market in the world, as per the IATA. India’s domestic air passenger demand grew as compared to the previous year. This growth is 3 times as compared to China’s growth and 5 times as compared to United States growth during the same period. Forecasted growth for India’s domestic traffic is expected to be around 15% for the current year. By all means, India seems to be on a cusp of a civil aviation revolution. Aviation Industry in India holds around 69% of the total share of the airlines traffic in the region of South Asia. This time period, thus, is critical for the industry and requires serious governance and leadership to create global Indian institutions. The finance minister in his budget speech talked about the Govt’ intention of drawing up an action plan for revival of 160 unserved and underserved airports which can be revived at an indicative cost of Rs 50-100 Cr each. While the domestic demand for air travel has increased considerably in the last few years, the Govt has done little to actually help it achieve its true potential. Govt has not reduced the jet fuel prices in proportion to the fall in int’l crude oil prices. Services provided at all Indian airports except the major ones continue to be

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Focus: India’s Civil Aviation Industry far below the global standards. The airport connectivity with the cities is extremely limited. However, no govt’s failure comes even close to its failure in revamping the country’s national carrier, the Air India. Air India continues to bleed losses to the tune of Rs. 3,643 Cr in 2016-17 and operating profit rose to Rs 300 Cr in the same year. Air India’s total debt stood at Rs 48,876.81 crore at the end of Mar’17. There was a time not too long ago when Air India set the global standard for customer service. Now, it seems to have fallen far behind its Middle Eastern and South Asian counterparts in terms of quality services and business excellence. Only about 2% of the Indian population currently travels by air. Airbus, the world’s 2nd largest aircraft-maker, believes India’s civil aviation industry will grow by over 9.5% in the next 20 years while US-headquartered Boeing expects a demand for 1,740 planes in India in the same time period. That’s an opportunity that Air India can’t afford to miss. Expansion of India’s aviation sector also brings with itself no of security challenges including prevention of terrorism. The world watched in horror how Brussels airport was attacked by suicide bombers on in 2016. We can’t allow any such incidents in India. In this context, a report by a dept. related to the Parliamentary Standing Committee on Transport, Tourism and Culture raises deep concerns by suggesting that 27 functional airports in the country are protected by forces other than the CISF. The report said it was “quite scary to know that the security of 8 of our hyper-sensitive and 19 of our sensitive airports are not covered by the CISF that has now become the only specialised force for aviation security”. Report said that “Explanations given to the committee for non-deployment of CISF at remaining airports were lack of funds”. In the present day world where the terrorists are always a step away from creating havoc and taking hundreds of innocent lives, the Govt is best advised to not compromise with the security of Indian citizens and provide the CISF with necessary resources. Last few years have seen a sig. improvement in photography and drone tech. A no of countries around the world are trying to minimise the threats posed by drones by regulating the usage of drone tech. Recently, a person was captured with a small sized drone flying around the Prime Minister’s house. Repetition of such an incidence can’t be tolerated under any circumstances. To this effect a private member bill was introduced earlier aimed to ensure that advancement in photography and drone tech doesn’t make our skies more vulnerable. The no of drones is only going to rise in future and there is an urgent need for the Govt to bring a pre-emptive legislation to ensure the safety of our skies. To summarise, triggered by the reforms that started almost 2 decades back, India’s civil aviation sector is ready to become one of the largest 78

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in the world. While opportunities are immense, the vulnerability of our skies has also grown manifolds. The Govt needs to come up with a comprehensive policy in the civil aviation sector which not only ensures that Indian civil aviation CoS are able to become world leaders but also that they are able to offer safe and convenient travel to customers at competitive prices. International traffic is expected to expand at 10-12% in FY’17,18, but bilateral restrictions preclude achieving true potential. Most of the 10 largest international carriers are achieving year-round average load factors of 90% or higher, indicating constrained capacity. Without India’s unhelpful restrictions, international growth could be in the region of 15-17% per annum which would result in international traffic volumes doubling within 5 years. Several Gulf and Asian carriers are seeking additional entitlements to the tune of up to 150,000 weekly seats. Bilaterals have become a key issue in India’s geo-political relations with markets such as the UAE, Qatar, Turkey, Hong Kong, Singapore and Malaysia. The Indian govt may only agree to more modest incremental expansion in seats than is being sought by some countries. Lessor confidence in the Indian market is returning but is not completely restored. Lessor interest in the Indian market is returning as memories of the aircraft recovery challenges experienced following the collapse of Kingfisher start to fade. The strong turnaround by SpiceJet in the last two years have also helped to restore confidence in the market.. However, recent regulatory hurdles which have stalled the implementation of the Cape Town Convention in the Indian civil aviation code, despite India being a signatory to the agreement, could impact the country’s risk rating. Skills shortages are emerging with airlines facing particular challenges in recruiting sufficient commanders. This is already impacting expansion plans. Meanwhile institutional and regulatory framework at the DGCA and the Bureau of Civil Aviation Security, is particularly weak and under-resourced. And these issues do not appear to be receiving the urgent attention that they require. Capacity constraints at India’s metro airports have already become visible. The situation at key metros like Mumbai, Chennai is particularly acute as these airports are fast approaching saturation. But slot constraints and congestion are an issue at most of the metro airports and are expected to remain so for the near term as new terminals and runways will take 2-3 years to develop. Delays in developing a long term national airport plan could jeopardise economic growth. Based on projected growth rates, most of the 40 largest airports in the country will exceed their design capacities within the next decade. However, it is a serious concern that there is no long term vision for India’s airport capacity requirements. There will vast economic

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ramifications if air connectivity to India’s centres of commerce, industry and tourism is choked off due to airports being saturated. Development of airports of national importance have been subject to lengthy delays. Financial bids for Navi Mumbai could again be delayed beyond 09-Jan-2017. There is a need to accelerate the award of greenfield airport concessions, many of which; such as Navi Mumbai; have been subject to inordinate delays. In fact, the Navi Mumbai tender could potentially be subject to more delays. And commissioning of the new airport could take a further 5-7 years. The award of the concession for Goa Mopa in Aug-2016 broke a recent drought in privatisation of airports. Nagpur MIHAN and Bhogapuram, could be the next to be decided, with more opportunities expected from next year. Precious capital for airport development needs to be well-directed towards viable projects. Airport development needs to be pursued with viability considerations in mind. India’s most recently constructed greenfield airport at Durgapur in WB, built with 100% private capital, has struggled to attract commercial airline operators. Air India briefly served the airport but has since suspended services due to insufficient demand. Reliance’s invest. in regional airports in Maharashtra, IL&FS’s interest in projects in Karnataka have similarly failed to perform. The tender process which awards concession to the bidder offering the highest revenue share needs to be reviewed. The current evaluation criteria of bids which favours aggressive revenue shares is not helpful to airport devlopment, ultimately results in higher charges for airlines, consumers, deters investors and serves only to subsidise losses at AAI airports. The domestic aviation sector is projected to employ nearly 4 mn people in two decades, driven by improved economic activities and labour productivity, says a study instituted by the Civil Aviation Ministry. While emphasising the need for having skill development programmes across various levels in the sector, the study has suggested setting up of the National Civil Aviation Training Entity (NCATE). The study, done by ICRA Management Consultancy Services Ltd (IMaCS), comes at a time when the ministry is in advanced stages of finalising the civil aviation policy. It estimate indicates that by 2035, the Indian civil aviation sector {across the study segments of airport, airlines, cargo, MRO (Maintenance, Repair and Overhaul) and ground handling} will employ 0.8 to 1 mn personnel directly and another 3 mn indirectly (for 1 direct job about 3.5 indirect jobs are created), the report said. The projection has been made after taking into account the likely improvements in economic output and labour productivity. For the direct employment opportunities estimated, the airlines segment contributes the maximum share of ||www.constructionmirror.com/net||

32% followed by cargo at about 25%, airport at 23% (which also includes contractual staff), ground handling about 17% and MRO about 3%,” it noted.

Road Ahead and Opportunities

India’s aviation industry is largely untapped with huge growth opportunities, considering that air transport is still expensive for majority of the country’s population, of which nearly 40% is the upwardly mobile middle class. The industry stakeholders should engage and collaborate with policy makers to implement efficient and rational decisions that would boost India’s civil aviation industry. With the right policies and relentless focus on quality, cost and passenger interest, India would be well placed to achieve its vision of becoming the 3rd largest aviation market by 2026. ANS Corporatisation is a necessary structural change. More than a cosmetic hiving-off is needed. Airspace is another potential choke-point on the supply side. If this sector is to receive the management attention and capital that it needs to keep pace with projected growth, the air navigations services division of the Airports Authority of India needs to be hived-off as a separate entity and corporatised. After a couple of false starts, signs are emerging that this could be back on the agenda. India’s New Civil Aviation Policy could prove to be a hindrance to the development of the sector unless there is an urgent review. The New Civil Aviation Policy (NCAP) announced in Jun-2016 was a document almost 20 years in the making. This is the first time that India has had a single document vision for the aviation sector and that is a welcome development. But design flaws in the policy, particularly with respect to regional connectivity, ground handling and bilateral policy, mean that it will be difficult to implement in practice and could inadvertently act as an obstacle to achieving desired objectives. The NCAP requires a thorough review to ensure that India has a policy that will deliver the aviation sector that it needs. Because of the weaknesses in the policy, little has changed on the ground since it was released. Furthermore, several issues that are fundamental to the long-term sustainability of the sector have been ignored, namely strengthening and restructuring of the DGCA and BCAS, and developing a viable business plan for Air India and the Airports Authority of India, both of which continue to operate sub-optimally. The Ministry of Civil Aviation deserves significant recognition for actively consulting and engaging with the industry, which is starting to yield results. The Ministry deserves significant recognition for actively consulting with industry stakeholders on a regular and positive basis to identify and address issues. The strategy of engagement and taking accountability is highly welcome and demonstrates a commitment to listening to problems and developing solutions. A new direction for the future of Air India could be a surprise development, possibly before 2019, as there is no prospect of sustainable profitabilitys under government ownership. After its first operating profit in 10 years in FY2016, Air India is again headed for an operating loss in FY2018. The current administration is showing signs of reluctance to continually fund losses and CAPA does not rule out a significant decision on the future of the national carrier. There may finally be political appetite for a meaningful

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restructuring, including privatisation, before 2019. Taxation and levies are likely to increase cost pressures for India’s airlines. The implementation of GST resulted for atleast shortterm higher upfront costs for aircraft and leases, spares and parts, and distribution costs, increasing cash flow requirements, although airlines will receive input tax credits later. Currently India is 9th largest civil aviation market. Total passenger traffic stood at 224 mn during 2016. India is expected to have 60 mn international passengers by 2017. 81 international airlines connecting over 40 countries. India is projected to be the 3rd largest aviation market by 2020. Indian carriers are expected to have possessions of 800 aircrafts by 2020. Total passenger traffic stood at 224 mn during 2016. India is one of the least penetrated air markets in the world with 0.04 trips per capita per annum as compared to 0.3 in China and more than 2 in the USA. Indian carriers plan to increase their fleet size to reach 800 aircraft by 2020. The Indian aviation sector is likely to see investments totalling USD 15 bn during 2016-2020 of which USD 10 bn is expected to come from the private sector. Domestic Passenger traffic CAGR 10.1% (FY 2006-16). International Passenger traffic CAGR 8.8% (FY 2006-16). Total freight compared to International air freight traffic CAGR in Domestic Sector 7.6% (FY 2006-16) and in International Sector 4.8% (FY 2006-16). India has more than 86 scheduled international airlines constituted of 5 Indian carriers and 81 Foreign carriers. Currently India has air connectivity with 55 countries through more than 300 routes.Passenger traffic is growing at 20% per annum in the last 2 years. Five international airports (Delhi, Mumbai, Cochin, Hyderabad, Bengaluru) have been completed and are operational under PPP mode. Greenfield airport at Navi Mumbai, Mopa (Goa) and some brownfield airports of AAI and 50 airports under the no-frills model planned to be developed all over the country of which same would be executed under the PPP model. Indian aviation is experiencing dramatic growth which includes the emergence of Low Cost Carriers (LCC) / new carriers to a growing middle-class ready to travel by air as well as growth in business and leisure travel. Greater focus on infra development; increasing liberalisation; Open Sky Policy; AAI driving modernisation of airports, Air and Navigation Systems. Growth in aviation is also increasing demand for MRO facilities. India is home to large scale collaborations/ Merger & Acquisitions (M&A) deals Etihad Airways & Jet Airways, Tata Group & Singapore Airlines, Tata Group & AirAsia. India plans to increase the no of operational airports to 250 by the year 2020. The extant FDI policy on Airports permits 100% FDI under automatic route in Greenfield Projects and 74% FDI in Brownfield Projects under automatic route. FDI beyond 74% for Brownfield Projects is under govt route. With a view to aid in modernization of the existing airports to establish a high standard and help ease the pressure on the existing airports, it has been decided to permit 100% FDI under automatic route in Brownfield Airport projects. As per the present FDI policy, foreign investment up to 49% is allowed under automatic route in Scheduled Air Transport Service/ Domestic Scheduled Passenger Airline and regional Air Transport Service.

FDI beyond 49% is allowed through govt approval. For NRIs, 100% FDI will continue to be allowed under automatic route. However, foreign airlines would continue to be allowed to invest in capital of Indian Cos operating scheduled, non-scheduled air-transport services up to the limit of 49% of their paid up capital and subject to the laid down conditions in the existing policy. Up to 100% FDI is permitted in Non-scheduled air transport services under the automatic route. Up to 100% FDI is permitted in helicopter services and seaplanes under the automatic route. Up to 100% FDI is permitted in MRO for maintenance, repair org’s; flying training institutes; and technical training institutes under the automatic route. Up to 100% FDI is permitted in Ground Handling Services subject to sectoral regulations, security clearance under automatic route. Investments are subject to relevant regulations, approvals from DGCA and security and other conditions. AAI is responsible for developing, financing, operating, and maintaining all public sector airports. New airports are permitted under the Greenfield Airport Policy 2008. Investment in airports is encouraged under the PPP Policy of the GoI. Regional Air Connectivity Policy offers attractive incentives in the form of exemption of landing, parking and navigation fees to airlines operating at designated airports in non-metro areas. Aircraft engines and parts thereof are eligible for duty exemption when imported for servicing, repair or maintenance of aircraft used for scheduled operations. The budget envisages the development of new airports in Tier II and Tier III cities. The Income Tax Act provides presumptive taxation under Section 44AE in respect of assesses who are engaged in the business of plying, hiring or leasing goods carriages. The bill proposes to increase the amount of presumptive income to USD 112 per vehicle for all types of goods carriage vehicles. Exemptions under the Income Tax Act for infra development under section 80 IA. Basic customs duty exemption is available for parts and testing equipment used for the maintenance, repair and overhaul of aircraft. Budgetary support is provided to the AAI for the dev of airport infra in the North-eastern states of India. With the Govt’s initiaties like ‘Make in India’, Udan, FDI policy over 300 business jets, 300 small aircraft and 250 helicopters are expected to be added to the current fleet of Indian carriers in the next 5 years. Demand for MRO facilities is increasing in India, due to growth in the aviation sector. Investment opportunities worth USD 3 bn in greenfield airports under PPP at Navi Mumbai and Mopa (Goa). The development of new airports the AAI aims to bring around 250 airports under operation across the country by 2020.

For development of aviation in the North-east region the AAI plans to develop Guwahati as an inter-regional hub and Agartala, Imphal and Dibrugarh as intraregional hubs. AAI has planned to spend USD 3 bn on non-metro projects between 2016 and 2020, focusing on the modernisation and up-gradation of airports. Indian airports are emulating the SEZ Aerotropolis model to enhance revenues, focus on revenues from retail, advertising and vehicle parking, security equipment and services.

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INTERVIEW

Y. Srinivas Reddy Managing Director

Bevcon Wayors Pvt. Ltd.

At BEVCON execution excellence is paramount which will be achieved by enrolling of all critical stakeholdersâ&#x20AC;&#x2122; customers, consultants, suppliers and internal teams to deliver the right results, right time and most cost effectively. We have demonstrated consistently for the last two decades of existence in bulk material handling business.

Mr. Reddy is the first generation entrepreneur who started the business at the young age of 25 years in 1990 with clear conviction of “People and Process” makes the difference to the organizations growth. Under his leadership of more than two decades, Bevcon achieved rapid growth and delivered enterprises class engineering solutions to Global 2800 Customers. His fervor for design engineering has lead to numerous innovations in Bevcon’s Range of products while ensuring high quality, faster turnaround times and consistently growing its top line from the inception. Mr. Reddy is an associate Member of “American Management Association” and served as the president and chairman of Uppal Industrial association and municipality respectively from 2010-2013. Mr. Reddy has been honored & awarded with “Most Promising Entrepreneurship Award 2014” by Asia Pacific Entrepreneurship Award committee and also Winner of “SME 100 Award 2014“ by India SME Forum and also winner of “National MSME Excellence Award 2016” in the category of “Medium Scale Sector for Innovation in Engineering & Manufacturing of Bulk Material Handling Projects & Products by FITS(Federation of Industry Trade and Services) in association with MSME. To live life more purposefully give meaning to the existence Mr. Reddy began new role of ‘social entrepreneur‘ promoted “IBeam Foundation” social entrepreneurship not-for-profit Organization in the year of 2011 and supports various NGO’s who are in the field of Uplift meant of underprivileged children. As part of organization CSIR program initiated new programs of “Imagination to Impact - i2i” to bring awareness among the working groups about their social responsibilities encourages them to involve in the programs. He holds a bachelor’s degree in mechanical engineering from JNTU, Hyderabad. Mr. Y. Srinivas Reddy Strongly believes in

The Powerful Motivator in Life isn’t Money... • • • •

It’s opportunity to learn, Grow in responsibilities, Contribute to others and Be recognized for achievements.

Brief us about the BEVCON WAYORS PVT. LTD. and its success story?

Bevcon Wayors is two decades old organization and one among the leading Material Handling Projects and Equipment engineering and manufacturing firm based in Hyderabad with pan India presence. We provides concept to commissioning solutions and execute turnkey / EPC projects for all material handling applications for all industry segments such as Thermal Power, Steel, Cement, Sugar, Mining, Pharma & Chemical, Paper, Port, Food, Fertilizers, Aggregate Sectors etc. and establish ourselves as a reliable Brand in Bulk Material Handling industry. Our product basket range covers almost all equipment and as well turnkey project solutions to all material handling applications to meet the expectations of client needs. At BEVCON execution excellence is paramount which will be achieved by enrolling of all critical stakeholders’ customers, consultants, suppliers and internal teams to deliver the right results, right time and most cost effectively. We have demonstrated consistently for the last two decades of existence in bulk material handling business. Execution of many first of its kind projects like TATAT Steel - 90O Steep Angle Conveyor for conveying 2X500TPH Petcoke from wagon unloading area to storage silo, JK Cement - 90O High / Steep Angle Conveyor for conveying 1650TPH Clinker from Wagon unloading area to storage area, Shree Cement - Pipe Conveyor for conveying 3190TPH Limestone from Mine to process plant with 1.4Kms conveying length etc., are few testimony of BEVCON strengths. BEVCON strongly believes in Core Values - iTREAT (Innovation, Trust, Empowerment, Attitude and Transparency) which are truly reflected in every aspect of business existence and more importantly financial discipline adopted is more sustainable in critical times of recessions. We have two clear business verticals in the organization they are EPC Projects & Material Handling Equipment with exclusive teams from engineering to execution for each verticals. • EPCM(Engineering, Procurement, Construction and Project Management) – Projects Bevcon specialized in execution of projects from concept to commissioning in the segments of Power, Steel, Cement, Sugar, Paper, Pharma, Process, Aggregate, Ports, Fertilizer, Mining of Coal, Iron Ore, and various other ore extraction and handling, also experienced in executing projects around the world (exports). Bevcon executes project with blend of latest technology with conventional systems in most optimized manner which will enhance the operations reliability. • PMG(Product Management Group) – Equipment

Feeding Equipment:

Screening Equipment:

Crushing Equipment:

Conveyor Components:

• Idlers | Pulleys | Dust Hoods | Accessories

Overland Conveying System:

• Overland Troughed Conveyors | Overland Pipe Conveyors

Vertical Conveying System:

• Sidewall Cleated Belt Conveyors | Sandwich Belts High Angle Conveyors

Ash Handling System:

• Pneumatic Ash Handling Systems | Mechanical Ash Handling Systems

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INTERVIEW Other Material Handling Equipment:

Dust Extraction Equipment & Systems | Screw Conveyors | Ash Conditioners | Rotary Airlock Valves | Belt Conveyors | Roller Conveyors | Bucket Elevators (Chain / Belt) | Drag / En-mass Chain Conveyors | Submerged Chain & Belt Conveyors Bevcon Corporate Office & Manufacturing Unit located in IDA, Cherlapally, Hyderabad is an accredited of Integrated Management System consists of ISO 9001: 2008, ISO 14001:2004 & OSHAS 18001:2007. It is spread over 25,000 square feet with CNC machinery aided by CAD / CAM Software. It’s the manufacturing hub for Crushers, Screens Feeders and other Material Handling Equipment. As part of its expansion, Bevcon’s new manufacturing facility is slated to come up at outskirts of Hyderabad, which will cater to the needs of heavy fabrication and engineering Products. Be’RolleX, a Subsidiary Unit of Bevcon at Sricity – Andhra Pradesh, is a fully automated manufacturing plant spread over 1,00,000 square feet to manufacture Idlers & Pulleys, meeting international quality standards and will strengthen the organization’s manufacturing capability to cater to the global clientele. Regional Network: Bevcon in addition to their office at Hyderabad has a pan Indian presence with offices located at New Delhi, Kolkata and Pune with teams consisting of sales and service personnel to deliver prompt services to the satisfaction of its clients. All the offices are totally networked and integrated with latest communication facilities to interact with all the stake holders seamlessly. Manufacturing Vendor Network: Bevcon’s business model of manufacturing is flexible and expandable based on the market demands. With its two decades of existence in the material handling industry, BEVCON has established strong vendor network across India to deliver qualitative, cost-effective and timely commitments to all esteemed clients.

place • Most importantly fitting the COST within the budgets has become very critical factor • Delayed payment realizations • Overall project performance /warranty terms have become very stringent • Global business dynamics impact on the projects viability’s etc., Current times over all risks are very high in EPC nature of projects. In view of above Bevcon is very conservative in their approach in participating in EPC nature of projects unless risk is totally evaluated and also understanding inherent strengths of engineering, procurement and construction teams and possibility’s we can create in value innovation, speed and cost control are one of the focused areas of BEVCON in EPC projects domain.

What according to you are yours key factors in material handling products? We always ensure following aspects for every sale goes through which will create a goodwill and confidence to our customers. • Equipment are reliable and efficient in operation • Best in quality -manufactured under In-house IME – Integrated Management System (ISO 9001:2015, ISO 14001:2004, OHSAS 18001:2007) certified manufacturing unit • Cost effective • Best in service • Innovative features in the product • Low maintenance/low down time • Low wear costs • Lowest product life cycle cost • Technology transfer from collaborations • Customized product development to meet the client’s needs

EPC industry is growing rapidly what Q. What are the opportunities and challenges yours take on thisindustry; kindly share your you facing in terms of infrastructure today, plans for this sector? as changing in market trends? While we agree that EPC is growing rapidly in current turbulent timesbutalso its carrying serious pain points of growth….the challenges EPC players arecurrently going through in this domain are: • Liquidity • Project take off time are very high • Delay in project execution • Financial support from the institutions is not to the expectations • Speedy statutory clearances are not taking 82

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We are highly optimistic about prospective growth in Mining, Power and Infrastructure areas which will open up huge demand for material handling projects developers. In my view critical growth drivers for the MH segment to grow is: • Material handling comes under infrastructure segment unless there is sign of growth in this domain which is critical for Country GDP growth.

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• Fast track clearances for the projects by the respected governmental agencies. • Financial institution supports. • Governmental developmental policy’s like privatizing / auctioning mining sectors etc. • Technology up-gradation keeping in mind environmental and energy conservation. • Cost optimization / value creation. • Shorter project time cycle etc., • About challenges; they are numerous like any business. • Major one is high competition and low profitability & cash flows. • Time and cost run over of the projects due to delays. • Shortfall of talent and infrastructure. • High financial cost etc.,

Q. What are the current market trends in terms of value for bulk handling equipment for mining sector?

Indian infrastructure growth is currently going through highly challenging times being bulk material handling sector is part of infrastructure, the impact is very high on it, core sectors like mining, steel and power industries are going through rough weathers. It’s all depends on how over all GDP growth and as well as financial institutions and governments way forward policies are determining factors for bulk material handling growth in mining sector.

Q. Please share your upcoming international

projects and plans and other projects that you are catering into? For international market too we provide complete turnkey bulk material handling applications; for example raw material handling systems for steel plants and cement plants, fuel (coal/coke/lignite) handling systems for coal and biomass based power plants, In-plant Material Handling Systems, Ferro alloy plants, Sugar handling system, Fertilizer, Agriculture & Lime coke handling systems etc. Few on-going international projects are Coal and alternate fuel handling system for Bio-Mass Power Plant - Indonesia, Woodchip Handling System Srilanka, Sugar Grader & Handling system - Zambia and Coal and Ash Handling System - Dubai.

Q. What are the latest technology / product

trend in bulk handling equipment especially for mining sector offered by Bevcon? Please explain its features in? ||www.constructionmirror.com/net||

Technological innovation is life line for Bevcon. We always strive to bring best technologies to India with most cost optimized manner and in the end our customers will have winning edge in their processes and business. Bevcon executes project with blend of latest technology with conventional systems in most optimized manner which will enhance the operations reliability. Bevcon core strength lies in use of Innovative Conveying Systems and Equipment which caters present day demands of Indian mining sector. Our highly competent technical team supported by technology partners from US and Europe are in position of supplying the Innovative equipment’s like:

Sandwich Belt High Angle Conveyor

for vertical conveying application which is revolutionary concept; Bevcon’s technology tie-up with M/s. Dos Santos intl. USA, who are world’s foremost authority on high angle conveyor applications and design of sandwich belt type high angle conveyors for Open Pit Mine & In-pit Crushing Conveying, which is breakthrough concept of conveying any mineral from pit bottom to the surface by totally eliminating use of conventional trucks. It also minimizes the environmental degradation; flexibility of conveying profiles makes it one of the unique materials handling equipment of current generation and brings down the operational cost drastically and enhances productivity by retaining product quality. Its unique concept ever tried in Indian mining industry. These high angle conveyors are not new at all, but have not found wide use in IPCC systems where they can realize the greatest advantage.

Overland Pipe Conveyor

Modern & environmentally friendly Overland Pipe Conveyor system overcomes numerous challenges

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associated with conventional conveyor systems. Pipe Conveyors have best capabilities of transferring materials between two points managing both horizontal and vertical curves which are difficult in case of trough conveyors. It eliminates multiple transfer points and exposure of material to atmosphere.-

Overland Troughed Conveyor

Overland troughed belt conveyors are designed to carry high tonnage loads over long distances. Bevcon’s long distance conveyor design ensures lowest power consumption per ton of conveying. Overland belt Conveyors have been proven to be an efficient method of transporting bulk material over long distances and costs are often lower than with truck transportation.

Stockyard System:

Bevcon brings the vast experience of their technology partner M/s. FMK, Poland, in design and development of wide range of stockyard Equipment like stacker, reclaimer, stacker cum reclaimers, full & semi-portal scrapper reclaimer, Side Scraper and belt conveyor system for maximizing the space utilization to meet the expectations of project.

Flip Flow Screen

Introduction of high efficient “Flip-Flow Screens” for screening of very high moisture materials more specifically “Coal” has changed the philosophy of conventional screening methods in power & mining sector. India coal is most sought after fuel for thermal power units and most of the time either coal will be imported or mined from open cast mines and stored in open areas leading to high moisture absorption. The high moisture levels in the coal will be crushed and screened before it goes for boiler firing the challenge lies in screening “high moisture coal” conventional

screening methods used will not able to productive and meet the demands of the plant. Introduction of Flip Flow Screen has ability to screen coal with moisture of 40% and efficient enough to the levels of 90% screening. • Idlers &Pulleys: Be’RolleX manufactures Idlers and Pulleys to meet underground coal mine safety and operating standards. Be’RolleX, a Subsidiary Unit of Bevcon established at Sricity in Andhra Pradesh, India. Salient feature of this manufacturing plant is that, it’s a fully automated manufacturing plant spread over 1,00,000 square feet to manufactures extensive range of Idlers and Pulleys meeting Indian and international standards. It operates with the state-of-the-art technologies viz., automated robotics to ensure reliability and consistency of quality in Idlers and Pulleys manufacturing. Be’RolleX in-house testing facilities allow for continual product monitoring, meeting every customer demand as promised. • Types of Idlers: Transition Idler | Carrying Idler | Impact Idler | Self-Aligning Carrying Idler | Return Flat Idler | Self-Aligning Return Flat Idler | Self-Aligning “V” Return Idler | Return Disc Idler | Garland Idler • Types of Idlers Brackets / Frames: Carrying/Impact/Transition Idlers Frame | Self-Aligning Carrying Idlers Frame | Return Flat Idler Frame | Self-Aligning Return Flat Idler Frame | “V” Return Idler Frame | Idler Frame in Pipe construction | Retractable Idler Frame | Trough Angle Adjustable Brackets | Garland Idler Attachments. • Types of Pulleys: Welded hub disc | Turbine hub disc | T-Bottom type disc

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Focus: Smart Digital Solutions in Mining Industry

Future of Smart Digital Solutions in Mining Industry

n 2016, India stood as the 3rd largest crude steel producer in the world, while the total crude steel production was 88 MT. India accounted for 5.89% of the total steel production in the world in the year 2016. India is 3rd largest producer of crude steel in the Asia-Pacific region in 2015. Total finished steel production (alloy+non-alloy) in India reached 83.01 MTs in FY’17. In FY’16, offshore region accounted for 20.20% share in India’s share of states in value of mineral production. In 2015, India had the 5th largest coal proved reserves globally, of which 92.6% was Anthracite and Bituminous while 7.4% was Sub Bituminous and Lignite. In 2016, India contributed around 11% of the world’s production of coal. CIL is the world’s largest coal Co. based on raw coal production and coal reserves.

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arket Size

India holds a fair advantage in cost of production, conversion costs in steel, alumina. Its strategic location enables convenient exports to develop as well as the fast-developing Asian markets. India currently produces around 95 minerals which mainly include 10 metallic, 23 non-metallic, 3 atomic, 4 fuel and 55 minor minerals. Rise in Infra development and automotive production are driving growth in the sector. Power, cement industries are also aiding growth in the metals and mining sector. Demand for iron and steel is set to continue, given the strong growth expectations for the residential and commercial building industry. India is the 3rd largest producer of coal. Coal production stood at 453.10 MTs in FY’17. India has the 5th largest estimated coal reserves in the world, standing at 308.802 BTs in FY’16. In 2016, India contributed around 11% of the world’s production of coal. India ranks 4th in terms of iron ore production globally. In FY’17, production was expected to reach 175.51 MTs of iron ore. India has around 8% of world’s deposits of iron ore. India has become the 3rd largest steel producer in FY’17 with the production of finished steel at 83.01 MTs. India stood as the 3rd largest crude steel producer in 2016, while its production increased to 90 MTs in FY’16 as compared to 88 MTs in FY15. India accounted for 5.89% of the total steel production in the year 2016. According to Ministry of Mines, India has the 7th largest bauxite reserves around 2,908.85 MTs in FY’17. Aluminium production stood at 1.7 MMTsin FY’17. India has vast mineral potential with mining leases granted for longer durations of 20-30 years. There is sig. scope for new mining capacities in iron ore, bauxite and coal and considerable opportunities for future discoveries of sub-surface deposits. The Ministry of Steel aims to increase the steel production capacity to 142.3 MTs by the end of 2017 indicating new opportunities in the sector. In Feb’17, the country’s coal ministry allowed private CoS to engage into mining activities for commercial purposes. Infra projects continue to provide lucrative business opportunities for steel, zinc and aluminium producers. India’s Infra sector is expected to grow at a CAGR of 35.65% over the period FY 2008-25. In the Union Budget 2017-18, the GoI has allocated US$ 62.16 bn for Infra. Iron and steel make up a core component of the real estate sector. Demand for these metals is set to continue given strong growth expectations for the residential and commercial building industry. Total housing shortage in the country stood at about 18.78 mn at the start of the 12th FYP. This provides a big investment opportunity

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for residential building construction in coming years.

The Digitization

Terms such as digitalization, digital transformation and analytics, when used without clear definition, can lead to confusion within an organization, and, in turn, can result in misguided and poorly scoped projects. “digital” (and variants thereof) or the process of moving to “digital mining” is “the use of electronic tools, systems, devices and resources that generate, store or process data to change a business model and provide new revenue and valueproducing opportunities; it is the process of moving to a digital business. Digital is not an alien topic for the mining fraternity and we are building employee awareness on the issue. There exists a wider scope for integration of mining operations, including exploration, ore extraction and processing, in comparison to business and technical support processes, which have already advanced. There are varied opinions on the hindrances in moving to “digital mine”. While some find technological capability and cost as prime issues, other believe business case clarity and cyber risk are limiting digitalization. Sensor tech, integrated data platforms, big data and advanced analytics have significant potential for application. Asset management and maintenance, productivity, supply chain integration and safety are the future of tech adoption. Both the public, private sector players are generally aware of digital enablement and how it can enhance productivity. Several respondents are confident that they have skilled manpower to undertake this journey. While the IT budget ranges from 0.5-1.5% of revenue, the industry is looking to adopt digital, to start with, in the entire supply chain, with prime focus on monitoring and improving operational performance Productivity and cost. There are varied opinions on the hindrances in moving to Industry 4.0. While some find technological capability and cost as prime issues, other believe business case clarity is limiting digitalization. For example, a global tech provider believes that in the metals industry, the risk to lose control over a production plant is too high to trust every leading-edge tech. Hence, only matured IT systems such as ERP, CRM and business analytics systems are being hosted on cloud as compared to other solutions (MES, SCADA etc.) in the production process. The industry is unanimously of the opinion that the biggest impact of digital tech will be in the areas of supply chain, enhanced safety and security and improved customer service. The industry has a very balanced view on cyber security, agreeing that not every IT/OT tech compromises security and

privacy and it all depends on the layers of security provided by the tech supplier. Yard management and product tagging has found low adoption in the industry and this could be an opportunity area for improvement in terms of reducing the turnaround time. The industry as yet primarily follows preventive maintenance for assets rather than real-time data from sensor tech. The critical parameters for maintenance are recorded manually and decisions are based on experience and not predictive analysis. In terms of people and culture, several organizations believe they have the required manpower present and properly trained, while a few believe that it is difficult to find functional talent. A globally leading tech solutions provider to the metal industry stated that every metal producer has to find its own way of adoption; it must be an evolution. Use of data will be attractive and may not need change of equipment to start with.

The transformation

Low commodity pricing, maturing mines and growing need to maintain competitiveness have shifted the average miner’s focus from targeting volume growth to achieving cost reduction and productivity growth. While miners continue to implement measures to drive productivity, the key to reinvention lies in the digital transformation of the industry. Digital is not just about incorporating a gamut of technologies but is an approach to run business processes more effectively and increase value. There however exists a major digital disconnect in the mining and metals sector, which is the gap between the potential from digital transformation and the poor track record of successful implementations. The digital disconnect exists, not because of a lack of engagement from the sector, but because of a range of practical issues that continue to challenge the industry. This paper, largely written from the operator’s perspective, expands on the potential benefits of digital to help exploit the number one operational opportunity in mining productivity. Also explores common pitfalls, which include lack of practical pathways to an aligned vision, unclear accountabilities and poorly defined digital business models. Understanding these pitfalls will help answer question.

The evolution

Digital mining is not new; it has been with us for over half a century. Over the last few decades, the mining sector has embraced the introduction of new technologies, such as mainframe and personal computing, processing plant control systems, Despatch, Global Positioning Systems (GPS), mobile broadband, cheap sensors and data storage, through to cloud computing. Significant

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Focus: Smart Digital Solutions in Mining Industry

benefits have already been realized from digital mining, including: Crowdsourcing: The introduction of global brainstorming to mining enabled cost reduction while speeding up the data sifting process to identify possible greenfield deposits. Simulation modeling: This has underpinned the decision-making for Australia’s multi-bn dollar iron ore and coal expansions since the early 2000s. Mine monitoring and control systems: Better results have been achieved through remote operations centers that allow CoS to monitor activities happening hundreds of miles away via satellite link. BHP Billiton is testing the use of sensors that could increase the grade of copper being sent to its processing plants by up to 10% and offset the need for costly plant expansions. Goldcorp has deployed CISCO’s “Connected Mine” solution at its Éléonore mine to track people and equipment at all times to improve the efficiency of its operations. Waves of digital transformation since 1950 •

Digital Computing

•

Mathmetical Optimization and Simulation Techniques

•

Process Control

•

Global Positioning System

•

Fleet Management System

•

Advanced Process Control

•

DES Application

The pathway •

Automated Hautage

•

Automated Drill System

•

Asset Health Monitiring

•

Advanced Simulation and Optimization tools

•

Visulisation of Integrated Actionable Information

•

Predictive Analytics

Source: EY and Graham Walker, Consultant, Productivity and Value Chain

In the digital world, the desired end state for mining and metals CoS has been generally accepted. This future is characterized as one where decision-makers 86

(either human/ automated) rapidly optimize decisions to maximize some objectives (e.g., cash flow, NPV) through the efficient use of resources (e.g., ore body, assets, labor), subject to some constraints (e.g., market, regulatory, ethical). This decision-making process strives to make the most effective decisions through the most efficient use of the available resources. Various aspects of this vision are already playing out in differing degrees of aspiration and scale. These developments are maturing in parallel with an increase in commentary highlighting the opportunities offered by analytics, big data, Internet of Things and machine learning terms that are used liberally and often with little definition. Against this backdrop, the mining and metals CoS are looking for a sober assessment of genuine potential from digital transformation along with the implementation pathways, which take advantage of the opportunities while avoiding common pitfalls.

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Productivity remains the number one operational risk in the mining sector particularly in the bulk commodities. Despite recent improvements in cost reduction and labor productivity, asset productivity continues to lag, and this is the next area miners need to focus on. To address the productivity gap, miners need to focus on improving the management of variability in their organization. The manufacturing industry is the best example of a sector recognized as a leader in asset productivity as measured by

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overall equipment efficiency (OEE). By adopting a manufacturing mindset, miners can better manage variability and hence improve productivity. Possibly, there are 3 key elements to this: Digital alignment to the productivity agenda (digital as the enabler). A market-to-mine approach to the business (end-to-end). Leadership and culture to support elimination of loss (zero-loss focus culture) Digital can enable new ways to drive productivity, manage the variability challenges of the sector and pursue commercial excellence. For instance, Barrick Gold teamed up with Cisco for a “digital reinvention” of its mining business in order to improve productivity and reduce costs. The initiative will help the gold miner meet its target of reducing its all-in sustaining costs to below US$700/oz of gold by 2019. Some examples of what mining and metals CoS can achieve with the right focus on digital include: Optimizing plans and productivity rates across any operation and managing variability under any conditions: Digital will enable this through combining detailed ore body data with equipment operational and maintenance data, in a real-time environment, to produce alternative operating plans and the ability to refine these plans for variability. Enhancing asset availability and reliability: A move to digitally enabled predictive maintenance would allow for the extension of maintenance windows, reduced component and labor costs, and the minimization of costly breakdown events. Further, once the effective maintenance practices are standardized, the ||www.constructionmirror.com/net||

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Focus: Smart Digital Solutions in Mining Industry

introduction of robotic process automation (RPA) and schedule optimization tools is possible. Understanding true end-to-end capability and systems bottlenecks, and supporting loss elimination: This is fundamental to the manufacturing mindset. Increasing agility and responsiveness to changes in market factors, such as demand, freight rates and customers’ buying behavior trends: This would optimize shipping and scheduling to reduce demurrage, maximize rail and port utilization, and also enable miners to capture spot markets and price premiums via sales contracted at different points of the value chain.

The digital disconnect

The challenges

Notwithstanding the long journey that digital mining has already taken in many parts of the world, the rate of recent development seems incongruous with the perceived opportunity. Tech suppliers are rushing to grab their share from traditional mine services. Although mining equipment makers have invested substantial capital in tech, they might need to escalate capabilities to go beyond heavy equipment. For instance, Microsoft’s HoloLens virtual reality solution enables users to view, control and interact with 3D content using their hands and voice. This could transform the way mining professionals communicate and collaborate, for example, evaluating virtual mine designs or stopes without physically being there. Goldcorp has been working to implement possible applications of virtual and augmented reality (VAR) tech at its mine sites.8 So the big question is if the benefits truly are so large and game-changing, why are the many established technological implementations not delivering on their full potential? Some of the common pitfalls driving this disconnect are: Lack of detail on the implementation pathway Even where there is consensus between stakeholders on the digital vision, there is little discussion on how to practically and effectively move from current state to this vision. Perception of high costs There is a valid perception from decision-makers that projects linked with IT systems often overpromise and under-deliver, often with a sig. budget overrun. This perception delays decisions to commence a digital initiative. Unclear accountability, disconnect with current operating model Owners of digital transformation are often unclear, and silo organizational structures are mismatched with a fundamentally different way of operating. Ill-defined business model and business case There is a degree

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of skepticism from leadership as to the robustness of the business case for digital and a lack of clarity on what new business model will look like. Lack of digital education and understanding This can result in behaviors such as: An aversion to change or the implementation of something not fully understood. A naive rush to implement something on promise often through a misguided desire to appear progressive. Remote decision-making creates dissonance with local leadership: Cultural difficulties of new remote operating models are not fully recognized. Operating site leadership is reluctant to concede critical process ownership to external teams, and the external teams often fail to deliver positive outcomes due to a lack of deep understanding of the site issues. Resourcing requirements to support a global business from a single location are underestimated, as are the difficulties in gaining access to accurate data. India’s domestic minerals sector has been a significant participant in the global mining industry. While for several minerals India has among the largest resource base and production, for some others it is emerging as a demand driver of the global mining industry. As a result of increasing integration with global trade, the price discovery in the industry is more aligned with industrywide trends, thus subjecting the sector to global risks, opportunities and competitive pressures. Thus, most of the drivers of digital adoption also apply to the Indian mining sector, for eg, mine productivity, cost optimization, safety and social license to operate. However, the mining sector is also exposed to several additional challenges and opportunities as follows: Growth momentum Indian minerals sector lacks a strong growth momentum in key categories. Over the past few years, mineral production has been impacted by mine closures on account of judicial/regulatory affairs and lack of new mine allotments. Despite a vast natural reserve base, the sector accounted for only ~2.6% of the GDP in FY’16. India has witnessed a fall in output of iron ore from its peak and continues to import some high-value items such as gold and copper concentrate. The coal sector, however, has achieved accelerated production growth. Exploration The mining industry has a massive unexplored potential largely due to low exploration budgets and limited participation of the private sector in the past. The presence of global mining majors or exploration community is low or declining. Exploration methods are quite traditional with limited contribution of geochemistry, geophysics, remote sensing, advanced tech and entrepreneurship of junior explorers. As the surficial finds deplete, or grades slippages continue, it will become increasingly complex to discover and evaluate deep-seated ore bodies.

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Productivity Productivity remains a major concern with miners. For eg, domestic coal productivity trails far behind the average for the industry globally. In addition, given that open cast mines are ageing and ore grade is declining, miners will need to augment output from underground mines, efficiently, which will require technological advancements specific to geological conditions. Infra is a great value creator for the mining industry. The Indian mining industry has generally struggled with constrained Infra availability, particularly roads/railways and port connectivity, which is a major impediment to access and development of mining areas, and mine-tomarket logistics. Infra, where available, is relatively expensive when benchmarked to competing producer countries for a similar service. Also, the need for ICT Infra is growing for accessing and operating in remote locations efficiently. Regulations, Governance India’s regulations and complex procedural requirements for the mining sector are not the greatest examples of certainty, clarity and efficiency when benchmarked with global peers. Time-consuming multi-level processes and feeble enforcement hinder the ability of the modern miner to focus on sustainable growth. Several projects have been abandoned due to delays in acquiring land and obtaining environmental and forest clearances. Even with the auction process starting to impart transparency in grant of mining concessions, subsequent procedures are too complex and time intensive until commencement of output. Relatively higher taxation levels have burdened the industry with a structure that is not globally competitive. As a result, despite the 100% FDI route, the mining sector has witnessed restricted FDI inflows and engagement by global mining players. On the other hand, fraud and corruption challenges continue to plague the industry, though only few players may be involved. Price and currency volatility Like most commodity businesses with a significant global trade flow, Indian miners have to follow global price trends, which have been extremely volatile. This necessitates them to constantly follow global events that impact demand and supply, align their product sale prices and account for currency variations. Such volatility creates immense stress on the cash flows and profitability of the players. This is particularly relevant as prices of most minerals are referenced in US dollar terms while most costs are in Indian rupee. Environment, health and safety Sustainable mining with responsibility for health, safety of all stakeholders and environment is an imperative for mining globally. However, the performance of Indian mining on such parameters has been particularly inconsistent, mainly because of inadequate sensitivity and sensibility toward

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this responsibility. However at times, factors that lend to this situation include complex and outdated standards and small-scale operations of the vast majority of mining tenements. High occupational risks pose significant challenges to mineworkers’ safety and health standards. Against the backdrop of various mishaps, CoS need to target zero-fatalities and minimize health hazards arising from on-site pollution. Also, the environmental performance of a mine and its impact on communities need to be strictly monitored. Scale of operations The relatively smaller scale of mining tenements and operations in India restricts miners’ ability to bring in desired levels of investment and deploy new tech, in turn lowering the efficiency in operations and productivity and also posing challenges in terms of productivity, safety, sustainability and governance. Govt, industry and stakeholders are cognizant of these challenges that are somewhat unique or elevated in the Indian mining sector. Reforms and other measures to alleviate them or manage their impact seems underway. While such long-range steps progress at varied speeds and intensity, the industry needs to move ahead with initiatives that it can meanwhile undertake to combat these challenges. An efficient way of addressing these challenges is employing smart digital solutions. Unrealised sector potential The majority of India’s vast reserves of key metallic and non-metallic minerals remain unexplored, signifying high potential for growth. Constrained by minimal exploration budgets, only 13% of the 575,000 sq. km. area with obvious geological potential has been explored. Even where the resource base is known, the actual mineral output for most minerals has been quite low for eg, annual output for bauxite and iron ore is only 0.7% & 0.6% of their respective resources in the country. India continues to be a major importer of thermal coal despite abundant resources. With India’s working-age population set to increase by 220 mn over the next 20 years, urbanization and rising incomes will accelerate growth in construction, manufacturing industries. In line with that, the thrust on Infra investment through Housing for All by 2022 campaign, modernization of railways and reforms in the power and real estate sectors will lift the demand for minerals and metals. In addition, the Make in India campaign, which targets to achieve 25% growth in the manufacturing sector by 2020 from 17.1% currently, will further push the domestic consumption of minerals. It is thus important that Indian stakeholders scout innovative ways of expanding output, rather than increasing

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their dependency on imports.

The Technology

Govt, public, pvt sector players in the Indian mining sector continue to aim for growth, operational efficiency and sustainable mining through tech deployment, driven by the Digital India, Skill India and other campaigns. While tech adoption is gaining pace, it still lags behind, for example, with only 1% of the data generated being analyzed. As the industry progresses toward complete integration across the supply chain, it has undertaken several “smart initiatives.” Outlined below the currently known developments that are relevant to address the above challenges and also the key themes that hold promise of immense potential. Enterprise integration and organizational efficiency Large mining CoS are focusing on adopting tech to achieve enterprise integration and organizational efficiency. While large private mining CoS have been early adopters, public sector CoS are increasingly adopting tech to achieve these objectives. CIL has achieved savings of INR 8 bn through e-tendering and reverse auction on an e-procurement platform. The Co. is leveraging ICT for other business operations such as finance, material management, personnel, production, and sales and marketing. CIL is also implementing GPS / GPRS-based vehicle tracking system, electronic surveillance and RFID tagged trucks to restrict unauthorized activity and enhance productivity. Hindustan Copper has implemented an ERP solution across segments such as manufacturing, maintenance, marketing, finance and materials. The centralized business platform has enabled faster decision making and real-time visibility as well as standardized processes and management systems, thereby strengthening the financial management, supply chain management, customer service and HR functions. MECL is progressing with a full-scale ERP implementation to centralize the data and management system on a single platform. Productivity and growth Aside from incorporating integrated enterprise platforms, miners are also taking steps to embrace innovation to enhance productivity and enable growth. There is increasing recognition of longterm cost and productivity benefits. Hindustan Zinc has placed orders for Atlas Copco’s advanced, semi-autonomous equipment for five of its mines in north-west India. This is in line with its efforts to improve productivity and safety while significantly enhancing the underground mining output. Northern Coalfields, a CIL subsidiary, plans to use drones for survey and ground profiling of 4 of its 10 mines. The miner has introduced

operator independent truck dispatch system (OITDS) in 5 mega projects and laser scanner for surveying and monitoring mines. Further, it is looking to increase operational efficiency by introducing a digital drive in draglines and shovels, and providing real-time interface facility for monitoring equipment and payload data as well as vehicle health. Vedanta has engaged Siemens for a digital fleet Center solution, which will link its power plant assets in Punjab and Chhattisgarh to a monitoring station. This will reduce unplanned outages, optimize costs and improve efficiency. In addition, for its power plants, the company is considering digital tech for predictive maintenance and to better management of fuel needs. MSTC Limited has launched “M3 Metal Mandi,” a portal for metal transactions that aims to benefit micro small and medium enterprises (MSMEs) by bringing in transparency and a userfriendly interface for transactions. While digitalization is catching pace with big miners, it is not as yet a priority for the medium and small operators, who continue to deploy older tech and stick to conventional mining methods. Visibility of cost-benefit for smaller mines and uncertainty of benefit realization are the main inhibiting factors. Exploration Initiatives to digitalize various stages of exploration are underway. For eg, GSI launched an Online Core Business Integrated System, an open IT platform, to share quality geoscientific data through digital channels for socioeconomic and scientific gain. The comprehensive data management system will deliver all baseline and exploration pre-competitive data to its stakeholders, including Ministry of Mines, national and state level earth science organizations / departments, industry and citizens. It will provide the following services: Enterprises Portal, which will have all of the 6,000+ GSI reports containing geological information such as maps and reports. Access to spatial data portal containing Open Geospatial Consortium (OGC) compliant map service across thematic domains. Ground, airborne and marine geophysical data collected by GSI. Virtual repositories of resources such as 2D and 3D images of rocks, fossils, meteorites and natural geological sites. Govt’s goal to fast-track big picture projects will pave the way for breakout of virtual technologies, which will increase productivity and the success ratio. For instance, use of VAR, combined with artificial intelligence and machine learning as well as data analytics to map underground resources in a 3D form, will help CoS pinpoint drilling targets with more accuracy than traditional methods. Resource data is fed into a virtual reality model to create increasingly accurate new models of the

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Focus: Smart Digital Solutions in Mining Industry

underground deposits. Governance Authorities are increasingly adopting the “digital way” to improve transparency in the management, mining and transport of commodities, governance and control: The Ministry of Mines launched the Mining Surveillance System (MSS), a satellite-based surveillance network to check illegal mining via remote sensing activity. It uses satellite images generated using space tech and overlaid on geo-referenced mining maps, which will go a long way in encouraging systematic mining. The Ministry has partnered with Bhaskaracharya Institute to curb illegal mining across major minerals, by superimposing all the maps of mining leases on digitized cadastral maps. Out of the total 4,000 mines of major minerals, digitization work of around 3,000 mines is reported to have been completed. There exists a need to digitally consolidate and connect smaller mines and operators. Govt. is planning to deploy drones, to not only limit its revenue losses and prosecute the mineral rights’ violators but also curb environmental damage.20 The use of UAVs will also boost miners’ confidence in their ability to control unlicensed activity. Regulatory and procedural streamlining In the past, policy reforms were seen as the go-tosolution for challenges relating to regulatory and procedural uncertainties. However, as tech evolves, its application can “quick- fix” some longpending issues. In one of the initial moves to digitalizing its systems, the Government launched a webbased portal to improve efficiency and bring transparency in obtaining environmental and forest clearances. It automates tracking of proposals, and displays their status at each stage. Other tech options include the e-auction initiative and the pilot stage Mining Tenement System (MTS). It involves automating the entire mineral concession lifecycle starting from identification of areas for mining / exploration and ending with closure of the mine, and connecting the various stakeholders for realtime transfer of electronic files and exchange of data. MTS will not only enable online filing of applications but also identify the areas for various types of mineral concessions. This would involve integration of web-based tech services with a GIS, so that info could be shown spatially in the form of maps. Infra The initial waves of tech investments connected operations with corporate and reporting processes through enterprise resource platforms. These efforts to consolidate operations across the enterprise have driven a significant investment in digital Infra, to

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connect remote locations to telephone, internet and video networks. In addition, the manufacturing execution system (MES) is a standard network at a plant operations level. Drones and GPS-enabled vehicles are being considered to tap inaccessible yet potentially mineral rich areas. In addition, miners are increasingly employing smart sensors to get real-time insights into the performance of the Infra. As and when the size and scale of operations expands with tier I deposits of global scale and competitiveness, the sector may start to witness more investments in digital Infra. Examples include what Rio Tinto’s center in Western Australia and Adani’s plans for a remote operations center (ROC) for its Carmichael project, in Queensland. ROCs have great potential in poorly connected or insurgency prone areas, as they allow miners to extract ores and run operations with restricted access. Given that even vehicle automation is in nascent stages, miners and authorities need to co-develop innovative solutions to alleviate the lack of Infra in some mineral regions in India. Human capital and skill development The thrust on expanding domestic output and the growing focus on Make in India have increased demand for a skilled and digitally literate manpower. However, the mining sector has not been the preferred choice for the new educated class entering the workforce. This can be a major roadblock to technological advancement in the sector. To address this gap, the sector is increasingly adopting training programs to skill its future workforce. For instance, the Ministry of Micro, Small and Medium Enterprises signed an MoU to launch Bharat ERP an initiative to digitally enable ~30,000 MSMEs. Similarly, Siemens has engaged with the Ministry of Industries and Mines, Govt of Gujarat and SAIL in the past through MOUs and is training employees to work in digitized factories. FIMI is actively collaborating with the Ministry in skill development in the mining sector. The skill challenge, however, cannot be addressed overnight, as there is a long gestation period in skill acquisition and absorption. Recognizing the need, Vedanta recently launched a pilot project to promote digital education in schools, in collaboration with the Karnataka Directorate of Education. Skill training also requires significant investment as most mines in rural areas have little or no Infra for training centers. While the Ministry of Mines has prepared a skill plan and the Govt is ramping up its Skill India mission, the industry needs a stronger PPP to widen the scale of technical education, trainings and mentorship programs.

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Mine safety None of the benefits of digital application are more important than mine safety. However, the investment therein has not been as expected. Mining fatalities have not been eliminated. However, some miners have initiated efforts, for instance: Tata Steel’s Noamundi iron mine is the first mine in India to launch “Drone Application in Mine Monitoring” (DAMM). Its objective is to inspect safety zones and lease boundaries, and monitor mining and reclaimed areas as well as quarry and dump profiling. Hindustan Zinc is also looking at a host of smart solutions for its priorities of zero harm to people, host communities and environment. It is establishing an underground Wi-Fi network across its mines to facilitate asset tracking, real-time visibility of operations, tele remote operations and VoIP-based communication. The industry needs to increase the adoption of safety technologies such as mobile proximity warning systems, wireless methane sensors and inertial navigation to locate trapped workers as well as curated solutions such as Wipro’s Predictive Risk Intelligence Management and Caterpillar’s intelligent mine management. Miners can also consider tools such as microseismics to locate rock fractures and predict impending roof falls, rock bursts or any other hazards in working area.

Digital themes in the India mining sector

Industrial Internet of Things/Smart sensors It is a system of interrelated computing devices, mechanical and digital machines and unique identifiers for employees to transfer data over a network without human intervention. Smart sensors provide additional information about the process or the entire plant. Smart sensors either directly measure physical values or use existing measures to indirectly calculate additional information. Smart sensors are the enablers for the implementation of advanced automatic functions, process models and condition monitoring. This tech can lead to plan-to-produce (ore to finished goods) optimization based on operational insights from analyses of diverse data signals from processes (ore reduction, melting/smelting, casting, rolling etc.). Advanced tracking system for ladles, pots, chutes and baskets or vessels. Automation (Automated vehicles / autonomous haulage System) and robotics. Productivity

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improvement by cutting down shift breaks and delays due to breakdowns etc. Compensates for scarcity of mining staff. Improved safety and minimal collision probability. Higher energy efficiency by lowering fuel use. UAVs - High resolution ground scoping and profiling, real-time updates on production progress and stockpile sizes; minimizes risk by identification of potential hazards. Repetitive, laborintensive and dangerous work is supported by fully automated mechatronics solutions. This gives more room to focus on essential tasks. It improves safety and minimizes collision probability. Automated converter tapping including the positioning of the ladle transfer car and alloy charging. Big data, advanced analytics and simulation modeling Identification of inefficiencies and optimization of bottlenecks in procurement and production, and increase in collaboration between departments. Better decision making backed by real-time big data analysis. Reduction in non-productive time delays. Identification of true cost drivers and finding correlation between factors. Simulation modeling; Optimization of design without physically drilling, thus lowering the investment, waste and physical footprint of the operation. Mobility (information sharing mobile platform) Uses geo-position devices to allow tracking of employees, assets and equipment. Positive impact on health, safety and environment and ability to limit workers from hazardous situations. Enables better communication, increased worker productivity and better recording of field data. Online documentation retrieved via QR-coded equipment and augmented reality applications to guide maintenance work. To ensure best possible operation and maintenance of a plant, a vast variety of information sources is required. “Smart work” ensures that all personnel automatically receive timely information tailored to do their job. Cloud computing Cloud tech — Assistance in

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centralizing functions and controls, as well as standardizing multi-location operations. Platforms support collaborations, measurements and analysis of the business processes that compete globally. Direct interaction with suppliers. A greener and sustainable choice. Condition-based monitoring (CBM) and predictive maintenance. Telematics-enabled sensor data for monitoring equipment degradation and predicting failure based on history or patterns. Increase in the health/longevity of the mining equipment fleet. Detection of impending failures early enough to save the equipment/machine. Automatic scheduling of maintenance activity, skill or spare parts required. Converter tilting-drive monitoring and rolling mill drive-train monitoring. Centralized remote command center Live view of remote mines, and analysis and prediction of factors such as production output, equipment status and other conditions. Platform for bringing more accountability and collaboration in process management. Safer work environment and faster tracking and evacuation. Centralized KPI dashboards and role-based reports. Robotic Process Automation (RPA) For performing manual, rule-based administrative and repetitive tasks efficiently while reducing time and cost. Replacing manual steps in procurement, inventory management, invoicing and payment processing by digital processes, with access to real-time analytics to support adaptive decision making. Artificial intelligence Machines enabled to derive input from various sources such as mining hardware, worker equipment and databases to support miners in problem solving processes Helping decision makers make more informed choices, optimize yields and minimize environmentally harmful inputs Intelligently increasing efficiency by removing bottlenecks and improving operational throughput on an ongoing basis. Cooling model and power

cooling for microstructure control and new steel grades. Wearable tech Personal protective equipment (PPE) enhances productivity, safety, and longterm sustainability by preventing accidents New industrial applications for heads-up displays, such as Google Glass can revolutionize the way industrial CoS manage equipment and safety at a worksite Constant hands-free control of workplace’s resources, operations and machinery to enhance productivity. Ore optimization technologies. Rapid mineralogical characterization improves grade control of the ore using a number of techniques such as mine face scanning, drill core logging & remote hyperspectral imaging. Cooperative Research Centre for Optimising Resource Extraction’s integrated methodology can reverse the trend of declining ore grades through solutions such as Grade Engineering & Integrated Extraction Simulator. Blow-end calculation in a basic oxygen furnace convertor. Social media Miners and geologists increasingly using data and analytics from social media to locate new mining opportunities, for instance, inputs and posts from hikers who end up gold panning Early warning signals on risks, prevention and management of risks. For engaging community and government, communicating contribution, securing social license to operate and acquiring talent.

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Focus: Automation Industry

From Industry 1.0 to 4.0: Definition-Development-Solutions

NTRODUCTION

We are at the beginning of the 4th industrial revolution. Most commonly used terms to describe this development, that is rapidly changing the industrial landscape, are I4.0 (I4.0), Smart Manufacturing (SMF), the Internet of Things (IoTs), cyber-physical production systems (CPPSs) and Digital Transformation (DigiT). Around the world, traditional manufacturing industry is in the throes of a DigiT that is accelerated by exponentially growing technologies. CoS and their industrial processes need to adapt to this rapid change if they are not to be left behind by developments in their sector and by their competitors. These trends are not to be compared simply with a greater level of production automation, a process that has, since the 1970s, been driven by developments in electronics and IT. The widespread adoption by manufacturing industry around the world of Info and communications tech is now paving the way for disruptive approaches to development, production and the entire logistics chain. This networking within an ’internet of things, services, data and people’ will transform the future of manufacturing. The I4.0 concept encompasses the

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digitalization of the horizontal and vertical value chain, innovation in products and services and the creation of new business models. The key business drivers of this transformation include improving customer experience, increasing speed to market and reducing costs. To reap the benefits of this revolution, leaders of industrial enterprises have I4.0 at the top of their agenda. However, implementing an I4.0 production environment will be an incremental journey over several years that will include modernizing legacy systems. Once undertaken, the possibilities of applying I4.0 concepts and tech are unlimited. Other related terms include the ‘Industrial Internet’ or the ‘Digital Factory’, although neither takes as complete a view. While Industry 3.0 focused on the automation of single machines and processes, I4.0 focuses on the end-to-end digitisation of all physical assets and integration into digital ecosystems with value chain partners. Generating, analysing and communicating data seamlessly underpins the gains promised by I4.0, which networks a wide range of new technologies to create value.

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DEFINITION AND DEVELOPMENT

Our physical world has become hyper connected and is now rapidly being augmented with a layer of “smartness.” The 4th industrial revolution like the ones that came before is driven by new technologies. The term I4.0 refers to a further developmental stage in the organisation and management of the entire value chain process involved in manufacturing industry. Another term for this process is the ’fourth industrial

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revolution’. The concept of I4.0 is widely used across Europe, particularly in Germany’s manufacturing sector. In the US and the English-speaking world more generally, some commentators also use the terms the ’internet of things’, the ’internet of everything’ or the ’industrial internet’. What all these terms and concepts have in common is the recognition that traditional manufacturing and production methods are in the throes of a DigiT. For some time now, industrial processes have increasingly embraced modern IT, but the most recent trends go beyond simply the automation of production that has, since the early 1970s, been driven by developments in electronics and IT. The widespread adoption by manufacturing industry and traditional production operations of ICT is increasingly blurring the boundaries between the real world and the virtual world in what are known as cyber-physical production systems (CPPSs). CPPSs are online networks of social machines that are organised in a similar way to social networks. Simply put, they link IT with mechanical and electronic components that then communicate with each other via a network. RFID tech, which has been in use since 1999, was a very early form of this technology. Smart machines continually share Info about current stock levels, problems or faults, and changes in orders or demand levels. Processes and deadlines are coordinated with the aim of boosting efficiency and optimising throughput times, capacity utilisation and quality in development, production, marketing and purchasing. CPPSs not only network machines with each other, they also create a smart network of machines, properties, ICT systems, smart products and individuals across the entire value chain and the full product life cycle. Sensors and control elements enable machines to be linked to plants, fleets, networks and human beings. Smart networks of this kind are the bedrock of smart factories, which themselves underpin I4.0. Of central importance for I4.0 is its interface with other smart infrastructures, such as those for smart mobility, the smart grid, smart logistics and smart homes and buildings. Links to both business and social networks the business web and the social web also play an increasingly important role in the DigiT to I4.0. All these new networks and interfaces offered by I4.0 within an ’internet of things, services, data and people’ mean that manufacturing is set to undergo enormous changes in future. This trend is still in its infancy in some manufacturing CoS and industrial sectors, but in others, the transformation to I4.0 is already well under way. Traditional industrial economies, such as Germany and the US, expect this fourth industrial revolution to bring many advantages, ranging from enhanced global competitiveness to a reversal of the trend to relocate production to low-wage countries and the opening of more domestic ||www.constructionmirror.com/net||

production locations in Europe and North America. Research has shown that Moore’s law, which states that the capacity of microchips, bandwidth and computers doubles every 18 months, representing exponential growth, also applies to other technological developments.4 3D printing, sensor technology, artificial intelligence, robotics, drones and nanotechnology are just a few examples of exponentially growing technologies that are radically changing industrial processes, accelerating them and making them more flexible. Many of these technologies are not new and were, in fact, ’invented’ some 20/30 years ago. However, the recent massive boost in computing power (Moore’s law) and the reduction in cost, along with miniaturisation, now make them suitable for industrial use. New technologies can be overrated and can cause concern, because of the slow development curve in absolute terms at the beginning. When the exponential dev takes off, the influence of such tech’s is often underestimated and disruptive market changes are missed. Several of these exponential technologies will be leaving their linear growth paths in the coming years and we are expecting exponential growth. This exponential growth will fundamentally shape I4.0.

supported by augmented reality and optimised in an integrated network. Horizontal integration stretches beyond the internal operations from suppliers to customers and all key value chain partners. It includes technologies from track and trace devices to real-time integrated planning with execution. Digitisation of products includes the expansion of existing products, e.g. by adding smart sensors or communication devices that can be used with data analytics tools, as well as the creation of new digitised products which focus on completely integrated solutions. By integrating new methods of data collection and analysis, CoS are able to generate data on product use and refine products to meet the increasing needs of end-customers. Leading industrial CoS also expand their offering by providing disruptive digital solutions such as complete, data-driven services and integrated platform solutions. Disruptive digital business models are often focused on generating additional digital revenues and optimising customer interaction and access. Digital products and services frequently look to serve customers with complete solutions in a distinct digital ecosystem.

I4.0 is enabled by technologies that integrate the digital and real worlds, such as:

WHAT DRIVES I4.0?

I4.0 digitises and integrates processes vertically across the entire organisation, from product development, purchasing, through manufacturing, logistics and service. All data about operations processes, process efficiency and quality management, as well as operations planning are available real-time,

Internet of Things (IoT) Connecting more and more systems, devices, sensors, assets and people through networks ranging from wireless, low-power wide-area networks to wired high-capacity networks. Mobile solutions Including smartphones, tablets, wearable sensors and smart glasses. Cloud computing Including low-cost processing and data storage solutions. Cyberphysical systems (CPS) Monitoring and controlling physical processes using sensors, actuators and processors, based on digital models of the physical world. Big data analytics and business intelligence Turning data into actionable insights, which include early warning algorithms, predictive models, decision support, workflows, dashboards. Advanced manufacturing technologies Including robotics and 3D printing New technologies have never been more abundant or affordable. At the same time, the capability to collect, distribute, share and analyze Info to make decisions based on realtime data and predictive analytics, and create new business value has improved considerably. This is evident from the significant drop in sensor, bandwidth and processing

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Focus: Automation Industry costs in the last 10 years. Sensors, bandwidth and processing costs have dropped dramatically in the last decade: Sensor prices have dropped to an average of 60 cents. The cost of bandwidth has decreased by a factor of nearly 40 times. Processing costs have declined almost 60 times. Today, in the virtual world, new models can be used to simulate and analyze products and processes from the physical world. In product development, these models can be used for product optimization and to operate and control the manufacturing process. In business, these models can even be used to support business decisions.

BUSINESS BENEFITS

A digitally-integrated, intelligent supply chain enables an unprecedented level of collaboration and real-time visibility across the supply chain to help address rising customer expectations. Imagine a real-time connected supply chain. What if all the participants in the supply chain shared data from their production sites, vehicles, warehouses and databases in real time? What if you used real-time points of sale and inventory data to understand the state of your business? Would you be better equipped to accommodate critical orders and meet customer expectations with faster, more accurate shipping and handling? Imagine connected vehicles, containers and pallets. What if your company tracked and controlled the condition and location of your products throughout the supply chain? Would this help your company improve inventory management and product quality? Would serialization help your company deal with fraud and counterfeit products? Imagine connected smart production equipment. What if equipment settings were self-adjusted based on materials used, products being made and other ambient conditions? Is your company able to customize mass-produced products based on the needs of an individual customer? What if equipment could be monitored remotely and malfunctions predicted accurately? Imagine connected mobile and wearable devices. What additional functionalities and services would your company deliver to customers? How would you improve worker safety? Whatever your business, what if a fluid digital continuum could connect your departments, customers, suppliers, partners, production equipment and products throughout your product and services life cycles? A digitally-integrated and intelligent value chain offers almost limitless possibilities. I4.0 solutions improve operations efficiency, productivity, product quality, inventory management, asset utilization, time to market, agility, workplace safety and environmental sustainability. Today, the most promising I4.0 solutions are energy mgt and predictive maintenance, especially in combination with manufacturing execution systems (MES).

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Predictive maintenance: Using sensors to determine when equipment needs to be serviced can prevent breakdowns and reduce routine maintenance costs With in-built sensors connected to the Internet, it is possible to monitor production equipment remotely and in real time. This enables predictive maintenance, where analytical models can be applied to predict future areas of concern. In this case, recommendations can be sent to operations, maintenance and IT departments to address a breakdown, even before it occurs. By doing so, operating costs and capital costs can be reduced by facilitating proactive servicing and repair of equipment, thereby improving capacity utilization and productivity. Together with Microsoft, CGI has developed an elevator maintenance solution for one of the world’s leading elevator manufacturers, using the latest Internet of Things (IoT) technology. The company, which maintains more than 1.2 million elevators around the world, wanted to transition to a more proactive, predictive maintenance approach driven by real-time data. The solution extracts data from smart sensors on the elevator, generates valuable insight using analytics, and makes the Info available to supervisors and service technicians via cloud-based dashboards. The system was implemented for a no of the CoS elevators and has resulted in reducing elevator downtime, improving resource planning, cost forecasting and maintenance scheduling. In this way, equipment manufacturers can use IoT technology to change their business model to a service model, provide ongoing maintenance under contract and guarantee a defined uptime for equipment. IoT technology enables real-time monitoring and remote service. In addition, performance data can be gathered to improve the design and reliability of the equipment, thereby reducing warranty costs. Once equipment is interconnected and managed through IoT, it is possible to improve asset utilization significantly. According to research by McKinsey & Company, predictive maintenance using IoT can reduce maintenance costs of factory equipment by 10–40% and bring down equipment downtime by up to 50%. Energy management: Managing energy consumption results in greener operations, lower energy costs,

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lesser unplanned downtime and more consistent quality Manufacturers are increasingly pursuing a resource efficient and sustainable approach due to several economic, social and governmental pressures. In energy-intensive industries, energy costs form a significant part of the operation costs. In this scenario, the use of IoT and predictive analytics has an important role, as these technologies can reduce energy consumption and operating costs significantly. In manufacturing organizations, metering does not reveal how energy is distributed across buildings, processes and equipment. Hence, the 1st step towards developing a systematic approach to energy mgt and improving a company’s competitive position lies in the increased visibility of energy consumption patterns. Energy consumption in a plant can be easily monitored through sensors in a facility and production equipment. Monitoring deviations from regular energy consumption can help to detect failing equipment. In addition, manufacturing execution systems (MES) capture relevant data, such as equipment settings, shifts and process parameters, providing insight into how energy is used in operations. Further, predictive analytics also provides manufacturers with insights that help in the implementation of energy programs. According to research by McKinsey & Company, PWC and Roland Berger, energy management using IoT can reduce factory energy costs by 10–30%. Other areas of interest are supply chain management and inventory management. I4.0 solutions can offer manufacturers a comprehensive view of the production process and provide real-time controls that facilitate an uninterrupted flow of finished products and avoid defects. Additional sensors can also be installed in plants to monitor process conditions with greater granularity, while models can be used to predict process capability and product quality. This helps organizations to monitor the end-to-end manufacturing process, address bottlenecks, reduce waste and energy costs, and remove operator intervention. IoT can also improve inventory management by using weight or height detection sensors to enable condition-based automatic reordering, depending on actual stock quantities, instead of replenishment estimates. Furthermore, remote monitoring and sensing of toxic gas, oxygen and ozone levels inside plants can dramatically increase workplace safety.

SOLUTIONS

The following four main characteristics of I4.0 demonstrate the huge capacity that industry and traditional manufacturing have for change: vertical networking of smart production systems, horizontal integration via a new generation of global value chain networks, through-engineering across the entire value chain and the impact of exponential technologies.

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sensors enable rapid decision-making to improve operational safety, work processes, servicing and maintenance. Transparency not only makes development and production processes more efficient but also offers substantial operational cost reductions for customers, because maintenance work is carried out in a needs-oriented manner (e.g. only a short while before a risk develops). This creates long-term competitive advantages in both reliability and price.

Horizontal integration

Vertical networking

IT Integration: The vertical networking of I4.0 requires new IT solutions. In many cases existing IT infrastructures are very fragmented and result in poor networking. New, combined solutions need to be developed from a range of components from suppliers of sensors, modules, control systems, communications networks, business applications and customer-facing applications. CoS making the right choice of these components and adapting and integrating them into a new over-arching solution will secure long-term market advantage. Analytics and data management: I4.0 will generate enormous quantities of data. Gathering, analysing and processing such big data will generate new insights, support decision-making and create a competitive advantage. CoS need to develop new specialist skills in the areas of analytics and efficient data management, and put new business processes in place on the basis of the insights that this analysis reveals. CoS who set themselves apart from their competitors in this respect will overtake existing sector leaders. Cloud-based applications: The simple networking of cloud-based solutions offers excellent opportunities to host and make efficient use of the big data generated by I4.0. Cloud-based solutions will become increasingly crucial to I4.0. There are particular advantages for decentrally networked smart-production systems, where previously unimaginable computing power will enable cloud-based applications to deliver universal, anytime access to all key data. This makes it simpler to gather, monitor, distribute and analyse data not only between factories but also across the entire global value chain network. This forms the basis for providing over-arching market solutions that seamlessly integrate all stages from suppliers’ value chains to end customers and allows innovation beyond products. Operational efficiency 2.0: The DigiT to I4.0 also offers new opportunities to drive forward operational efficiency. The effective analysis, assessment and application of the data collected from machines and ||www.constructionmirror.com/net||

Business model optimisation: I4.0 means getting to grips with radical new approaches to business rather than merely making incremental improvements to established business models. To achieve this, CoS need to develop new skills, both at individual employee level and within the organisation as a whole. A solely top-down approach will create resistance in the organisation, while introducing pockets of innovation within traditional business will provoke a reaction from less engaged employees. Successful CoS will develop new segments on the edge of their current business that will, in time, become central to the business. Smart supply chains: There will be a particular focus on new models that are tailored more closely to individual customer needs and enable new cooperative models with business partners. However, this will place new demands on the supply chain. The DigiT will create a single database, making supply chains smarter, more transparent and more efficient at every stage, from customer needs to delivery. Research and development, procurement and purchasing, production and sales functions are becoming more closely aligned as digitisation advances. The most successful CoS will use better communications to integrate suppliers and customers’ needs into all value-creation activities. Smart logistics: In the wake of digitisation, logistics processes will have to become smarter right across new generations of global value chain networks (’smart logistics’). This applies to inbound logistics, intralogistics and outbound logistics. Major challenges are posed by the integration of autonomous technologies, flexible logistics systems, new services, new warehousing and distribution models and the interlinking of internal production, pre-assembly and external service providers. All these areas need to be addressed to remain competitive. IT security management: The extensive networking already cited and the high levels of data sharing involved in I4.0 will greatly increase the demands made on data security. CoS urgently need a tailored risk management system and a security strategy geared to cyber security and aimed at improving operational security and protection from attack right across the value chain. In this respect, manufacturing industry currently lags a long way behind the financial services

sector. New products, data, intellectual property and so on will have to be protected against unauthorised use and/or abuse. Existing factories and structures will have to be equipped and will also have to develop secure solutions for the new networks. New taxation models: In future 3D printing technology will allow the printing of products across countries and continents, with no physical crossing of national borders anymore. This will make new demands in terms of value-added tax and customs duty regulations. New IP management Management of intellectual property (IP) will also have to change as a result of the DigiT to I4.0. New business models and new models for cooperation that arise as a result of I4.0 will require new, individual solutions to the digital IP issue. A broad application of 3D printing will make special demands in this respect. Issues of IP focus not only on printers, printer technology and materials but also on systems and plans.

Through-engineering

Ten types of innovation: I4.0 will enable integrated and cross-disciplinary engineering throughout the value chain and throughout product and customer life cycles. I4.0 applications are designed to help ensure that innovation is not limited to the traditional area of product innovation. Innovation has traditionally related predominantly to product offerings, but its major potential lies in the areas of company structures, processes, networks and profit models, together with customer-facing functions, such as new services and distribution channels, new uses for a strong brand and distinctive customer engagement (as categorised according to Deloitte Monitor’s “ten types of innovation”). Empirical research shows that the share price of CoS deploying more than just two types of innovation performs better on the stock exchange – and that top innovators deploy five or more types of innovation. Efficient management of innovation: Successful management of innovation takes in the entire company and covers strategy, organisation, project portfolio management and product development. The DigiT to I4.0 will make it possible to improve further the efficiency of innovation management in all these areas. Interactive and tailored curricula make individualised learning possible, thereby speeding up strategic implementation and organisational development. In project portfolio management, I4.0 solutions make it easier not only to track the return on investment (ROI) in innovation but also to identify risks by using global comparative project data for monitoring and remedial purposes. In the area of product development, IT can be used to speed up research and development. This transforms the sharing of Info between existing technologies within global networks along the same

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Focus: Automation Industry lines as the ’game networks’ that the global online gaming community use. Efficient life cycle management: The DigiT to I4.0 will make it possible to provide relevant data for life cycle management at any time and from anywhere. These data will comprise not only Info and reports but also the results of big data processing to generate relevant early indicators through the use of artificial intelligence (AI). AI will use global cross-checking and assess the plausibility of generating relevant bases for decision-making supported by data. It will enable CoS to understand and meet their customers’ needs better, as well as to customise product cycles.

Exponential technologies

Corporate venturing: Corporate venturing offers CoS good opportunities for investing in new trends at an early stage and for benefitting from disruptive innovation and exponential technologies. Investing in start-ups enables CoS to be involved in developing innovations and to secure their long-term competitiveness. Such investments allow early and convenient insight into new technologies. CoS need to give themselves more freedom to ’look around the next corner.’ Only then, a new business area can be created that can become the new centre of the business in the future. If such opportunities are missed, the survival of CoS could be at risk. Learning organisation: CoS need to become learning organisations if they are to make full use of the potential of exponential technologies in achieving the DigiT to I4.0. The use and integration of exponential technologies need to be gradual but steady. Learning is the key to sustainable organisational development. Change that is too rapid can be counterproductive. New ideas, processes and business segments are most successful when they start off as a niche where learning goes on, and then gradually migrate to the centre of the organisation to establish themselves as a new leading segment.

CHALLENGES

I4.0 comes with challenges. Today, manufacturers deal with huge quantities of Info, both structured and unstructured, which reside in databases that are not always properly connected. To create business value and meet customer expectations in terms of innovation, 96

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personalization and speed to market, it is necessary to connect these silos and enable a single, unbroken collection of data that is woven throughout the supply chain. In order to achieve this, the following areas need to be addressed: Awareness: Many manufacturers are still unaware of the possibilities that I4.0 technologies can offer14 and company-specific business cases do not demonstrate this suitably. Human Resource: Introducing new business models, business processes, and connected products and services will transform the way employees perform everyday tasks. In order to deploy I4.0 solutions, CoS need new people and skills. Certain jobs like those of industrial workers will change or might even become redundant. Warehouse workers, for instance, are expected to be replaced by autonomous robots. New roles, such as “robot coordinator” and “data scientist”, have been created, while routine and physically demanding jobs will disappear. Data scientists, for instance, collect and analyze data and apply their insights to improve manufacturing processes and products. Robot coordinators oversee robots on the shop floor, responding to malfunctions and carrying out maintenance tasks. Industrial workers have to adapt to new roles and work environments. Today, operators already monitor multiple machines and processes simultaneously, while service technicians are assisted by augmented-reality technology and remote guidance from experts offsite. Jobs will require more and more flexibility, IT competency, knowledge of manufacturing and analytical skills. In this scenario, where resistance to change is the main barrier, people will need to be motivated and trained to deliver new products, services and business processes. Cybersecurity: With digital factories and a digitallyconnected value chain, traditional IT security is not enough to protect the business. To overlook this reality is to compromise the stability and security of the company. As CoS innovate, the “attack surface area” or the enterprise area that is vulnerable, gets bigger. The challenge lies in understanding the potential cyber risk that innovation brings. A single plant shut down can cause production losses of millions of dollars each day. Therefore, cybersecurity risks must be mitigated. Industrial IoT devices must be highly secure by design, and securely integrated into existing automation and Info system architectures. Since breaches are inevitable, detection and response mechanisms have to be in place in the industrial control systems (ICS) area as well. This will build a necessary level of resilience for the company. In these circumstances, securing industrial control systems and ensuring cybersecurity cannot be understated. This can also help manufacturing organizations differentiate themselves from the competition.

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Investments: In order to implement I4.0 solutions, considerable investments are required to create a robust and secure network infrastructure and upgrade or replace legacy systems. To justify these investments, benefits have to be unequivocally and reliably quantified. Collaboration: Today, no single vendor can deliver all the capabilities needed to implement I4.0 solutions, as they are based on multiple technologies and devices that run on different networks. The delivery of I4.0 solutions will be facilitated by an ecosystem of IT vendors, OT vendors, system integrators and emerging IoT startups. The critical success factor is close collaboration between the business, IT and OT. Standardization: Existing manufacturing standards are insufficient to fully enable I4.0 and new technical, architectural and business standards are needed. As an increasing number of devices and systems that use proprietary communication protocols enter the market, data silos are formed, creating a complex network of connections between isolated data sources. Although multiple standardization bodies and industry consortia have published reference architectures and standards, there are no universal standards. This makes it tough for organizations to eliminate data silos. In fact, for years to come, the I4.0 ecosystem will consist of multiple reference architectures, standards and protocols. IT modernization: Currently, industrial automation system deployments are a collection of proprietary technologies and networks. In the future, we will need to connect business planning and logistics solutions, manufacturing operations management solutions and industrial control systems, such as supervisory control and data acquisition (SCADA), distributed control system (DCS), programmable logic controller (PLC) and human-machine interface (HMI). Processes will not be controlled by a standard programmable logic controller (PLC) anymore, but by a service-oriented, decentralized control system consisting of distributed microcontrollers that communicate using Internet standards. Already, hybrid IT environments combining cloud and traditional IT delivery models are on the rise, as cloud computing continues to emerge as a key enabler of both DigiT and operational efficiency.

MANUFACTURING FUTURE WITH I4.0

Manufacturers must do things differently to win market share in today’s environment because it is not enough to maintain the status quo. To survive and thrive, manufacturers must focus on growth. One of the ways manufacturers can achieve growth is by leveraging I4.0 tech’s. I4.0 is all about doing things differently introducing automation and data exchange in manufacturing technologies. It includes cyberphysical systems, the Internet of Things, and cloud ||www.constructionmirror.com/net||

computing.The goal is the “smart factory” with cyberphysical systems capable of autonomously exchanging information, triggering actions, and controlling each other independently. This facilitates fundamental improvements to the industrial processes involved in manufacturing, engineering, material usage, asset performance and mgt, and supply chain and lifecycle management. While there is a great deal of discussion on the various technology enablers of I4.0, it’s more crucial to reframe the discussion around the business benefits. I4.0 isn’t a tech initiative. It’s the future of manufacturing as we know it. It’s not just about improved performance and efficiency; investments into new manufacturing technologies enhance agility, flexibility, and speed-tomarket when designing and launching new products and services. Adopting an I4.0 approach also provides the means to navigate change. Manufacturers are reinventing their business models to focus on value-added services, and/or entering new geographic markets or adjacent market segments. Today’s I4.0-outfitted factories are empowered to drive productivity and keeps costs down while ensuring quality and consistency across manufacturing processes globally. From a business perspective, I4.0 supports four major tenets of operational execution: Interoperability; Info Transparency; Actionable Insights; Automation These tenets in turn, support several business imperatives. These include: Scalability: Automation in the factory gives manufacturers the ability to transition personnel to more value-added activities, and provides the foundation to extend and expand product and service offerings. As they look to expand globally, automation maintains process consistency across locations. This also allows manufacturers to focus on what they do best to find and refine their sweet spot. This moves manufacturers into a more advantageous position from taking on every job to taking on those jobs the organization can do well, while achieving the best profit margins. Cloud technology is central to I4.0. It

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allows manufacturers to scale operations by focusing more on core competencies versus IT operations. Many small to mid-market manufacturers have limited IT staffs; they must be very strategic with IT resources. The cloud is the great IT equalizer giving small and mid-market enterprises access to leading software capabilities, while freeing them from having to monitor and manage infrastructure. The cloud also gives manufacturers the ability to spin up computing power, providing agility to help organizations “rise to the occasion” when needed. Security and Redundancy: As digitization in the factory continues, security implications grow and a sophisticated and layered approach to security is critical. This is challenging for manufacturers who may not have the security resources in-house to adequately address this growing challenge. Again, leveraging a cloud-hosted software model can give manufacturers the ability to confidently charge forward in their I4.0 initiatives. Control and Visibility: In an increasingly complex and global manufacturing enterprise, a single digital thread across all operations is needed to support responsiveness, improve collaboration, reduce risk, and streamline compliance requirements. Visibility from order entry to inventory to finished product is required to inform customers, partners and other stakeholders as to status at any time. Customer Experience: This visibility is key to provide the omni-channel order and fulfillment options that customers demand today. It’s also critical to support co-creation the ability to collaborate with customers and suppliers. Making business processes transparent and/or open to engagement from customers and suppliers can support improved satisfaction, stronger relationships, loyalty. Customization: Mass market manufacturing has given way to personalization and customization. This entails shorter production runs and the need to switch out lines more often. Manufacturers need to be able to configure and reconfigure the shop floor quickly and easily to avoid expensive machine and line downtime.

Velocity is the new business currency. Technologies such as augmented reality can help reduce lag time between design and production. 3-D printing is pivotal in this area. To date, the use case for rapid prototyping has proved to be a game changer, and other broader use cases are now coming into focus. These include 3-D printing for spares or replacement parts providing the ability to improve responsiveness for customers at a time of need. Additionally, manufacturers also benefit from 3-D printing of replacement parts another game-changing value proposition when you consider all the benefits reducing the acquisition time and cost of parts, especially for old or obsolete parts, andenabling manufacturers to implement speedy repairs that significantly reduce downtime while extending equipment shelf-life and return on investment. Innovation: Crucially, manufacturers need to address whether the business systems they have in place are ready to support the journey toward I4.0. Product Lifecycle Management (PLM), Enterprise Resource Planning (ERP), Manufacturing Execution Systems (MES), Computer Aided Drafting/ Computer Aided Manufacturing (CAD/CAM) all must be integrated to support the move toward increased digitization and customization. So many organizations are spending many IT cycles on integration (a necessary evil), which takes away from their ability to focus on innovation (competitive advantage). This integration albatross is the subject of a study by Accenture, who reports a typical IT budget may allocate up to 90% to maintaining the current state and just 10% on innovating a “technology debt” that is bankrupting competitive advantage. The boundaries between production and management must disappear, and ERP, MES and other critical systems must form an integrated unit if businesses are to realize the growth opportunities presented by this new age of intelligent manufacturing. Evaluating the existing IT environment is the first step to understanding how ready or unprepared manufacturers are for I4.0.

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INTERVIEW

Mr. Samir Gandhi Director

Gandhi Automations Pvt. Ltd. 98

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along by trusting and demanding challenging

Gandhi Automations Pvt Ltd is Indiaâ&#x20AC;&#x2122;s No.1 Entrance Automation and Loading Bay Equipment Company. This widely recognized position has been achieved over decades of hard work, innovation, commitment to quality and reliable customer service. Today our products are marketed by us and our distributors to about 15 countries spanning Far East, Asia, Middle East, Europe, Africa, and America. Gandhi Automations is known for the Research & Development, Quality and its commitment towards customers. This helped us being an ISO 9001:2008 organization certified by TUV NORD. We have demonstrated our consistency to provide solutions that meets customerâ&#x20AC;&#x2122;s requirement as well as help them comply statutory and regulatory needs. Since 21 years, we have catered to industries such as Chem-Pharma, Food, Automotive, Logistics, Warehousing, Shopping Malls, Marine, Aviation, etc. Our customers helped us grow

Team pan India, 24x7 Customer care, Factory and Warehouse, etc. We maintain European Standards for sustainability and also offer AMC for preventive maintenance and longevity. We maintain inventory to last minimum 10 years for our installed products as we realize the pain of downtime. Our constant efforts towards innovation and our focus on latest technology have helped us offer energy efficient solutions to our customers.

Tell us about Gandhi Automation requirements. We hence invested into Research Pvt. Ltd. and its success story? & Development, Factory Trained Sales & Service

e are glad that our customers believe in our strength and output. We receive many out-of-the-box requirements that just not require customization but also require additional efforts through R&D for feasibility, develop solution, and successful implementation of the special projects. ||www.constructionmirror.com/net||

Q. Kindly elaborate about your new technology

that you using for your products? Research and development to enhance and extend best technology to our customers is a constant process. This is duly supported by in-house Research and Development Department. Our R&D Team evaluates, develops, tests and releases upgrades as well as launch new products especially for industry or customize

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INTERVIEW

as required by our clients. Being pioneers into our line of business, we have expertise and experiences of 2 decades to educate, guide and deliver the best to our customers.

Q. What are the challenges that you are facing most

and how do you cope up with these hurdles? We are well spread across 23 Sales & Service locations across India, well supported by the experts into Sales, Service, R&D, Manufacturing, Inventory and Logistics. We are glad that our customers believes in our strength and output. We receive many out-of-the-box requirements that just not require customization but also require additional efforts through R&D for feasibility, develop solution, and successful implementation of the special projects.

Q. Please share your global presence also do you have any further plans to expansion of the business internationally?

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Our products are marketing and running successfully across 15 countries spanning Far East, Asia, Middle East, Europe, Africa, and America. Our International Sales Department is focusing on strengthening our relationship and trade with overseas distributors. We are exhibiting at The Big 5 2017 – International Building & Construction Show, Dubai and R+T Worldwide 2018 – World’s leading trade fair for roller shutters, doors/gates and sun protection systems. These events will enable fully functional demonstration of our few products to the visitors. We welcome all distributors and resellers to meet us for international assignments. We expect 50% revenue through International Sales by 2020.

What are your latest products that you have recently launched? Prime Food High Speed Door and Prime Freezer High Speed Door are the latest products launched by us. They are designed and developed especially for Food and Cold Chain Industry.

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Prime Food High Speed Door complies with FDA norms and support Wash-down application. The door curtain is made of PVC with a provision of Vision Window (Transparent PVC Section within a door curtain). FDA approved Polystone® M-Natural guides are provided as standard with Food Doors. The Prime Food door us easy to clean, disinfect and prevents dirt to maintain hygiene. These doors are also resistant to spray water and insensitive to cleaning agents. All structural components that may come into contact with water are either made of Stainless Steel or have a corrosion proof finish. Prime Freezer High Speed Door is designed specifically to provide a perfect solution where temperature control is critical and safety concerns are at a premium. Internal heating system provided within the guide prevents ice formation even during intensive cooling. The door curtain is constructed with double curtain containing insulation. This door is suitable for both positive and negative temperature, operating temperature range for Freezer Door is +5°C to -35°C.

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Focus: Indian Tyre Industry

Indian Tyre Industry: Flattish Over the Last 3 Years

he Indian carbon black market is projected to grow at a CAGR of 8.78% by the end of 2026, according to the latest report from Research and Markets. The report says that expanding manufacturing facilities of tyre manufacturing CoS coupled with growing demand for tyres in automotive industries is anticipated to further drive leading tyre CoS to expand their production bases and boost sales of carbon black in India in the coming years. Implementation of anti-dumping duty on carbon black imports on offending countries by Government of India too would boost the carbon black market. Carbon black is a pure form carbon majorly used as reinforcement filler in rubber goods, tyre, plastics and other products manufacturing industries. World demand of Natural Nubber (NR) including non-ANRPC (Association of Natural Rubber Producing Countries) member countries, grew nine per cent to 9.637 MTs during the first nine months of 2017 compared to 9.550 MTs recorded during the same period in 2016, said the latest Natural Rubber Trends and Statistics report by ANRPC in Sep’17. This is based on actual figures up to Jun’17 and preliminary estimates for July 2017 to Sep’17. Interestingly, China-the largest consumer of NR- has recorded a fall in consumption at 1.8%, while consumption in India grew by 2.5% on a year-on-year basis. Countries like Vietnam (11.1%), Thailand (7.7%), Indonesia (5.2%) have reported increased demand for NR. Meanwhile, the demand in Sri Lanka fell by 16.2%. World consumption of NR, including non-ANRPC member countries, is expected to grow by 126,000 tonnes to 12.805 MTs during 2017. This figure is including of non-ANRPC countries based on actual figures up to Jun’17, preliminary estimates for Jul’17 to Sep’17 and forecasts for Oct’17 to Dec’17. Based on preliminary estimates, a shortfall of 397,000 tonnes of NR world supply is estimated during Sep’17. The deficit in supply is anticipated to be lesser than 300,000 tonnes in Oct’17, ANRPC report said.

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Focus: Indian Tyre Industry

ndia’s Position

Indian tyre industry is expected to post robust growth figures over the next few years, spurred by the growing passenger vehicle, scooter and utility vehicle segments of the automotive industry. With already 12 global players churning out 140 lakh units per annum, it has emerged as one of the most competitive markets in the world and with the emergence of new technology, ultra-modern production facilities and availability of raw materials, the sector is poised to grow further. It is been a mixed bag as far as the performance of the tyre industry in the past fiscal is concerned. In the CV segment, the growth has been lukewarm and not up to the expected levels mainly due to the slowdown in the OE segment. The replacement market has not come up to the expected levels because of many uncertainties and policy changes (by the government) during the course of the year. But if we see the PV segment, there the growth has been in double digits. 2-wheeler segment, especially motorcycles, has not been performing the way it is doing earlier. While Tractor segment saw a double digit, OTR segment has been on the negative side. The tyre industry is directly dependent on the state of the country’s economic growth and GDP. We hope that the second half of this fiscal would be a better than last year because motorcycle and commercial segments would be witnessing an upturn in volumes. The retail sales got impacted as the majority of sales are happening through cash transactions. What happened in our favour was that some imports from Chinese CoS by small-time traders inadvertently dropped. Moreover, the govt was also losing revenue as these unorganised traders and importers were not paying their legitimate taxes and duties. So demonetisation has its upsides and downsides. The tyre industry has been a classic case of inverted duty structure where the duty on the principle raw material i.e. natural rubber is 25% and the duty on the finish products i.e. tyres is 10%. Furthermore, natural rubber’s imports are imperative since it is in short supply in the domestic market. So a prudent govt policy is to encourage value addition in the country by giving access to raw material or intermediates at low rates of duty and keep the duty levels higher for the finished products. We were hoping that this is rectified in the current budget but it didn’t happen. The industry is concerned as well as disappointed that the long impending duty inversion anomaly for the tyre industry is not getting addressed on priority basis. Indian tyre industry is somewhat flattish over the last 3 years for various reasons. Overall, the industry topline has been pegged at approximately Rs. 55,000 Cr. By 2020, the topline would be worth over Rs. 60,000 Cr. Around 140 lakh tyres are produced per month out of which nearly 15% is for the export markets.

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As of now, at least 4 of the homegrown firms figures among the top 30 global tyre CoS. Furthermore, the axis of tyre production is shifting from developed markets to emerging ones like India, China, etc. Asia is going to be playing an increasingly dominant role as the global tyre producers in the world. Nearly Rs 36,000 Cr has been invested by various ATMA members to either set up Greenfield facilities or expand the existing ones for capacity expansion. India will also find its right place in the pecking order because we have a long and deep rooted history of tyre manufacturing dating back to the 50s era. Going forward, India will definitely be among the top 5 nations of tyre production.

Two wheeler tyre market

The boom in the 2-wheeler industry in India has prompted tyre makers both domestic as well as international, enter the fray, giving competition to traditional 2-wheeler tyre makers. The segment is now getting crowded and 2-wheeler tyre majors, such as MRF, TVS Srichakra and Ceat, are scaling up capacity to stay ahead in the market. A recent study prepared by ICRA, the credit rating agency, says that the demand for two wheeler tyres in India is expected grow between 6%, 8% in the next 3 years (FY2019) on demand from both replacement and OE segments. Demand for motorcycles and scooters is expected to grow by 6% and 11% respectively in the same period. According to the ICRA report, the 2-wheeler tyre segment outperformed the overall industry volume growth in recent years. The 2-wheeler tyre segment volume has increased by CAGR of 13.1% on the account of robust scooter volumes in the period of FY2014 to FY 2016, comparing the tyre industry’s growth of 7.5% in the same period. The dominant 2-wheeler tyre makers such as MRF, Ceat and TVS Srichakra, which own around 90% market share in 2-wheeler tyre segment, are expected to lose their shares due to the new entrants. The 2-wheeler tyre segment had been steady performer for the last several years now and is expected to witness consistent growth going forward. Anticipating the growth in the segment, Apollo Tyres is already planning to set up a 2-wheeler tyres and pick up truck tyres manufacturing plant in Andhra Pradesh. The Co. has signed an MoU with the Andhra Pradesh govt for the plant, for which it will invest around Rs 5 bn. Currently, the Kanwars-led Co is out sourcing 2-wheeler tyres from the third party. According to a media report, Apollo Tyres currently produces 2,00,000 2-wheeler tyres a month and it will reach 2,50,000 per month by the end of this year. The inorganic growth has given an upper hands to JK Tyre among the recent entrants. This year JK Tyres acquired Cavendish Industries’ three plants, located at Laksar, Haridwar, which have 10 million tyres per year capacity, at Rs 22 billion. In its second quarter financial results, JK Tyre said operation profits grew up 24% on higher sales

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of 2 and 3 wheeler tyres. OTR major BKT and the world’s largest tyre company Bridgestone forayed into the segment in August this year. As a part of diversification process, BKT launched two new 2-wheeler tyres in India to gain a 10% of the 2-wheeler tyre market by 2019 on the demand growth for 2-wheeler tyres from the market. Bridgestone India launched its 2-wheeler tyre under the brand NEURUN for motorcycles and scooters. 2-wheeler is the most dominating segment in the Indian automobile market in terms of volume sales. The 2-wheeler category is growing at CAGR of 8.5% in India with an estimated 150 million number of 2-wheelers on the road which is testimony of the huge potential of tyre demand. It is a growing segment, which has led to the entry of newer players, including Apollo. TVS Tyres is already planning to scale up production to 2.5 million units per month, from its both plants- Madurai and Pantnagar, by Dec this year to meet the growing demand. To scale up, production capacity at its plants, TVS Tyres has invested in a capex of Rs.1.6 billion this year. Ceat has also doubled its sales in last four years, from 2.5 lakh 2-wheeler tyres a month to 1.2 to 1.3 million tyres a month. To gain the market leading position, it has increased capacity and added a new plant in Nagpur for about Rs 4 billion, which came on stream early this year. French tyre maker Michelin also too intends capture a double digit market share in near time. Michelin claims that it is the only company in India which offers a complete range of 2-wheeler tyres, especially tailored for the Indian roads. The company’s sales have been doubled in last 3 years in India and aims to capture a 10% market share in the Indian 2-wheeler segment. The 2-wheeler segment is not only seeing the new entrants but also growing demand for radial and technical advanced tyres. The 2-wheeler tyre category is at an interesting stage of market evolution. Tube type tyres are giving way to Tubeless, and Radial motorcycle tyres are beginning to mark their presence. The volumes in the category are in any case exceedingly large. Currently, Michelin is importing high performance 2-wheeler radial tyres, while 2-wheeler bias tyres of Michelin are being manufactured by TVS Tyres. However, the French tyre maker does not have any plans to have own manufacturing plant to produce 2-wheeler tyres. The demand for the 2-wheeler tyres would be driven more by the rural market than the urban. With higher capacity motorcycles getting introduced quite frequently in India, the demand for radial tyres for them would go up at a rapid pace.

Technology Trends

The tyre industry will be faced with serious tech challenges to meet the req. of regulations for env. protection, along with the demands from automobile industries and replacement customers to enhance the ||www.constructionmirror.com/net||

comfort, safety, economy, durability and stability with minimum variability We often say, we are living in an age of technology because of the fast changes taking place in the world thanks to technological interventions. If we scan through history, most of that we see as tech achievements were created in the past 300 years. But the pace of this evolution is ever increasing with the addition of each new invention that becomes the enabler for further changes. Industrial revolution that began in UK triggered many technological innovations. This was a transition to new manufacturing process which included change from hand production methods to machines, development of new chemical manufacturing and iron production process, improved efficiency of water power and steam power etc. This period also saw development of machine tools and rise of factory systems. Textile industry was the dominant industry in this period in terms of employment, value of output and capital invested and in using modern production methods. Techno-economic progress continued with the increasing adoption of steam power in transport in railways, boats and ships. Steam-powered factories started large-scale manufacturing of machine tools. Industrial revolution marked a major turning point in history, as almost every aspect of daily life was influenced in some way. But nothing influenced the way human beings live, more than the progression that happened in the field of transportation, from steam engine to internal combustion, jet propulsion to the now trendy battery-powered vehicles to the fuel cells to the not-so-distant solar powered ones. Seemingly, the most difficult thing now is to make predictions about the future, as it stands every possibility to be outpaced by reality. Enhancements of computing capability and advancement in electronics have become key enablers in technological devâ&#x20AC;&#x2122;s today. They have been constantly redefining the way we are living and communicating. Automakers have been working hard to use these latest technologies available in their vehicles. Ten years ago, cars with built-in Bluetooth, navigation, and parking sensors were seen only in top luxury slot but now even the most affordable cars have these options. Looking into the future,it is almost certain that autonomous driving will be a part of our life. We have seen demonstrations from Audi, Google and the likes doing hundreds of miles safely without a man on the driver seat. Nevertheless, these projects look like the projects of distant future today, but in reality they could come much sooner as we already have many autonomous functions in our vehicles under the label of driver-assist features such as lane keep assist, adaptive cruise control,

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self-braking systems etc. By 2021, the first production self-driving vehicle should be available for sale. In 2014, Tesla founder Elon Musk said fully autonomous cars should be on the road in five to six years. And visionaries in Ford, Google and other CoS have made similar projections. The challenge, of course, will be communicating to the other autonomous and human-piloted cars on the road. While autonomous driving will be a lot easier on highways, the same will look extremely challenging on a busy urban road. In spite of great leaps we have seen in recent years, we tend to believe that fully autonomous vehicles will run only on highways by around 2025 with drivers needing full control only around busy local or urban streets. We cannot discuss developments in automobiles without a concurrent advancement in tyre technology. Though evolution of tyre had only a few milestones in the past, the same is poised to achieve a few of them in quicker succession now. The technology evolved from solid wheel to spoked wheel to pneumatic tyre by 1847. The first practical pneumatic tyre came in 1888 in cross ply fabric technology. Further improvement happened in ply material as it moved from cotton to stronger and lighter synthetic fibers such as nylon and polyester. Next milestone in tyre technology was the radial technology and the first steel belted radials were introduced in 1946 by Michelin. Since then along with the improvements in automobiles, tyre technology also improved in terms of performance such as speed capability, load bearing capability, durability, mileage and fuel consumption in rolling. As far as performance of tyres is concerned, inflation pressure still plays the most vital role and this very fact has made the tyre inflation the potential source of problems also. This realisation has led to further research on preserving right inflation or even running the tyres without it. Equipment such as TPMS are to ensure right inflation in tyres whereas technology such as Run-flat support the tyre to run without inflation. Looking to future, tyres will get a lot leaner for efficient running and will be embedded with sensors and chips to capture dynamic information for driving assist systems in automobiles. As the tyre will remain the only physical contact of vehicle with the road, the transition of motor vehicles from current to autonomous operation will have greater implication for tyres in terms of design and operational suitability for safe operation. One obvious need will be niche products in tyres. As the manufacturing is moving to industry 4.0 environment, intelligent production systems in factories will help in the production of tailor-made products in future. Vehicle OEMs may

use narrower but large diameter and lighter tyres for the advantage of placing sensors and lower rolling resistance. Run-flat tyres may become standard fitment to avoid potential safety hazards from improper or loss of inflation. Regulations, intended to ensure safety and environment protection, will be one of the major drivers for the evolution of tyre industry in future. With the penetration of alternative power trains, role of tyres in safety and emissions will receive increasing attention from all stakeholders. Reducing tyre weight without compromising performance will encourage serious research leading to findings of alternative materials and new processes. With autonomous driving becoming common, the tyre will become one of the key critical components providing real-time data input to aid safe and fuel-efficient driving. Even non-pneumatic tyre technology will gain popularity if it can provide necessary cornering forces required in vehicle operation. If we examine the attributes of tyres in future to help in autonomous driving, the following is the order of importance: Durability and reliability: Tyre being the most vulnerable link in the chain of hardware, durability and reliability of tyres will be the first priority in autonomous driving. Traction: Complete control is a must in autonomous driving and traction provided by tyres cannot be compromised. Sensing: Tyre to function as an Intelligent Sensor. With sensors embedded, they are to be durable and accurate and will be harvesting energy from tyre deformations. Compatibility: Compatibility with vehicle control systems; conforming to labeling regulations. NVH: To ensure comfort on lighter vehicles. Rolling resistance: To support fuel/ energy efficiency of the vehicle. Aerodynamics and tyre size: Tyre technologists should be ready to create niche products with dimensions that will optimize aerodynamic resistance in rolling at the same time ensuring the required load carrying. Handling and steering: With drivers not on seat, these aspects will take a lower priority as majority of the control is by intelligent driving systems. The tyre industry will be challenged seriously to meet the requirement of regulations for environmental protection, along with the demands from automobile industries and replacement customers to enhance the comfort, safety, economy, durability and stability with minimum variability. There will be major manufacturing challenges to minimize cost of conversion with greater demand for flexibility. The CoS that have strong R&D capabilities to meet such challenges will only survive and make a mark in the blueprint of industry.

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Focus: Lubricants Sector

Indian Lubricants Sector: A Brief Review

conomic, political, and regulatory forces are reshaping the dynamics of lubricants supply and demand throughout the world, and opportunities to grow this business continue to emerge. India, in particular, has emerged as a key growth market, as well as a source of competitively priced lubricants. Strong growth in the Indian automotive, power and engineering sectors is creating new market opportunities for lubricants manufacturers. In the automotive sector, consumers are migrating to better quality vehicles and increase in demand for 4 stroke motorbikes, tie ups with original equipment manufacturers using higher grade lubricants; this is benefiting multi-grade lubricant products with strong

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brand recognition and wide distribution. Lubricants are used to reduce friction between moving parts, thus resulting in lower wear and tear. In many machines, lubricants also play a role in cooling, rust prevention and help to avoid deposition of solids between closely fitting parts. Liquid lubricants are most commonly used. Lubricant, a blend of base oils & performance enhancing additive as required by engine, gearbox and other applications areas. Based on application, lubricants are broadly classified as automotive, industrial lubricants. Engine oil, gear oil, greases and hydraulic, transmission fluid are the products under automotive lubricant segment. Industrial

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lubricants comprise process oil, general industrial oil, metalworking fluids, industrial engine oil and greases. Automotive lubricants account for around 47% of the lubricant usage in India; industrial lubes and process oils together account for the rest. OEMs, petrol pumps and retail trade are major channels in the domestic automotive lubricants market. Petrol pumps and retail trade account for around 90% of the total automotive lubricants sale, of which retail trade accounts for a major share of around 74%. Retail trade comprising wholesale distributors, auto spare shops, service centres, lube oil shop and supermarkets is considered a profitable model among the distribution channels. Overall lubricant consumption in India is projected ||www.constructionmirror.com/net||

for commercial automotive lubricants declined in 2013, 2016 due to the retarded economic growth, as well as its impact on such sectors as logistics, construction, mining, agriculture. In India, more than half of the commercial automotive lubricant market is controlled by nationalized oil Cos. Industrial lubricants is the largest market segment in India, with more than 54% of the total market. Power generation, chemicals, automotive and other manufacturing, railways, marine, and metals are the leading end-user industries, accounting for nearly 80% of industrial lubricant consumption. India is a huge market for process oils as well, with 53% of the overall industrial lubricant demand. Rapid expansion of the power generation, distribution infra has also created a strong demand for transformer oils in India. Industrial engine oils (including marine and railroad), metalworking fluids, hydraulic fluids are other important product categories. The per capita lubricant consumption in India is quite low compared to developed countries. However, a comparison with other developing countries like China, Indonesia reveals significant potential in India for growth in lubricant consumption.

to grow at an annual rate of 2.5% over the next 5 years, according to Klineâ&#x20AC;&#x2122;s report. It is expected that the consumer segment to grow the fastest at a projected 6.6 % per year, while the commercial, industrial lubricant segments will exhibit a moderate growth of 2.3-1.6 % per year, respectively. In general, overall subdued economic growth of the Indian economy will continue to affect the growth of commercial automotive lubricants, although economic growth is expected to pick up post-2017. Ranking 3rd after the US, China, India remains one of the most imp lubricant markets. Historically, India has been one of the fastest growing major economies. However, since 2010, the economic growth rate has ||www.constructionmirror.com/net||

successively dropped from 9.3 % in 2010-2011 to about 5.3 % in 2013-2014. Automobile production in India has experienced a strong growth of 14 % from 2007-08 to 2012-2013 though seen a dip in 2016-17 period due to demonetisation and GST. Like most Asian countries, India has a large percentage of 2-wheelers, accounting for more than 3-fourths of the total automobile production in 2012-2013. India is the worldâ&#x20AC;&#x2122;s 2nd-largest manufacturer of 2-wheelers. Consequently, motorcycle oil is the largest product category in the consumer automotive lubricants segment, with about 60% of consumer automotive lubricants. Overall, consumer automotive lubricants account for 13% of the total market. The market

India occupies 5th position in the global lubricants market after US, China, Russia, Japan. Indian lubricants market which was a monopoly of public sector oil marketing CoS, has witnessed the entry of MNCâ&#x20AC;&#x2122;s and domestic pvt players post liberalization. Over the recent years, consumer awareness about usage of lubricants has improved leading to an increased demand for high performance products. The domestic lubricants industry is witnessing stiff competition among players leading to an overall shift in perception of lubricants market from a volume driven market to a value driven market. Core industrial sectors like cement, coal, steel, engineering, sugar, marine, defense, railways, fertilizer are some of the major end-users of industrial lubricants. Indian Oil Corporation Ltd., Hindustan Petroleum Corporation Ltd., and Bharat Petroleum Corporation Ltd. are the three leading PSU in lubricants sector who account for around 60% of the lubricants market.

Market

The market is fragmented with over 22 big and

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Focus: Lubricants Sector small manufacturers and with the spate of merger and acquisitions only a handful of big companies enjoy a major market share Companies are adopting a more customer-oriented approach where they likely to focus on creating brand awareness through print and visual media. The marketing channels for automotive lubricants in India consist of the following, Petrol Stations; Wholesale Distributors; Lube Oil Shops; Auto Spare Shops; Authorized Service Stations; Garages; Rural & Agricultural dealers. Till recently, the Indian consumers linked filling of lubricants to that of petrol & diesel in petrol stations. With the advent of deregulated market scenario & fierce competition, efforts are being made to position lubricant as a high involvement consumer goods. Recent deregulations in the lubricant market have promised many new opportunities for the private lubricant manufacturers. Private participants will also gain a presence in the market and hence there will be competition between participants that will ensure the growth of the sector. The monopoly of the public sector holding will no longer exist. Private player like Reliance, Essar, Sheel are also selling their products through petrol pumps. Companies like Gulf, Valvoline, Veedol, Elf, are also making their presence felt in the market . In the couple of years, the industry is going to witness sea changes.

Customer Buying Behavior Factors affecting the buying behavior

Brand Awareness: With lubricants becoming a fast moving consumer good and the brand preference of the consumers witnessing a change, brand image plays a key role in affecting the consumer’s decision to buy a Brand Awareness is a major issue in lubricant sector. Price Sensitivity: The transformation from the administered pricing mechanism to free pricing has increased the importance of providing cost effective product to the users. Thus product costing and competitive pricing are key factors affecting the market. Purchase Locations: Purchase form stockiest, dealers, distributors, mechanics, and retail stores offered to the storeowners and mechanics prompt them to purchase a particular brand. Lube oil changing habits: The period at which the lubricant is to be drain varies from customer to customer. 108

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Technology awareness: Very few customers are aware about the changing technology They are influenced by some advt, info from mechanics regarding using advanced technology lubricants.

Challenges

Talking about long-term challenges, including electric cars, although the role of lubricants won’t reduce, different lubrication challenges will emerge. Transition to electric vehicles will need companies to focus on transmission oil, brake fuels and other oils, and not necessarily engine oil. Apart from the engine, lubricants are used in manual and automatic transmissions, wheel hubs and many other underchassis applications. Some of these, like engine oil and transmission oil, require periodic changes, whereas many others, especially greases, are filled for life. The quantity of oil consumed depends on two things. First, the oil sump capacity, and second, the oil drain interval; both of which are design considerations for passenger car OEMs. If we talk about the internal combustion engine, a diesel engine application is more challenging compared to a gasoline engine in terms of contamination due to the nature of the fuel. However, lubricant technology has advanced to a level where drain intervals and hence oil consumption is optimised to provide the most effective lubrication for a car. Between diesel, petrol, there is no significant difference in lubricant consumption over lifetime of a vehicle. A battery-powered car consumes a lower amount of lubricants during its life-cycle compared to a typical internal combustion engine car. With the transition to electric vehicles, while the role of lubricants can’t be said to decline, but it will mould itself. It will come down to transmission oil, brake fuels and other oils, and not necessarily engine oil. More electric vehicles on the road will increase the consumption of electricity, which, in turn, increases the consumption of industrial lubricants. An electric car doesn’t have the internal combustion engine, which is the major component that requires lubrication. However, these vehicles will continue to have gearboxes, axles, wheel hubs and other lubricant and grease points, although with slightly different lubrication challenges. Solid lubricants, per se, have limited applications. These are generally used to manufacture greases to bear more shock loads. We have such greases in our portfolio, which are specially meant for off-highway applications, crushers, etc. Solid lubricants are also used as friction modifier additives in engine oils with extremely low viscosities to protection against wear, while contributing to better fuel economy. Adverse oil price and base oil pricing scenario: Raw material cost fluctuation would impact margins if retail pricing is sticky. This would include additives and packaging. Currency risk: Since base oil and additives are dollar

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and retail products are rupee denominated, currency risk is inherent in the business with a depreciating Rs/ USD being adverse on margins. Competitive risk: Predatory and destructive pricing by competitors, crowding of new players. Intense promotional activities can lead to a jump in advertising and other expenses. Other risks: Plant outage, industrial relations, adverse taxation, JV and related party risks. Higher drain intervals: Structural decline in lube consumption due to efficient and smaller engines and long drain oils by lubricant players. Electric vehicles: A longer‐term risk as electric engines would have minimal lube consumption with almost nil engine oil usage. However, it is premature at the moment considering the global reliance on hydrocarbon‐based engines. Battery making is a future diversification option

Indian lubricants sector

Indian lubricants sector is a 2.8mmtpa (3.1bn litre, conversion of 1.11x) market with the automotive segment holding 42% volume share, industrial 23%, transformer & white oils 23%, process oils 8%, and greases 4%. Market has over 30 players, both PSU and private, domestic and industrial, integrated and standalone. Castrol’s estimates that it commands ~55% market share along with PSU OMCs (IOCL, BPCL, HPCL) in the bazaar trade, 20% is with MNCs (international players like Total, Shell, Mobil, Valvoline, Motul), and 25% is with other private players (including Gulf/GOLI, Tide Water Oil, Savita, Raj). Automotive and pure industrial lubricant (excluding transformer, process oils, greases) market is dominated by the PSU OMCs with an almost 60% market share, followed by Castrol at 12%, GOLI and Tide Water Oil at 4% each, and over 20% by remaining players. However, over the last 5‐6 years, larger players lost market share while smaller ones gained due to base effect.

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Focus: Lubricants Sector

Source: Industry, PhillipCapital India Research

In the last five years, the Indian lubricants market saw ~3% CAGR in volumes to 1.7 bn litres. Major players IOCL/HPCL/Castrol saw total market share reduce to 30%/15%/14% in FY14‐15 from 35%/20%/18% in FY09, while BPCL/Tide Water/Gulf maintained their positions at 11%/4%/4%. However, other smaller players saw their shares doubling to 20% from 10%. Volume growth is likely to increase to 5‐6% yoy, driven by growth in vehicle sales, high petrol/ diesel consumption (pointing towards increasing vehicle runs and lube‐change cycles), drain intervals in CVs/passenger cars nearly at optimal levels, and recovery in manufacturing and mining sectors under the industrial space. The automotive segment has a 60% share of total lubricants sales; of this 50‐60% is CVs, ~10% is tractors, 20‐25% is passenger cars, and 15‐20% 2-wheelers. The split between OEM and bazaar trade (replacement demand) is 20% and 80%. Over the last 5‐6 years, drain intervals in CVs/ cars have almost doubled to 36,000/10,000kms from 18,000/5,000kms earlier, mainly due to a decrease in engine size (which lowers volume requirement and increases consumption efficiency) and high quality oils 110

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that last longer. However, this improvement has nearly hit a physical peak now. Lubes also have a definite shelf life and are affected by the environment. Even though some lube players claim to have oils that have 70‐80,000 kms drain intervals, engine makers have not approved them. Hence, these claims are unsubstantiated and not followed by transporters/fleet operators. In reality, even if a vehicle owner needs a change after 36,000kms, oil is usually changed after just 20,000kms; this is because the prescribed drain interval is only if ideal conditions prevail (45km/hour speed, constant operation, no elevation, and no idle running). It is actually on a timescale; drain interval needs to be measured. This way, intervals would be different for different vehicles. Passenger cars and 2‐wheeler oil sales have seen a steady growth rate, which is likely to continue with new‐generation vehicles. OEMs will remain an important mode, though with new multi‐brand service centres, second‐hand car shops and organised taxi fleets, bazaar trade would get fillip. Diesel engine oil (DEO) demand depends on the CV cycle. Over the years, due to elongating drain intervals, the CV segment saw a fall in lube usage. However, with this elongation peaking, volumes are likely to recover somewhat. Ahead, this segment would depend on an industrial recovery and manufacturing revival, which would push up logistics activity. Tractors have done well for a while now, with higher penetration and usage, and increasing number of high horsepower haulage/construction tractors. Currently, market share for Castrol/PSUs/Gulf/Tide Water/Others in the automotive segment is 22%/30%/7%/7%/34%. For Castrol, it has declined from 25%, 5 years ago, while for PSUs, it has increased from 22% earlier. Industrial segment (40% share) target market can be broken up as 25% power, 20% chemicals, 10% mining, 10% automobile manufacturing, and 10% metals. Of this, mining currently is almost nil as operations in the eastern mining belt have virtually stopped. Some signs of recovery are visible; with state governments allowing mining restarts. Hence, mining could be a significant volume driver in the future. In manufacturing, metals sector is seeing an uptick, particularly steel. Specialised applications like metal cutting and honing are gaining traction. These applications require premium oils that could be both volume and margin accretive. OEM tie‐ups in specialised industrial applications (machines) is a strength for players. MNCs have an edge on imported machines with pre‐approvals due to global tie‐ ups; hence, players like Castrol are targeting these segments for volume growth. With decline in base oil prices, the margin scenario has improved for all players. The movement in prices would depend on oil prices. However, the base oil market remains well

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supplied with no global shortages. Lube players did not cut prices, as retail pricing is sticky. However, they increased discounts and schemes to drive sales. For distributors, companies offered volume discounts while for retailers, cash‐back coupons. For customers, free offers and discounts were introduced. However, these are highly elastic and dependent on raw material pricing. Many of these offers are realised at the end of the financial year. Premium product suppliers, in fact, do not want prices to fall, as this would affect their products’ perception. On an annualised basis, margins are likely to be maintained even if there is some recovery in oil and base oil prices. Personal mobility (cars and two wheelers) is a high‐margin business and lube players will continue to innovate premium products to improve realisations and margins in this segment. New‐generation oils are focussing on clean technology to complement environment friendly fuels like Euro‐5 and 6. Among vehicle types, 2‐wheeler command the highest margins at ~25%, while passenger cars are at 22%, and CVs at 15%. The corresponding pricing is Rs 350/litre, Rs 300/litre, and Rs 300/litre approximately. Bazaar trade entails the highest premiums, followed by OEM service centres where both dealer margins and royalty are higher. Factory‐fill is the most unattractive segment, as automobile companies basically off‐take at nil or even negative margins if raw material prices go up in the intermediate period. As vehicles come out of the OEM market due to warranty expiry and cheaper alternatives, bazaar sale of lubes grow and margins improve. Lube products are primarily homogenous among manufacturers, as specifications are uniformly made by agencies like API (USA) and JASO (Japan). There are no significant technological entry barriers, as it is a blending process where base oil, additive suppliers are universally accessible. Perception and brand power plays a main role in customer preferences. Hence, lubricants is a marketing‐driven business. Indian lubes are similar to global grades, though a new technology would take a year or two to transfer. Currently, the Indian base oil market is Group‐2 dominated. Only a small share of old vehicles, taxis, and dump trucks use Group‐1‐ based lubes. Group‐3 lubes, on the other hand, are increasingly used by new generation vehicles (~20%) – their high sheer strength and extreme thinness is ideal for small compact engines; they does not lose their properties at different temperature ranges. While Group‐2 lubes are priced at nearly Rs 42/litre, Group‐3 would be priced at nearly Rs 50/litre. In India, base oil is manufactured by HPCL Mumbai Refinery, IOCL Haldia Refinery, CPCL Chennai Refinery, and BPCL Mumbai Refinery. Mostly Group‐2 is available in India, though Haldia has started a Group‐3 line. HPCL’s Mumbai Refinery may also be capable of ||www.constructionmirror.com/net||

producing Group‐3. Private players import base oil from Iran/Middle East (Group 1 and 2) and South Korea (Group 2 and 3). Additives are highly priced and very specialised. Only three companies supply these in India. Lube players hoard base oil if they expect prices to rise. They have their own storages while third‐party tankages are also available in ports, terminals, etc. In the Indian market, below‐the‐line promotion activities are very important as channel partners (distributors, dealers, retailers, and garages/ mechanics) are key drivers. It takes years to build a brand at the grass‐ root level. Companies have to create goodwill. Strong players such as Castrol, Gulf, Tide Water, and even PSUs invest heavily into this by being in constant touch with their partners, giving them incentives and gifts, and organising workshops and meets. Advertising is also important, but it alone will not work. Many MNCs (Mobil, Shell, Motul) have not been able to expand due to lack of focus below the line, concentrating only on ads. Castrol has a definite first‐mover advantage as it developed the bazaar trade initially and is an old player. Despite lower margins, retailers have max Castrol products considering customer recall and preferences. Castrol should retain this advantage and therefore, any recovery in the lube cycle would first percolate to Castrol. Gulf is also very aggressive. However, it is equally focussed on advertising, as it wants to increase brand recall among target customers such as 2‐wheelers. In CVs, Gulf has a natural advantage due to its Hinduja connection in Ashok Leyland where it is an OEMs. Against Castrol’s 4‐5% dealer margin, other players offer 7‐ 8%. Retailer margins are higher at 15% due to lower volumes. Though less attractive, OEMs are required; this pushes the brand in the bazaar trade and no retailer likes to stock products that do not have OEM approvals. This is the case with customers too. PSUs share of sales in fuel stations have declined significantly. Currently, the share is only 10% with 90% being bazaar trade. Among OMCs IOCL continues to remain a market leader with significant bulk industrial exposure (like railways) and lowest prices, but BPCL and HPCL have become aggressive in recent years. In any case, PSUs will always be behind other players in decision making due to their administrative and reporting structure. Hence, they are not quick in their pricing and scheme decisions. OEM approvals generally take 1‐2 years. However, MNCs have pre approvals due to global tie‐ups. OEM oils are generally genuine oils, which are branded in the name of the automobile manufacturer. Co‐branded oils have the name of both parties. Western India market is the most lucrative, followed by southern, then northern, and finally eastern. Castrol is strong in western and northern markets, while it is Gulf in the south (due to the Ashok Leyland legacy). Elf is strong in the north. Tide Water is also strong in the west. Global markets vary; developed countries are mostly organised; sales there are through supermarkets too, and servicing is mostly done at authorised centres. Western markets have grown slower (1% CAGR) while China is the fastest growing. Synthetic oils: Group‐3‐based oils are marketed as synthetic/ semi synth. In reality, synthetic is not mineral‐based; it is a compound named polyalphaolefins marketed by Mobil and Chevron. It is almost 7‐8x pricier and is used in super luxury/ ||www.constructionmirror.com/net||

premium sports/F1 cars. Brand power: Castrol remains at the top across the chain. Gulf is #3 in terms of brand recall as per a survey. New players: New players are not able to make a dent on the broader market, yet they are profitable based on specific target markets; like Shell for aviation lubricants, Mobil for Marine, and Valvoline for Cummins’ generators. Conclusion Automotive lubricants comprise of primarily engine oils (80% share) with gear oil, transmission oils, and grease occupying smaller proportions. Engine oils are broadly classified as 2W or motorcycle oils (MCO), passenger vehicle oils (PV), CV oils (CVO/DEO), and tractor oils (also diesel). 2W and PV, which together form the PM segment, mostly comprise of petrol engine oils with diesel forming only a small part. CV and tractor oils are mostly diesel. The size of the Indian market in FY16 was 1.3bn litres. CVs comprise most of automotive lube consumption – at 60%+ – followed by tractors at 12%, 2Ws at 10%, PVs at 5%, 3W at 5% and others (like agri pumps and gensets) having 7‐8% share. In the last 5‐6 years, the automotive segment is estimated to have grown by 3‐4%.

In the automotive market, Castrol is the leader with 20%+ market share followed by the PSU OMCs with a 30% combined share, GOLI and Tide Water Oil at 7% each, Total/Elf with 6%, and others having a 30% share. Over the last 5‐6 years, Castrol and Total have lost market share against flat to gains by others, with PSU OMCs posting the biggest gain due to their low base and focus on the bazaar segment. These figures, as per our checks, include OEMS and factory‐fills to some extent. Bazaar trade is defined as direct retail sales in the replacement market and excludes fuel pump sales, which are dominated by the PSU OMCs. Currently, 80% of the automotive lubricants are in the replacement market – of which only 20% are fuel‐ pump and non‐bazaar sales. Traditionally, fuel pumps used to have higher sales, but with the advent of private competition, auto lube business took on a more FMCG‐ type character and sales tilted to spare‐part shops, lube shops, and garages/workshops. PSU OMCs have themselves also started focussing more on bazaar trade with only transporters and fleet operators being lube customers in fuel outlets. Spare‐part shops comprise a bulk 50% of bazaar trade, followed by dedicated lube shops and garages/ workshops at 20% each. Castrol is the market leader in the bazaar segment, with 21% market share, followed by IOCL at 15%. Castrol separately states a market share comprising of it’s primary focus, the urban automotive bazaar market, where it has grown over the last 5‐6 years – to 22%+ from 20%. The company’s PM market share is a significant – 30%+ (MCO: ~30% and PCMO: ~40%) while for CVO it is below 20%. GOLI has estimated its market share at 7%+, which include 8% market share in CVs, 5% in tractors, 9% in 2W/MCO, and 4‐5% in PVs.

The industrial segment is dominated by PSUs and a different set of private players in segments such as transformer oils and process oils. The industrial or non‐automotive segment, with a 1.8bn litre size, comprises of sectors such as power, oil & gas, mining, metals, industries, road construction, marine, railways, and aviation etc. While general industrial lubricant occupies 40% share in the industrial space, transformer oil used in the power sector is also a large segment with a 40% share. Process oils and industrial greases have a 14% and 7% respectively. Almost 30% of industrial oil is hydraulic oil, followed by 20‐25% of industrial engine oils. Cutting oils are estimated to have a 20‐25% share. IOCL is the market leader in industrial lubricants with a market share of ~20% followed by Apar Industries at 15%, Columbia Petro at 10%, Raj Lubricants and Savita Chemicals at 8% each, HPCL at 6%, Shell at 5% and so on. The aviation lubricant business is populated by MNCs due to global OEM approvals and strict norms, while marine business also has a sizeable MNC presence though Indian companies are entering it. Volume‐ wise, Castrol’s industrial exposure is 15% while GOLI’s is 15% if pure industrial is considered as

factory fills and tender business, though part of the B2B category are automotive in general. Industrial Lubricant Market is projected to display a growth represented by a CAGR of 3.03% during 2017 - 2022, chiefly driven by the rapid growth in industries and automotive sector. The new emerging industries like Mining, Marine, etc. along with the increase in manufacturing companies, both in developed and developing countries are driving the demand of high quality lubricants due to the growing presence of synthetic and bio lubricants in the market. Rapid industrialization and increasing demand has raised the production rate in almost every manufacturing company, globally. Industries are now therefore more concerned with the maintenance of machinery to provide better quality product. This has escalated the demand of lubricants. Moreover with the need of enhanced lubricants to work under extreme conditions, its new technology will drive the market in coming future. Analysis of the market dynamics reveals that automotive lubricants market is the competitive market with larger powers of the intermediaries on supply side. Evaluation of industry structure points to ever growing bargaining power of the suppliers. However, effective management of these competitive forces could lead to strategies for deeper penetration of reputed lubricants brands into rural markets. Further, consumer buying behaviour shows that there is a need to put efforts for spread of awareness amongst consumers regarding product differentiation.

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G uest Article BKT Earns Sqep Silver Award From Caterpillarand Homologation of Two Earthmax Models for Two Different Cat Dump Trucks

||Arvind Poddar||Chairman and Managing Director || ||Balkrishna Industries Limited||

Top accolades are the evidence of the Indian multinational’s continuous development as Original Equipment supplier

aterpillar granted an award of great importance in the course of the official ceremony, which took place on September 15th at Chopanki production plant, indeed, obtained the prestigious SQEP Silver Award for Supplier Quality Excellence Process Certification, which is bestowed to Caterpillar suppliers that are able to achieve the highest levels of quality and process control only. Not only is the Indian tire manufacturer now part of this Program for Excellence, it has also obtained homologation for the Original Equipment supply of the two tires Earthmax SR 47 and Earthmax SR 45 to be fitted on two different models of CAT equipment. This is another success for BKT that, thanks to the Chopanki plant,hasbeen able to comply with all requirements of the SQEP Silver Award, positioning themselves among Caterpillar’s best suppliers. A certification awarding the Indian multinational company’s commitment to offering high-quality solutions that are evidence of the attention drawn to product performance as well as to the research in sustainability and innovation. Officially inaugurated in 2006 for the purpose of increasingBKT’s production capacity, the Chopanki site is specialized in the production of All Steel radial tires for the industrial and OTR sectors. All BKT tirelineups are entirely produced in India at the production sites of Aurangabad, Bhiwadiand Chopanki, to which adds a modern mold plant in Dombivaliand last but not

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least the latest production site in Bhujprovided with state-of-the-art facilities and machinery. It is right at Chopanki, where the Earthmax SR 47 and Earthmax SR 45 are manufactured, for which BKT has obtained the homologation for the supply for two CAT equipment models, namely the CAT 773E dump truck with a capacity of 60 tons – equipped with Earthmax SR 47 24.00 R 35 –and the 770G model with a capacity of 40 tons – fitted with Earthmax SR 45 size 18.00 R 33. Earthmax SR 47 has been specifically developed for rigid dumpers and the material transport on the most critical surfaces such as one can fine in rock quarries. A characteristic feature is its long life-cycle thanks to the deep E4-class tread and the special lug pattern designed for the purpose of providing excellent traction in addition to regular tread wear. This pattern is also available with a special “cut resistant”compound versionensuring enhanced resistance against cuts and punctures. Earthmax SR 47 is available on the market in sizes E4-class18.00 R 33 and 24.00 R 35. Likewise perfect for rigid dumpersis Earthmax SR 45, made of aspecial compound that is particularly resistant against cuts, abrasion and impacts, risks that often occur under extreme operating conditions. This results in significantly reduced equipment standstill times along with increased productivity. Moreover, the special lug design provides extraordinary traction,

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whereas the deep tread ensures a longer tire life, increasing productive efficacy over the time. The tire is available on the market in size 18.00 R 33. The CAT equipment, for which the BKT tires have been homologated, are dump trucks designed for mining and quarry applications as well as for the use in the construction sector. These pieces of equipment are highly productive andreliable, and focus on the user’s need to transport more material at a lower cost per ton. “This is a great result we are really proud of. The Caterpillar SQEP Silver Award is a very prestigious and aspired accolade. Not only does it confirm our product’s great quality, but also the excellence of our production system,” Mr.Arvind Poddar, Chairman and Managing Director of BKT,states. “The homologation as official CAT supplier is a further acknowledgement of our products’ high specialist level and evidence of both our development and growth as far as Original Equipment is concerned. Pushing forward this market is one of our main strategic objectives testifying both the quality and reliability BKT has achieved for the large global Manufacturers.”

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‘Make in India’ for the global marketplace cannot be better demonstrated than Balkrishna Industries (BKT), a company with over 30 years of global presence in the ‘Off-Highway Tires’ segment. In the early 1990s when every other tire company in India was busy producing highway tires primarily for mass use, the leaders at BKT foresaw a unique opportunity in international business and started production in the ‘Off the Highway’ segment. Today, BKT enjoys principal presence in five continents around the world covering more than 160countries. It is the preferred supplier to International OEM’s in industrial/ construction and Miningsegments. Since its inception in 1988, BKT has grown into a diversified industrial major exporting its expansive range of ‘Off-Highway Solutions’ to the world. Quality conscious users which adhere to stringent conformity standards in countries like Europe,America,LSA,Middle east and Asia prefer BKT as their supplier. The international quality of BKT tires is achieved by using the foremost quality of raw materials that are processed through the most advanced and developed technology. The foundation of BKT has been built on the pillars of R&D, technology and best-in-class quality.This has enabled BKT to develop 150 – 160 new SKU’s (Stock keeping units) every year. This has led to an impressive portfolio of 2600 SKUs, which includes bias, radial, solid & All-Steel radial tires for a wide range of Off-Highway applications.The company has its own R&D centre which develops these tires that can encounter the toughest and the most hostile terrains faced during mining and industrial activities. The company has products from 5” rim diameter to 54” rim diameter for vehicles ranging from trailers, forklifts, etc. to technologically advanced machines like high horsepower tractors, combines, harvesters, GPS controlled vehicles, Articulated Dump Trucks, High-Speed cranes, sophisticated port vehicles & container handlers etc. BKT is the first tire company in India to produce all-steel radial OTR tyres. OTR vehicles ranging from Rigid Dump Trucks to Snow maneuvering vehicles use these tires. The tires under this segment range from a 20” diameter Tipper Truck size to a giant 51” Rigid Dump Truck Size in Bias make and 49” in Radial make, thus covering every requirement for Industrial use and Mining. BKT has been selling tires to world’s leading OEMs. The Company recently launched an ultra advanced range of tires especially for High Speed Cranes. The tire 445/95 R25 enables heavy high speed cranes to journey at speeds of 80 km/hr. “Each product passes over 450 stages of tests. The result of this rigorous practice being that BKT Products are known for their reliability and have the lowest claim ratio in the industry,” informs Rajiv Poddar, Joint Managing Director, BKT.

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Currently BKT has four functioning State of the Art manufacturing plants spread across India, the recent one being set up in Bhuj, Gujarat. The Bhuj plant, built up with a whopping investment of $500 million, has a production capacity of 120,000 tonnes per year with having capabilities of producing a diverse range – from 5-inch lawn tyres to 51-inch giant OTR tyres. The plant is also armed with highly sophisticated an R& D house and testing tracks. The Bhuj R&D department, equipped with physical and mechanical testing, has researchers, engineers, and technicians, working on from designing a new tyre, over developing new compounds, to improving product performance as well as production processes. The company claims to the first tyre manufacturer to build an outdoor tyre testing track in India. The outdoor testing facility has 6 different tracks, the circuit stretches over a total area of about 25 acres including tracks for tire performance tests in wet and dry conditions, an asphalt track as well as an inclined concrete track. Thanks to a large variety of tests, many relevant features such as traction, handling, comfort, noise, fuel consumption, braking, rolling resistance, soil compaction and many more can be measured by means of high-precision devices and instruments, according to the company. Though radicalization is picking up in the OTR segment, bias tyres will always have scope for certain applications, according to Rajiv Poddar. “Radicalization will be very high in certain applications. But there will be always a scope for bias tyres in certain applications such as port and underground mining.” The company, during the Automechanika Dubai 2017, launched Portmax PT 93, engineered tyre for terminal tractors that is perfect for operations at ports and logistics hubs. However, there has been no specific efforts are being taken by OTR manufacturers like the passenger or commercial tyres segments on sustainability. According to Rajiv Poddar, new technologies and radicalization can be termed as green sustainability efforts in the OTR segment. BKT will also focus on the Indian market as the mining sector is also reviving on the efforts are being taken by the new government. “The new government is looking to take positive steps for the mining sector and we are seeing bigger vehicles are being plied in the mining sector which will lead to bigger tyres in India. We have less than one percent market share in mining tyre segment so there is a huge space for us to grow,” said Poddar. Poddar also thinks that OTR tyre industry has gone through consolidation and no major consolidation will be seen in the near future. “I think, The OTR segment has already gone

through the consolidation phase in the OTR segment. However, the company does seeking any inorganic growth, added Poddar. “We are not particularly targeting at an inorganic. But we are open to evaluating if something comes on our way. We are more keen on bringing more technologies and capacity utilisation, added Poddar. According to Rajiv Poddar, the biggest challenge on the OTR segment is that to provide after-sales service. “The OTR is a high technical segment. The requirement of service, equipment and maintenance of the equipment is critical and high costs. And to tackle this challenge, we have tied up with service providers in the key market,” said Poddar. “We invest heavily every year into R&D, to upgrade our plant facilities and develop new products”, informed Mr. Arvind Poddar, Chairman and Managing Director, BKT. “Our competition is with global tire giants, so we always have to have an edge over technology if we have to compete with them. If you look at all steel OTR radial tires for mining, we are the Pioneers from India”, he further stated. The commitment to quality products is testified by the adherence to the strictest quality benchmarks with international certifications such as ISO 9001-2008 & ISO 14001-2004. BKT’s strong belief towards corporate social responsibility led to huge investments for self generation of wind energy. This fulfills a substantial share of its power requirements. These efforts of BKT have been recognized through various accolades such as winning the “National Energy Conservation Award” presented by the government of India on multiple occasions.

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Product Info Product which BKT will be displaying during the show:

APPLICA TION: Off the Road Application (Road Construction& Excavators)

FEATURES

18.00R33 EARTHMAX SR45 E-4** CR

24.00R35 EARTHMAX SR47 E-4** STD

27.00R49 EARTHMAX SR46 E-4** CR

18.00R25 EARTHMAX SR55 SMOOTH L-5S** CR

23.5R25 EARTHMAX SR31 E-3**/L-3* CR

12.00-24 20PR BKT XL GRIP INDUSTRIAL TT

14.00-24 16PR BKT SUPER GRADER TL

17.5-25 20PR BKT XL GRIP DL BEAD TL

16.0/70-20 14PR BKT EM936 SPL TT

• Tires are designed for heavy duty service • Specially engineered tread pattern provides excellent traction • Good self cleaning properties • Better driveability • SIZE: 16.0/70-20 • PATTERN: EM 936 • CATEGORY: Excavator Application Tires

APPLICATION: Industrial Trailers

APPLICA TION: Specially designed for Road Building & Heavy Cranes

FEATURES

• The Special non-directional tread design formulated with cut resistant compound makes it capable of withstanding severe underfoot condition • Strong casing for durability & long service life • Excellent self-cleaning tread design

APPLICA TION: ALL STEEL RADIAL

• Super grader tyre is a premium tire with heavy duty carcass & more number of lugs ensuring better life. • SIZE: 14.00-24 • PATTERN: SUPER GRADER • CATEGORY: GRADER TIRES (G2)

SR 47 E-4

FEATURES The EARTHMAX SR 47 is an all steel radial tire specially designed for rigid haul trucks. SR 47 is ideal for severe hard and rocky operations requiring maximum cutresistance. • • • • • •

Steel Casing and Steel Belts provide excellent stability and resistance to snags and punctures. E-4 tread for long wear life. Special rubber compounds for optimal combination of wear and cut resistance. Optimized tread design with maximum rubber for added cut protection. Closed tie-bar for additional cut protection. Squared shoulder maximizes ground contact for excellent maneuverability and handling.

APPLICA TION: ALL STEEL RADIAL

FEATURES

SR 31 E-3/L-3

BKT’s new generation tire to reduce vibration & provide ride comfort Delivers superior performance in long haul ADT operations and also in load and carry loader operations • OTR radial tire specially engineered & designed for Articulated Dump trucks and wheel loaders • Unique tread design for reduced vibration and excellent riding comfort • Special construction and compounding result in cooler running for exceptional performance and reliability on long haul articulated dump truck, and load and carry operations • Superior cut resistant tread compound for increased chip & chunk resistance • Strong casing for durability and long service life

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||www.constructionmirror.com/net||

APPLICA TION: ALL STEEL (UMS) RADIAL TIRE

SR55 L-5S

FEATURES SR55 is an all steel (UMS) radial tire specially engineered & designed for LHD Designed for operation over severe rocky surface with added protection to sidewall & buttress area Specially formulated compound for maximum wear, reliability & protection against damages & rock cuts • • • • •

Strong casing reinforced by multiple steel belts minimizes impact breaks and rock punctures Specially designed buttress provides added protection against sidewall and rim damage Reinforced sidewalls minimize rock cuts and damage caused by scrubbing Specially formulated underground mine service (UMS) compounds protect against damaging rock cuts Extended wear life due to deep L-5S smooth tread that minimizes rock / stone drilling

APPLICA TION: Wheel Loader

FEATURES • Rock regular tread with sturdy loader lug design, formulated with unique tread compound, together with heavy duty nylon casing makes it capable of withstanding cuts , snags, and bruises under all the service conditions • Strong & reinforced bead for high load carrying capability • Excellent self-cleaning tread design

APPLICA TION: ALL STEEL RADIAL

SR 45 E-4

FEATURES The EARTHMAX SR 45 is an all steel radial tire specially designed for rigid haul trucks. SR 45 is ideal for operations requiring traction or traveling long distances. • • • • • •

Steel Casing and Steel Belts provide excellent stability and resistance to snags and punctures. E-4 tread for long wear life. Special rubber compounds for optimal combination of wear and cut resistance. Tread design with optimized leading edge and void array promote excellent traction. Versions for severe operations requiring cut resistance, or heat resistance. Also available in standard version. Squared shoulder maximizes ground contact for excellent maneuverability and handling.

APPLICA TION: ALL STEEL RADIAL

SR 46

FEATURES The EARTHMAX SR46 high performance rigid haul truck tire is BKT’s innovative response to severe rocky, abrasive and harsh mining environments. This tire is specifically designed to carry heavy loads with superior resistance to cuts and chips and for improved life. • SR 46 is an ideal tire for severe rocky, harsh and abrasive mining operations. • Robust square shoulder design pushes loose stones aside to protect the sidewall from cuts and damage • Specifically designed all steel casing and belts provide significant level of protection against shock, fatigue and flats to maximize uptime and the potential for higher productivity. • Specially engineered and designed lug blocks and circumferential groove maximize cornering ability with minimum tread face damage. • Large contact patch with rigid lug blocks provide even tread wear and extended wear life. • Available in cut resistant, and standard specifications. ||www.constructionmirror.com/net||

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Focus: Indian Cement Industry Growth

An Overview of the Indian Cement Industry Growth

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India is the 2nd largest producer of cement in the world. No wonder, India’s cement industry is a vital part of its economy, providing employment to more than a mn people, directly or indirectly. Ever since it was deregulated in 1982, the Indian cement industry has attracted huge investments, both from Indian as well as foreign investors. India has a lot of potential for development in the Infra and construction sector and the cement sector is expected to largely benefit from it. Some of the recent major govt initiatives such as development of 98 smart cities are expected to provide a major boost to the sector. Expecting such developments in the country and aided by suitable govt foreign policies, several foreign players such as Lafarge-Holcim, Heidelberg Cement, Vicat have invested in the country in the recent past. A significant factor which aids the growth of this sector is the ready availability of the raw materials for making cement, such as limestone and coal. The eastern states of India are likely to be the newer and virgin markets for cement companies and could contribute to their bottom line in future. In the next 10 years, India could become the main exporter of clinker and gray cement to the Middle East, Africa, and other developing nations of the world. Cement plants near the ports, for instance the plants in Gujarat and Visakhapatnam, will have an added advantage for exports and will logistically be well armed to face stiff competition from cement plants in the interior of the country. Due to increasing demand in various sectors such as housing, commercial construction and industrial construction, cement industry is expected to reach 550-600 MTPA by the year 2025. A large number of foreign players are also expected to enter the cement sector, owing to profit margins and steady demand. In future, domestic cement companies could go for global listings either through FCCB route or GDR route. With help from the govt in terms of friendlier laws, lower taxation, and increased Infra spending, the sector will grow and take India’s economy forward along with it. Cement is classified into various categories based on its composition and specific end-uses. Primarily cement is classified into Portland, blended and speciality cement. Portland cement: Portland cement is the most common type of cement in general usage, as it is a basic ingredient of concrete. A mixture of limestone and clay is ground and burnt at a very high temperature to form clinker. The clinker is ground to a fine powder with the addition of gypsum (up to 5%) to form Portland cement. The essential ingredients of Portland cement are lime, silica, alumina and iron oxide. There are different types of Portland cement, which differ based on their chemical composition. However, the manufacturing process remains the same. Portland cement consists of tricalcium silicate or C3S, dicalcium silicate or C2S, tricalcium aluminate ||www.constructionmirror.com/net||

or C3A, and tetracalcium aluminoferrite or C4AF [C = CaO - calcium oxide (calcia), S = SiO2 - silicon dioxide (silica), A = Al2O3 - aluminium oxide (alumina), F = Fe2O3 - iron oxide (ferric oxide)]. The varying proportion of these constituents imparts diverse properties to the different types of Portland cement. Ordinary Portland Cement (OPC): The Ordinary Portland Cement is popularly known as grey cement. Although OPC is suitable for all types of civil engineering works, it cannot be used for mass concrete work like multi-storeyed buildings. Moderate Heat Portland Cement (MHPC): OPC, when mixed with water and allowed to hydrate, generates a lot of heat, which is not suitable for mass concrete work. However, heat generated during hydration can be lowered by altering the chemical composition of the cement. Such cement is called MHPC. This cement is more resistant to sulphate, as compared to OPC. Rapid Hardening Cement (RHC): Rapid hardening cement is a special purpose cement used for urgent repairs (such as airport runway repairs). It is similar to OPC, except that it is ground much finer, so that the compressible strength increases rapidly upon casting. RHC or high early strength cement develops compressive strength within 24 hours, as compared to 28 days in the case of OPC. They generate more heat in the early stages and can be useful in concretisation in cold weather regions. However, their principal use is in manufacturing pre-cast concrete units where the high early strength of the concrete permits quick reuse of moulds and formwork. Sulphate-resistant cement (SRC) The compressive strength of concrete, which is made using OPC, MHPC and RHC, deteriorates on account of continued contact with soil and water, which are rich in sulphates. SRC is a type of Portland cement, which contains less than 5% tricalcium aluminate (C3A) and other chemical constituents are similar to OPC. SRC is used for marine construction or in places, which are rich in sulphates. Oil well cement (OWC): This is a special kind of cement used during drilling of wells to fill the space between steel lining tubes and the wall of the well. Oil wells are drilled at depths of 500 metres or more below the ground surface. After the drilling operation, wells are lined with an annulus made of cement concrete. Since the temperature at these depths is over 1,000 degree Celsius, if Portland cement grout is pumped into the well, it would set instantly, and obstruct the ‘cementation’ or setting process. Hence, the cement used for lining oil wells, should be able to withstand the setting time by up to 40-120 minutes, and thereafter, set within 24 hours. In addition, it should have strength of over 100 kg/cm². In OWC, the%age of tricalcium aluminate (C3A) is reduced to less than 3% in its total composition in order to control/modify the setting time. In India, according to the Bureau

of Industrial Standards (BIS), there are nine types of OWC, depending on the type of construction and the specific application. White cement: White cement has all the physical properties of ordinary Portland cement (OPC, which is also called grey cement), and can be substituted for OPC. However, its use is limited to tiling, flooring or for decorative purposes as it is more expensive. White cement is produced under a fixed manufacturing process, with smaller quantities of iron and manganese. Although white cement and grey cement have similar physical properties, they cannot be produced in the same plant. White cement is mainly used to enhance the aesthetic value in tiles and for flooring. It is much more expensive than grey cement. OPC is grey in colour, due to the chemical complexes formed with iron oxide present in the cement raw meal. Moreover, haematite, bauxite and limestone are heated using coal, which gives cement its dark colour. When the proportion of iron oxide in cement is reduced to less than 0.4%, cement becomes white in colour. Thus, the use of haematite is minimised for manufacturing white cement, and it is replaced by pure silica or sand. Also, the clinker for white cement is burnt using fuel oil instead of coal. Special cooling techniques are also used to manufacture white cement. In India, white cement is primarily used as filler between ceramic tiles or for decorative purposes. For cement to retain its whiteness, the ash content in coal has to be minimal. However, as the ash content of domestic coal is high, gas or oil is used as a fuel to manufacture white cement. The white cement market in India is very small, as it is nearly three times more expensive than grey cement. White cement is expensive because the usage of pure silica adds to the production costs, this apart, freight costs are higher owing to the limited supply and spread-out markets. The excise duty on an ad valorem basis and higher temperature (requiring more oil) further add to production costs. UltraTech Cement and JK Synthetics are the two major players in the white cement market. UltraTech’s white cement plant at Khangar in Rajasthan is the largest cement plant in India. The total installed capacity of white cement is around 1 MT. Blended cement: In order to produce blended cement, certain natural or fabricated compounds, such as pozzolona, slag and sandstone, are mixed with Portland cement clinker and ground finely. Blended cement is more suitable for certain applications as compared to Portland cement. Blended cement is also called low-heat cement as it generates lesser heat during hydration as compared with OPC. This cement is used for large concrete works, such as dams and piers. Blended cement minimises the risk of developing contraction cracks on account of the lower heat of hydration of these cements.

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Focus: Indian Cement Industry Growth Portland blast furnace slag cement (PBFSC): Blast furnace slag (a waste product of the pig iron furnace) can be used to produce slag cement. However, blast furnace slag does not have cementitious properties if it is cooled slowly and ground finely. Hence, it is cooled quickly or quenched and subsequently ground to acquire cementitious properties. The quenching process is called ‘granulation’, and the slag is known as granulated blast furnace slag. Granulated blast furnace slag is mixed with lime or OPC clinker and ground to form slag cement. Portland blast furnace slag cement (PBFSC) is the most widely used slag cement, and contains 25-65% of slag, 5-6% of gypsum and Portland cement clinker. Apart from having the properties of OPC, PBFSC has other properties, such as lower heat of hydration and higher sulphate resistance. Super sulphate cement, another type of slag cement, is prepared by grinding granulated slag, anhydrite and clinker (in the proportion of 70:15:15). This cement is more sulphate-resistant, than PBFSC or SRC. Portland pozzolona cement (PPC): Pozzolona is a clay matter (natural or synthetic), which when ground with lime/clinker and mixed with water, produces cementitious compounds. Highly reactive pozzolona or fly ash is mixed with Portland cement clinker and ground with 5-6% gypsum to form PPC. PPC contains up to 25% pozzolona or fly ash. PPC has a lower heat of hydration, as compared with OPC and is also relatively more resistant to sulphates. As a standard, fly ash can be used to the extent of 15-35%. It has the physical properties of OPC, and hence, can be used for all types of construction work for which OPC is used. However, in PPC, the shrinkage is lesser, as compared with OPC. Masonry cement: Most varieties of cement, when mixed with sand and water get converted into mortar, which is coarse and not water retentive. Masonry cement is a more plastic mortar and is used for masonry work, such as laying, binding and plastering bricks. Portland clinker is ground with limestone, sandstone or granulated slag in the proportion of 1:1 to produce masonry cement. Some quantities of hydrated lime and/or a plasticiser are added to impart higher plasticity.

Speciality cement

Speciality cements have several special properties and are used in specific applications. Expansive cement/Shrinkage compensated cement: Concrete prepared from Portland cement or blended cement, shrinks on setting and hardening. Cement should expand on setting and hardening when it is used for pre-stressed, pre-fabricated concrete products and as a grout for filling cracks. This cement is prepared by increasing the proportion of gypsum and aluminous cement clinker to Portland cement

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clinker while grinding. Super high strength cement: This type of cement is required for the urgent repairs of important concrete structures, such as foundation pillars. This cement is prepared in jet mills by finely grinding Portland cement clinker with a higher proportion of tricalcium silicate. The tricalcium silicate content is around 60% of the clinker and its fineness should be at least 600 kg/cm2. Alinite cement: A special low-energy cement process has been developed to manufacture cement, in which, over 5% calcium chloride is added to the raw meal while grinding. As the burning point of raw meal is lowered significantly, less fuel is required for burning. The calcium chloride is vapourised and condensed in the kiln dust, which is re-circulated. A part of the chloride gets attached to the clinker components, and increases its compressive strength. This process, which is still in its development stage, would be viable if sufficient byproduct waste and calcium chloride are available at a low cost.

Ready mix concrete

Ready mix concrete consists of cement, aggregates, water and other ingredients, which are weighed and batched at a centrally located plant and directly placed at the construction site, without undergoing any further treatment. Operations are carried in factory-like conditions and are completely automated. Hence, RMC is a value-added, semi-finished product, and results in superior quality concrete. RMC is used extensively in many countries, such as the US, Australia, New Zealand and England, where 70-95% of all the concrete comes from central batch plants. In India, a few large projects have operated RMC plants for many years. However, the first commercial RMC plant was set up in 1992 at Pune. Main factors influencing domestic demand for RMC: • Consumer (contractors and engineers) education by RMC suppliers • Competitive pricing of RMC could lead to higher offtake, if the price difference between RMC and SMC (site mixed concrete) is reduced • Emergence of high cement consuming centres around the metro cities • Increasing quality consciousness of the user segment • Entry of multinational construction agencies and foreign consultants • • Entry of private players in Infra projects (RMC demand from sub-contractors is likely to improve, if the govt sub-contracts Infra construction projects on a turnkey basis to contractors, who are responsible for material supplies) • Increased supply of the product would result

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in higher offtake. At present, there are very few RMC suppliers in India. Cement is stored in silos, and aggregates (sand and stone chips) are stored in stockpiles or hoppers. These are then transported to an elevated tower for batching. The batched materials are then fed into the mixer, where they are mixed at a regulated speed, in order to obtain the concrete mix of the desired quality. A typical RMC facility includes a central batching and mixing plant, revolving transit mixers, and concrete pumps and conveyors. The following operations are carried out at the central batching and mixing plant: Storage of materials; Weighing as per the required proportion mix; Discharging the weighed materials to the mixer; Mixing. Batching, control operations are completely automated. A batching and mixing plant can store around 100 mixes (a mix is a particular proportion of cement and aggregates). The revolving transit mixer could be a truck mixer or truck agitator, which is used to transport RMC to the construction site. The mixer continuously agitates the mix to prevent early stiffening. Concrete pumps and conveyors are used to pump concrete at the construction site. The daily output of a RMC plant is not directly dependent on the capacity of the batching unit. Instead, it is influenced by the per truck capacity, the number of trucks and the daily number of trips. The daily number of trips is determined by the transport time, which depends on the distance between the RMC plant and construction site, transportation bottlenecks and road conditions. In general, 3 round trips are undertaken daily. RMC offers certain advantages over site mixed concrete (SMC). Tyres of RMC and advantages are listed below. Central mixed RMC: Mixing is done at the central plant. The mixed concrete is transported in an agitator truck, which revolves slowly, in order to prevent segregation and early stiffening of the mix. In most developed countries, 70-95% of all concrete comes from central batch plants. Transit mixed RMC: The materials are batched at the central plant. However, they are mixed in a mixer truck at the site or mixed immediately before the concrete is discharged. Quality control: RMC ensures quality (in terms of strength, durability and performance), as all the constituents are weighed in the required proportions and mixed at the RMC unit. This is especially useful for projects that require high quality control. Moreover, the quantity of additives (fly ash, plasticisers and retarders) can be monitored in order to ensure superior quality of the cement. Faster speed of construction: This is due to the continuous mechanised operations, which is especially important for large, time-bound construction projects. ||www.constructionmirror.com/net||

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Focus: Indian Cement Industry Growth Eco-friendly: RMC is considered to be a ‘clean product’ due to the absence of used cement bags and dust at the construction site. Convenience for congested sites: RMC eliminates the need to stockpile the raw materials, which are used to make concrete at the project site. Lower wastage: Cement wastage is minimised due to bulk handling and storage. Simplifies procurement and storage of raw materials: The user is relieved of logistics of supply and storage of multiple raw materials at the site. Reduces manpower requirements: Manpower expenses are reduced due to lower labour and supervisory requirements. Range of concrete grades: The RMC plant has the flexibility to manufacture a wide range of concretes, due to the computerised batching process. Correct proportions of ingredients: Computerised batching operations result in accurate proportions for the various raw materials.

RMC market in India

RMC is still in a very nascent stage in India, as relatively small%age of cement production is converted into RMC, as against more than 50% in the major developed countries. The growth of RMC is predominantly driven by the demand in metro cities. Bengaluru is the largest market for RMC owing to the many construction activities in the city (IT campuses, flyovers and govt sponsored Infra projects). Bengaluru continues to lead the consumption of RMC in the country. High consumption in Bengaluru has led cement majors like ACC Ltd, RMC Ltd, Grasim Industries and L&T to set up RMC plants in the city. Reasons for retarded growth in RMC consumption Initial controls on cement pricing and distribution did not benefit the RMC business owing to the shortage of cement (cement is an important component of RMC). Besides having easy access to cement, RMC also requires technical competence to manufacture the concrete (to ensure mixes with the desired properties). Presently, the usage of RMC is restricted because of its higher price vis-a-vis SMC, and the inadequate facilities at construction sites to utilise RMC effectively. In addition, in India, labour is less expensive as compared to developed countries. As a result, most medium and small-scale builders opt for the conventional method of SMC. Logistics proves to be another hurdle for RMC, as it is difficult for RMC trucks to pave through small and narrow roads where the building is being raised. These agitator trucks being very huge, occupy a large part of the road, causing traffic bottlenecks. Apart from this, the additional taxes on RMC also prove to be an impediment. New marketing initiatives also need to be undertaken

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because either users are unaware of the product or are not convinced of its benefits. This is important as RMC supply should match the potential demand. If the supply is less than the demand, there is a potential loss of business. However, if supply exceeds demand, the per unit cost of concrete increases due to idle capacity. Moreover, RMC is considered economically viable only if it is sold within a radius of 30-40 km from the plant. If the distance between the plant and construction site is more, the wet concrete would harden in the mixer itself. The only positive development has been the mandatory usage of RMC in time-bound projects.

Industry, Investment, Initiatives

India has second largest cement market. With cement production capacity of nearly 420 MT, as of Jul’17. India’s cement production capacity is expected to reach 550 MT by 2025. India is the second largest cement producer in the world. Industry to grow at 5-6% CAGR between FY17-FY20. Capacity addition of 109 MTPA between 2013-16. Total installed capacity of 420 MT as of Jun’17. Domestic consumption to outpace supply in next three fiscals. Cement prices in India recorded a 6.7% monthon-month growth in Apr’17, thereby indicating the probability of growth in volume and profitability of cement companies in the quarter ending Ju’17. The housing sector is the biggest demand driver of cement, accounting for about 67% of the total consumption in India. Other major consumers of cement include Infra at 13%, commercial construction at 11% and industrial construction at 9%. The total capacity of the cement industry in India is 435 MT and the growth of cement industry is expected to be 6-7% in 2017 because of the govt’s focus on infrastructural development. The industry is currently producing 280 MT for meetings its domestic demand and 5 MT for exports requirement. The country’s per capita consumption stands at around 225 kg. The Indian cement industry is dominated by a few companies. The top 20 cement companies account for almost 70% of the total cement production of the country. A total of 188 large cement plants together account for 97% of the total installed capacity in the country, with 365 small plants account for the rest. Of these large cement plants, 77 are located in the states of Andhra Pradesh, Rajasthan and Tamil Nadu.

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On the back of growing demand, due to increased construction and infrastructural activities, the cement sector in India has seen many investments and developments in recent times. According to data released by the DIPP, cement and gypsum products attracted FDI worth US$ 5.24 bn between Apr’00 and Mar’17. Some of the major investments in Indian cement industry are as follows: Emami Ltd, a FMCG company, plans to invest around Rs 8,500 Cr to scale up its cement production capacity from 2.4 MT to 15-20 MT in the next 3-5 years. Gujarat-based Nirma group, with presence in detergent, soap and chemicals sector, has bought Lafarge India’s cement business, consisting of 11 MT production capacity, for US$ 1.4 bn. FLSmidth, a global engineering company based in Copenhagen, has signed a contract with India’s L&T for engineering, procurement and supply of equipment for a complete cement production line with a capacity of 3,000 T in Tamil Nadu. Shree Cement has undertaken two greenfield projects in West Bengal and Odisha to increase its presence in eastern India. These projects will attract an investment of US$ 78 mn and will be commissioned by late 2018. Ambuja Cement is targeting an investment of USD 580 mn for capacity expansion in Rajasthan, Madhya Pradesh & Uttar Pradesh. In June 2017, Odisha Govt gave its nod to Ambuja Cements for setting up a cement grinding unit of 1.5 mtpa at a cost of US$ 66.43 mn. Dalmia Cement is planning an investment of USD 333.3 mn to ramp up its manufacturing capacity to 21 mtpa from the existing 17 mtpa over the next 2 years. Dalmia has started up its operation at its new 2.5 MT greenfield unit at Belgaum in Karnataka. It also plans to scale up its 2 plants in North-East India for a total value of USD 239 mn & USD 9.2 mn, respectively. Dalmia (Bharat) Cement is the preferred bidder for one block of Limestone (Kesla II) in Raipur, with reserves of 215 MT. The deal is expected to generate cumulative revenues worth USD 1.76 bn for the state govt. ACC subsidiary of Holcim, has plans for a USD 500 mn capacity expansion in India. ACC will upgrade and expand its Jamul unit in Chattisgarh & its grinding unit in Jharkhand. This will increase ACC’s capacity to 38 mtpa from 30 mtpa in a phased manner by 2016 & 55 mtpa in 2020. Heidelberg Cement, a Germany-based cement manufacturer has commissioned Phase-I of its

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Jhansi grinding unit. The company has undertaken an investment worth USD259.4 mn for expanding its capacity to 2.9 MT. Heidelberg aims to ramp up the operational capacity to 6 MT at its Damoh plant in MP, striving to add an additional 9 MT by 2017. Ultratech Cement, After the acquisition of 2 cement plants in 2015, UltraTech has planned to construct 2 greenfield grinding units in West Bengal & Bihar. After the acquisition, the installed capacity of the company has reached 67 mtpa. The capacity is likely to reach 71 mtpa, after the completion of expansion. Ultratech plans to build a new plant with capacity of 3.5 mtpa at Dhar in MP with an investment of US$ 400 mn. The plant is expected to start commercial production by 2019. Amrit Cement, has announced the launch of Amrit Cement in the North-Eastern market. The company plans to achieve a production level of 5 mtpa by FY16, through capacity expansion in North-Eastern Bihar and Nepal In the 12th FYP, the Govt of India plans to increase investment in Infra to the tune of US$ 1 trillion and increase the industry’s capacity to 150 MT. Cement Corporation of India (CCI) was incorporated by the Govt of India in 1965 to achieve self-sufficiency in cement production in the country. Currently, CCI has 10 units spread over eight states in India. In order to help the private sector companies thrive in the industry, the govt has been approving their investment schemes. Some such initiatives by the govt in the recent past are as follows: State Govt of Chattisgarh has auctioned one block of Limestone (Kesla II) in Raipur District having estimated reserves of 215 MT valued at Rs 10,367 Cr, and would earn a cumulative revenue of Rs 11,894 Cr to State Govt over lease period. Union Budget proposed to assign Infra status to affordable housing projects and facilitate higher investments and better credit facilities, in line with the govt’s aim to provide housing for all by 2022 which will boost cement demand. According to Finance Ministry, the National Housing Bank will refinance individual housing loans of about Rs 20,000 Cr in 2017-18. Finance Minister proposed to complete 1 Cr houses by 2019. All these developments are expected to boost cement demand. Increased allocation to rural low-cost housing under Pradhan Mantri Awaas Yojana Gramin scheme to Rs 23,000 Cr from Rs 16,000 Cr in FY17 is likely to drive a 2% increase in cement demand, Ambit Capital said in a report. Bright Prospects Cement is back in demand. Industry activity apart, the govt has announced several infra, road

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projects that should see immense activity involving consumption of cement. Impact of these activities is visible the way the stock price of CoS like UltraTech, Shree Cement, Ambuja Cements, ACC, JK Laxmi, Prism Cement and J.K. Cement, among others, have gained. Gains have ranged from 30 to over 300 %. Thrust towards infra and a sharp increase in the govt’s capital expenditure will further boost the fortunes of the sector considering the 36 CoS that are committed to supply 95 lakh tonnes of construction material during this year at a price of up to Rs.180 per bag to the govt.

Currently, the housing sector is the biggest demand booster for cement, accounting for about 67% of the total consumption. Other major consumers include infrastructure at 13%, commercial construction at 11%, followed by industrial construction at 9%. The other factor that plays a favourable role in the resurgence of the cement sector is the fall in oil and coal prices, which play a significant role in the margins of cement companies. The average coal prices during Apr-Dec’14 were down 10% compared to average cost during FY14. The slide in the prices of coal and crude oil, as witnessed over the last four-six months, buttressed the cement industry’s EBITDA margins. Although a cyclical infra recovery and capex revival might catalyse cement demand, structural concerns related to low utilisation levels still prevail. Capacity utilisation for the cement industry at the national level is 71-72 %, with the maximum 60 % in the south. However, it will take a long time for cement companies to reach a capacity utilisation of 85 %, a level of operation that can improve margins and financial performance. Moreover, demand-supply in the plant cluster, efficiency of the plant and extent of limestone reserves gives one a reasonable idea of the long-term prospects of a company. Limestone acquisition cost has increased materially (3times as compared to 2005 levels) and several CoS are aggressively adding limestone mines. Coal costs nearly 50-55% of the total power and fuel cost, while freight costs 15-18% of the total cost,

which will impact companies that are dependent on road, rail routes for freight. Despite the govtal initiatives, the continued slackness in execution of infrastructure projects amid rising fears of rural slowdown could drag volume growth rates for the next couple of quarters. The recent cement demand pick-up and slowdown in pace of capacity additions has led to gradual improvement in utilisation rates across the regions. This will help cement companies as the narrowing supply-demand gap would help in pricing power. While there may be a debate on how soon the economy will recover, there is no real debate on the direction. Budget push creates a favourable backdrop but is unlikely to immediately impact volumes. So all in all, sentiment is on a high and hence the valuations. Few argue that one cannot rule out the consolidation of the cement sector. Globally, the sector is dominated by few major companies who control capacity in particular. In India, there is no such scenario as the industry is regionally fragmented and, today, several cement companies are available below replacement cost, opening opportunities for consolidation for bigger players. The cement industry is expected to grow at 6-7% in the current fiscal with govt’s focus on infra development being a key driver of demand. While prospects of a normal monsoon augur well for the industry, oversupply may restrict the ability to pass on any input cost increases. Cement demand growth expectations for 2017-18 is 6-7%. Prospects of normal monsoons, increased focus and outlay for agriculture, infrastructure as well as affordable housing, thrust on construction of cement concrete roads are demand boosters. Besides, the launch of smart cities, urban infra development along with implementation of GST will also bring opportunities for growth for the sector. However, industry could also face challenge of oversupply restricting the ability to pass on any input cost increases. Moreover, delay in awarding infra projects by the govt agencies and further hardening of fuel and power costs may also prove to be hurdles to growth. Non-availability of sand, aggregates impacting construction activities, are possible dampener of growth. According to Cement Manufacturers Association, industry had a decline of 1% last fiscal although the CAGR of the industry of last 5 years was around 4%. The industry has a total capacity of 435 mtpa, while it is utilising only 280 MT for meeting domestic demand and 5 MT for exports. For 2016-17 fiscal, HeidelbergCement’s total income stood at Rs 2,025.54 Cr, up 4.49%, compared to Rs 1,938.36 Cr in the previous year.

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Focus: India Roofing and Cladding Industry

India Roofing and Cladding Industry: Prospectives and Challenges

ntroduction

The concept of roofing was driven by human need for protection against climatic elements, for protection of personal belongings, production processes and personnel. Roofing accounts for 25-30% of total building construction cost. The roofing options available and their market shares include Asbestos Fiber Cement Sheets (10.5%), Corrugated Galvanized Iron (CGI) Sheets (13.5%), Color Coated Metal sheets (0.4%), Aluminium Corrugated Sheets (0.50%), Asphaltic Roofing (0.70%), Red Mud Plastic (0.1%), PVC (1.70%), Reinforced Cement Concrete (RCC) (55.0%) and Clay Tiles at (17.6%). ¾ Asbestos Fiber Cement Sheets are preferred over other roofing option mainly because of its characteristics like Weather-proof, Non-corrosive, Strong, Durable and as detailed below. Asbestos Cement Fiber Sheet (CFS) is an oligopoly market with the top four players collectively controlling ~60% of the market. There are 17 major players in this industry with about 63 manufacturing unit. CFS being predominantly a rural product has its fortunes closely linked with the rural economy. Branding and distribution reach are key

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parameters in the business. An estimate 0.826 billion people reside in rural India from a total population of 1.18 billion which is ~70% of India’s total population. Around 50% of Rural India living in Katcha & Semi Pucca homes thereby providing a vast opportunity for Pucca houses. Thatched roof need regular replacement and tiled roof need continued maintenance. Therefore, whenever the economic conditions improve the first choice of the rural poor to replace the roof over their head with an affordable asbestos cement sheets. The rural spending is going to further be strengthened due to adequate rainfall in current year. The continuous increase in cost of inputs is a matter of concern. Asbestos mining is totally banned in India and many other countries leading to very few supplier of the raw material Chrysotile and is 100% imported. This strengthens the bargaining power of suppliers. Despite of it constituting only 8% of the input it costs nearly 45-50% of the total raw material cost. Fly-ash which is procured from the thermal power stations was available either for free or at low cost earlier is now available through the tender mechanism at higher cost, resulting in increased cost. The activities of the

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‘Ban asbestos lobby’ instigated by manufacturers of substitute products continue to be a matter of concern. Incase there is a new substitute these CoS will be able to cope with the new substitute and start manufacturing sheets with the new substitute as they are in process of developing substitute of asbestos but no concrete results are yet out, as well as the top 4 players have a well diversified product mix.

Roof making is evolving into an art that requires as much planning, strategising as rest of the building´s structure. Apart from the functional aspect of a roof, it also has an aesthetic role to play in any structure. Today, the construction industry is passing through a challenging phase, with the infrastructure and ||www.constructionmirror.com/net||

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Focus: India Roofing and Cladding Industry industrial segments to be demand drivers for the roofing industry in the year ahead. According to current trends, a 10-15% growth in the industry seems reasonable. Moreover, being exposed to natural elements also makes roofs experimental grounds for green practises. Mantri Adarsh Gram Yojna which are expected to provide long-term strength to the roofing market. There are estimated 25 crore houses in India of which 46% are considered to be homes with pucca roofs and rest made of thatch (Kuccha roofing) and clay tiles. In rural areas alone, security concerns along with increased income level has led to an increase in the desire of shifting from kuccha house to pucca house. On the other hand increased construction in urban areas and infrastructure development activities like construction and renovation of airports, metro rails, SEZs, industrial cities and IT parks have kick-started the demand for modern, efficient roofing systems. Overall, the roofing market is witnessing healthy growth on the backdrop of consistent development in infrastructure and rising disposable income both in urban as well as rural areas

Trends in roofing systems

Roofing systems in India have undergone drastic changes in the recent past and the reasons behind this phenomenon are varied. While the industry does not follow the West blindly when it comes to trends, domestic demand in itself has spurred the need for innovation and change. India has witnessed an infrastructure boom in the past decade with hi-tech spaces like airports, industrial parks, IT parks and metro rails growing in numbers. Specialised buildings have distinct needs for roofing and architects working in India have been able to acknowledge this demand with customised designs that integrate functional, aesthetic and sustainable aspects. This change is not limited to urban areas; with the increase in disposable incomes, Tier-II and Tier-III cities as well as rural pockets are joining the fray. Traditionally dominated by galvanised steel sheets, India´s roofing industry is recently shifting its preferences and moving towards zinc-aluminium (Zn-Al) coated products because of their superior quality and aesthetic appeal. Roofs may be divided broadly into flat, pitched and shells and folded. Flat roofs have a slight slope (not more than 10°) to drain out rainwater. Such roofs are treated with waterproofing materials, like mixing chemicals in concrete and providing coba concrete. Pitched or sloping roofs are preferred in large-span structures like workshops, factory buildings and warehouses. In all these roofs, covering sheets like AC sheet, GI sheets and slate are supported on a suitable structure. A shell roof may be defined as a curved surface, the thickness of which is small compared to the other dimensions. In these roofs, a lot of load is transferred by membrane compression instead of bending as in the case of 124

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conventional slab, beam constructions. The current trend in roofing in large-span buildings and infrastructure is primarily to cater to the demands of structural strength, durability, water-tightness and aesthetic appeal combined with low maintenance and low corrosion. The structural capability of roofing materials in terms of the span-to-weight ratio is going up with the introduction of high-strength materials; special profiles and interlocking ways of laying the roofing element; formulation of laying elements at site to produce a single large-span sheet; and reducing the number of joints and overlaps - all these are new trends. Green buildings lay emphasis on energy conservation, making insulation an important aspect of roof design. Besides, disappearing green spaces have forced users to turn roofs into useable areas like gardens or install utilities like solar panels, fans and cooling towers. As a result, roofing options have also evolved to cater to these demands. Pre-engineered insulated roofs have made major inroads in the industry, starting from industrial buildings and warehouses and now facilitating fast-track execution of office and commercial buildings.

Material changes

When innovations are introduced in any aspect of infrastructure, it usually means re-imagining the use of materials. Roofing systems are no exception, as asbestos and steel are turning out to be preferred materials. Other important materials are tensile membrane, shingle and clay tiles. The most common roofing methodology continues to be concrete in modern buildings. Other commonly used alternates for roofing include metal (aluminium and steel), fabric-fibre cement, polycarbonate and thatch. Variants in technology could include insulated or un-insulated, motorised-fixed, skylights and in-situ or factory fabricated or pre-engineered. The industry has multiple options for various applications and growing demand has ensured that most of them are now being manufactured locally. Special coating for corrosion resistance and aesthetic appeal has increased the durability of roofing material. The ability to withstand high wind and rain conditions including gusts through improved fastening methods with or without perforations has made these buildings more eligible for common use. With the introduction of concepts such as pre-engineered buildings and the need for sustainable design, roofing systems are witnessing a surge in green technology. Rainwater harvesting, storm water drainage, solar panels and sun roof technology are a few such innovations that have gained popularity in recent times. Innovations in roofing largely fall in the sustainability category. One of the important elements in roofing systems today is its ability to reduce thermal heat gain. Although roofs and side walls are insulated,

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the basic material itself has to have better thermal efficiency. Hence, advanced coating has been evolved owing to which the roof reflectivity has increased and is measured by the solar reflectivity index. The higher the index, the more heat gets reflected and is better to reduce heat transmission. Also, recyclability and lifecycle costs of these roofing systems are very high. Green technology in roofing has become important. Studies have found that green roofs can be effectively used for energy savings, improving surrounding air quality, reducing carbon emissions and controlling storm water run-off. The roof is responsible for about 15-20% of a building’s load and green roofs significantly reduce roof surface temperature and heat flux rates.

Efficient solutions

Roofs are one of the largest surfaces of a building, thus they could cause a heavy impact on environment, besides being a kind of signature of the house or the building; it has to be aesthetic. But the comfort needed by end users is wider. A roof has to protect the daily life of the inhabitants when it rains or when the temperature increases. One company that has worked at its fibrous composition and corrugations thus enabling air to circulate is French company, Onduvilla. As a matter of fact, Onduline (also based out of India) has one of the best thermal coefficients and high sound absorption values (Rw = 28dB) for products of similar thickness. The company says the composite material is not only water repellent but also resistant to all type of corrosion relative cracking that is common with metallic roofing tiles. It also gives you an ideal alternative to concrete and clay tiles, as well as metallic tiles and shingles. The promoters add that it is a unique and complete system that’s well suited for renovations or new buildings and perfect for all standard roofing structures, including wooden and metallic battens and wooden and concrete decks. With their light and flexible materials, the tiles fit seamlessly with all types of diverse roof shapes and sizes, including light and uneven roof structures. There has been much advancement in metal roofs. Eons ago when metal roofs were more popular, they were made from copper or tin. Then in the 19th century came materials like galvanised iron then aluminum and now steel. The materials, besides being a revolutionary step for fast completion of buildings and offering recycling benefits, were adopted as they were lighter, low maintenance and cost less. Even today, these are some of the primary reasons for their popularity. Modern technology has added precision, safety, insulation, lifetime looks and textures to up the style quotient. Besides, if considers the reduction in labour effort and material used, it is an added bonus. With standard factory produced sheets and accessories, repair and replacement now no longer means obvious ||www.constructionmirror.com/net||

patchwork on the exterior. Metal roofs also add value to a property in being fire retardant and scoring for green architecture. Aluminium sheets as roofs are an option that is available in various sizes, thicknesses and vibrant colours. Jindal Aluminium has introduced Jindal Forever roofing sheets that are durable, rust proof, easy to install, maintenance free and have high resale value in comparison with all other competing products. There’s a reason for the pithy saying “A roof over your head”. Besides the gratitude, in today’s day when you talk of roofs, it could also imply to remember to thank the Almighty for a roof that does not leak. And if it does, there is always the advanced technologies in waterproofing that one can bank on. Over the last few years, manufacturers have been launching new, durable and sustainable products that focus on environment, safety, and health considerations. With green and sustainability being the core of every business segment, the waterproofing industry is also following the same path. There are various methods of waterproofing and the most common conventional method is the Hessian based tar felt. But bitumen is not a material that can hold fast and since it has a life of up to five years, this, though popular, doesn’t find acceptance in residential properties in metros.

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Bitumen disintegrates on coming to contact with both UV radiation and some chemicals in the subsoil water. Also Hessian being organic in nature is subject to decay within a short time, resulting in decrease in tensile strength and life of tar felt. More often than not, the workmen laying the bitumen layer are known to create imperfect laying of tar layers (which requires use of light rollers after laying but rarely done by the contractors) that results in air pockets which in turn cause cracks on the surface over a period of time. No matter what the roofing style/ requirements may be, there are waterproofing solutions for all of them. Most CoS not only have best products for every surface area, but also provide guidance from professional consultants on right application methods and detailing. The advent of new materials have also given a fillip to the changes. The use of steel, aluminium, copper, zinc, fibreglass and asphalt, which was previously dominated by RCC, galvanized iron, asbestos, wood, etc, has opened up several new innovative possibilities . Advent of metal, fiberglass and asphalt roofing has forever changed the roofing industry, which was previously restricted to conventional RCC roofs or at best, GI or asbestos-cement sheet roofing. Quality of fasteners, clip-on systems, hardware fixings and trimmings has increased considerably, allowing structures to look attractive and neat, apart from ensuring quick

installation with the least on-site time. In the last one decade industries have understood the use and benefits of galvalume metal roofing over traditional AC sheets or GI metal sheet. Even in rural areas galvalume metal roof and colour coated galvaume roof/wall are being used. Today more than 80% roofs are constructed using these materials’. Currently, Interarch offers three different types of roofing and cladding materials under the brand name of Track-dek Screw type Hi-rib profile, clip-on lock profile, standing seam roofing profile screwless type in varying thicknesses, colours. While aluminium, galvanized steel are preferred due to economical, copper and zinc are used generally in smaller places, as they are very expensive. Metal alloys in different colours, styles and textures, cladding metal panels superseding the conventional stone and tiles and glass fatades are gaining ground, largely for commercial buildings. A sig. change has been the knowledge base of the buyers. Being a diverse industry with several market segments within, the thrust is on getting the most suitable product addressing the specific needs of a project. The influx of a host of new products and the general awareness and acceptance level of the end customers and specifiers are the major reasons behind this change. There are number of roofing solutions available like single skin, double skin, secret fix or standing

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Focus: India Roofing and Cladding Industry seam and composite metal deck. Standing seam roof cladding is often specified, where low pitch or curved roofing is required. The construction generally offers a more aesthetic, less industrial profile, with no thorough fixings, which could be vulnerable in low pitch applications. Standing seam profiles are mainly specified in aluminium. These are mainly insulated panels and are preferred for their non-industrial look, perfect weather sheeting quality, appealing design and better thermal and weather performance. All steel faced cladding are either hot dipped galvanized coated/ aluzinc coated and painted to provide the required appearances and durability. Aluminum cladding is coated with a mill or painted finish. These new roofing and cladding materials no doubt come with a host of benefits: superior quality, durability, light weight, easy and quicker to install, aesthetic appeal with products coming in several formats and colours, thermal efficiency, excellent atmospheric resistance amid diverse env. conditions, easy maintenance, corrosion resistant, eco-friendly, etc. The movement towards green building concepts have also resulted in the usage of green building materials for roofing and cladding. This has also resulted in the elimination of carcinogenic materials like asbestos. But in India the effects of green materials has not had much impact as the green movement is yet to gain momentum say some industry professionals. There has been a visible progress of the green building concept of which roofing is an integral part but the products catering to the roofing segment are very basic without much innovation. A popular concept in the international market as there is a conscious effort from the respective govt’s to support the cause with attractive payback and subsidy schemes for innovations focusing on energy conservation. An earnest effort from both building community, govt is needed to give this concept some momentum in India.

Market Overview

Though all the segments have contributed to the growth of roofing and cladding industry, some have played a more significant role. All the segments have more or less equally contributed towards the growth, though the industrial and residential segments have been instrumental in a combined growth for roofing and cladding and the commercial and hospitality segments have contributed more to the cladding industry. In the industrial, commercial and infrastructure spaces the impact have been the maximum, where roofing and cladding also have a functional role to play. However, they have not made much headway in the housing sector. Reasons cited are the costs involved and conventional construction practices. High rise urban residential structures are largely using the conventional in-situ reinforced concrete, mainly due to the cost and availability of 126

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skilled labour force. Going with composite metal deck flooring will shorten the construction time, reduce the building loads and economise the design of vertical elements and foundation. Developers involved in large scale housing development comprising of villas, schools, community centers etc. are taking keen interest in the metal roof cladding solutions due to their better thermal and acoustic properties, light weight, enhanced architectural features etc. Sooner or later we need to adopt other flooring options to meet the industry demand. The situation will also change with growing need for low cost housing projects. The housing sector has not been impacted much as on today. However the situation would improve with the low cost housing projects gaining momentum in rural sectors and growing urbanisation which will promote roofing and cladding industry in a big way in the next 5 years. There is a wide spectrum of roofing materials, which are used for different structural, aesthetic, economic and performance reasons. Roof designs have developed from just being a weather performance element to an architectural trademark that can be environmentfriendly, structurally sound, reasonably priced and aesthetically attractive. As per data, about 55% of the Indian market continues to use RCC, followed by clay tiles (18%). Fibre cement sheets contribute around 11%. The segment seeing an increasing demand is metal roofing which expects to see a growth of 30% CAGR. This growth is predominantly seen in developed states, cities and rapid urbanization. Although rural regions account for a higher number of houses in India, the roofing solutions opted by them are generally cheaper than their urban counterparts. Asbestos cement roofing installed capacity is expected to witness steady growth over the next five years. Some of the leading players in the fibre cement roofing sector are Everest, HIL, Vishaka and Ramco. RCC is widely used in India owing to its cost effectiveness and versatility. Since most structures that people inhabit are residential or commercial buildings, they go with reinforced cement concrete (RCC) roofs. Metal roofing as a concept was introduced a few decades back to replace asbestos cement panels. The idea gained ground with the evolution of preengineered steel buildings for industrial manufacturing sectors. Since then, metal roofs have come a long way. Today’s metal roofs are attached to the structure with concealed clips, which slide to accommodate expansion, contraction. Manufacturing industries such as power, automobile, engineering goods and services including logistics, warehouses and infrastructure are large users of PEB. Leading players in the metal roofing industry are Lloyds Insulations, Tata Bluescope Steel, Kirby, Pennar and Interarch. The total market for steel roof and wall cladding industry alone is about a million

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tonne and has registered near to double-digit growth over the past 3 years. There also seems a major shift from galvanized steel sheets to Zn-Al coated sheets as the latter provides excellent atmospheric resistance in a wide range of environment under many diverse conditions. Aluminum products are also getting recognition in the market because of the flexibility offered to designers. Applications like flat roofing where metal profile have limitations from view point of weather tightness, nonmetallic outer finishes like TPO, PVC or EPDM are offered as part of roofing assemblies. Sandwich panels with metal facing are also receiving good acceptability from industrial as well as commercial sectors due to their providing “one-step” solutions to insulation andweather tightness. These panels incorporate mineral fibre to provide thermal insulation and eliminate interstitial condensation and cold bridging. They offer rigid and lightweight construction, with no vapour or breather membranes required, and being a single unit, significantly reduce installation time. Composite panels are suitable for use on all building types in the commercial, retail and industrial sectors, providing flexibility for change of future use. They can also be installed over existing sheet-covered roofs to improve thermal insulation and weather protection. Revamping airports has led to the emergence of aluminum built-up and single ply membrane built-up roofing systems. Architectural trends have been of considerable importance to the level of demand for roofing materials in luxury housing. Over the years, architects have largely developed a preference for the use of more traditional materials such as slates and clay tiles because of the environmental and aesthetic advantages that theybring. Shingles are alsobecoming increasingly popular in the country. Shingles are fiberglass reinforced, high grade, mineral- stabilized asphalt based matswhich are overlaidwith high strength ceramic coated granules and underplayed with a mineral stabilizer cum fireretardant. They come with multiple-laminate options and in a wide variety of colors and they can be applied on sloped roofwhich could be of concrete,wooden or any such solid plane material. With the Government of India’s Solar Mission, companies like Lloyd Insulations are working on a few proposals wherein PV Solar Panels are integrated with almost all types of roofs.Challenges involved are integrity of the entire roof from view point of water tightness and structural integrity of PV solar panels. The company has engineered PV solar systems with its roofing applications with importance given to cost economics and track records. Other solar technologies that can revolutionize the Indian roofing industry are the latest generation of thin film solar and photovoltaic panels that look like ordinary shingles. PV laminate ||www.constructionmirror.com/net||

is a superior method of integrating photovoltaic with metal roofing. The laminates have a peel and stick backing that enables them to be attached to the metal roofing panels in the shop or at the site. When applied directly to the standing seam metal roofing of dark colours, it is hardly discernible from ground level. Photovoltaic laminates work well in cloudy, low-light environments, capturing different light wavelengths and allowing current to flow around shaded areas of the laminate. They also perform well in coastal conditionsandinindustrieswhere there is a lot of airborne dirt and parti cles. Moreover as they are directly applied to the metal roofing and do not require framing,theyare cost effective than conventional solar panels. Solar roof tiles are lightweight tiles or shingles that look like normal tiles and the installation process is similar to that of normal roof tiles except that solar roof tiles must always be bordered by normal roofing tiles. The tiles are coated with photovoltaic cells made of amorphous silicon. They can be designed to look like conventional asphalt shingles and can be used instead of roofing materials such as asphalt shingles, standing seam metal roofing and slate or concrete tiles. Also, solartiles can be blendedwith existing asphalt roofing tiles, are waterproof and designed to withstand heavy sun and natural elements. In the near future, most companies expect at least 50% of the roofs in industrial, commercial and public buildings will be with PV solar systems. Green roofs are also coming to the fore with the emphasis on sustainability and efforts to mitigate the urban heat island effect. However, they are still in nascent stages in the country due to the lack of awareness and knowledge require for installation and maintenance.

The current market size of roofing and cladding put together is about Rs 3000 crore. And it is has grown by 35-40% compared to last decade. Total market size of steel roofing industry is 1 MT approx. Growth rate for construction industry is 8.3% and assumed to be 9.5% from 2013-2017(As per 12th five year plan). Per capita steel for roofing and cladding in India is 49 kg as against the world average 180 kg. Apart from the growth in the Infra and industrial segment, changing architectural practices have also impacted the roofing and cladding industry. Modern architectural practice has given opportunities to CoS to introduce new roofing, wall cladding concepts in Indian market. The airports revamping program has also changed

their conventional thinking about large roofs and modern architectural features. Customers are looking for architectural solutions which provide innovative shapes such as convex, concave in addition to new attractive colours.

Prospects and challenges

In the past 5-10 years, India has seen a burst of activity in infrastructure in airports, sports stadia, convention centres, exhibition halls, assembly halls and auditoriums. With the projected growth in the Indian economy and upgrade of existing cities and upcoming smart cities, these kinds of buildings will only increase. If one takes into account industrial buildings,

Top issues in Roofing and Cladding sector

Roofing and cladding, critical elements of a building envelope, have undergone a notable transformation in India. As a result, a whole new generation of buildings have been coming up in almost all sectors ‘from industrial plants, warehouses, airports, railway terminals to malls, resorts, retail outlets, institutional and residential buildings. The reasons are not hard to find booming construction industry with increasing industrial and infrastructure projects, introduction of pre-engineered structures, changing needs of the market with demand for speedy project execution, superior performance, discerning consumers’ demand for quality and innovative options. ‘India’s dramatic growth in the infrastructure, industrial and residential sectors in the last few years, have been a major demand driver for roofing and wall cladding industry. The introduction of pre-engineered buildings, aesthetics, superior technology, durability, thermal efficiency, acoustic properties are other significant driving factors. As per records this industry has registered a doubledigit growth over past few years. ||www.constructionmirror.com/net||

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Focus: India Roofing and Cladding Industry

too, the potential is enormous. There will be a huge shift towards thermally and structurally efficient, sustainable, lightweight roofing elements. Despite the enormous scope, innovations in roofing systems come with their own set of challenges. Sustainable architecture and green solutions are cost-intensive and require huge budgets. They also require skilled labour for installation and maintenance. Further, the unorganised sector, which commands a lion’s share in the Indian infrastructure pie, continues to pose a threat to key players as it offers cheap materials. Such challenges will have to be overcome if the true potential of the Indian roofing segment is to be realised. Growing investments in the construction industry will boost revenue for the roofing and waterproofing industry. With environmental issues gathering attention worldwide, it’s not surprising that several Indian roofing companies are creating roofs that will allow them to fit solar panels on top. The roofs here come in different shapes but they are built or made in exactly the same way as any other roof. Most of these are commonly found fitted in the metros in India, where interlocking concrete tiles are commonly found and installation of solar panels onto them is a straightforward process as they can be removed and reinserted easily. Here, one must realise that it is important that the roofing system integrators find installation ways for interlocking tiled roofs as an on-roof system, using roof brackets made of stainless steel or aluminium. Other types of roofs that see similar installations are made of plain tiles such as clay Rosemary or slate roofs. Over the last couple of decades, the roofing industry innovations have resulted in customers getting a wide 128

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choice of materials and looks for the top finish. Most of the time, innovations address the issues raised by traditional materials, be it installation time, labour effort, durability, sound and temperature insulation, design flexibility and many more aspects. Unavailability of skilled manpower for installation, low product quality and lack of safety awareness, presence of unorganized players coupled with installation issues are some of the challenges that are putting a damper in the growth of the Indian roofing industry. Again, India is a country with several geographical and weather variations across the region. Roofing solutions need to be adapted as per a region’s climate and creating customized roofing solutions that are suitable for each of these regions is a big challenge for the industry. Rising and fluctuating input costs such as that of steel also hamper the supply side of the roofing industry value chain. Under such a condition it becomes difficult for the manufacturer to develop innovative and customized products at affordable costs. The roofing industry is a dynamic industry, with new innovations, materials and tools cropping up on a regular basis. With the rising importance of roofing design and the adoption of “green” products, the sector is all geared up to go through the roof in the coming decades. There are some downsides though to the progress initial investments costs, transport of metal roof components which is an energy intensive activity, insufficient penetration of knowledge, scarcity of skilled workforce and availability of materials of questionable quality. As with any market witnessing exponential growth, many suppliers with poor quality materials have also entered the market. Nearly 18-20% market size is through unorganised sector

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using local raw materials. Due to low quality input materials and lower overheads, these materials are cheaper. They largely dominate the rural market but such products spoil the industry’s reputation. These and other such factors are the challenges ahead for the industry. Economic uncertainty, increasing competition, government regulations and code changes like safety standards, increasing cost of material, limited presence of organised players in roofing industry, unavailability of skilled manpower for installation, low product quality and lack of safety awareness are the key challenges faced by the industry today. Constant innovation, application expertise, training, effective awareness program and having a holistic approach are the other challenges faced by the manufacturers. Unlike the past, the manufactures and solution providers must have a holistic approach towards offering a solution to a project. The roofing and cladding industry is moving towards a One Stop Solution. Evidently India’s roof and cladding industry is still evolving. But according to industry pundits the scenario will change in the next few years. Foreign investment and the increasingly global nature of Indian companies are the factors that will speed up the change apart from demands of the construction industry. The future of roof and wall cladding industry is bright considering the low steel penetration and high demand in construction industry. Today developers are facing a big challenge with the need to decrease the construction period by adopting new construction techniques, materials without compromising on quality. So sooner or later they will need to adopt the new developments in the roofing, cladding and flooring options. Hence the future of this industry in India is very bright. Apparently exciting times are ahead for the roofing and cladding industry in India. ||www.constructionmirror.com/net||

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G uest Article New Launch and Product Informations at EXCON 2017: KYB-CONMAT

||Kalpesh Soni || GM Marketing || || KYB Conmat ||

YB-CONMAT, a subsidiary of Multi-Billion Dollar KYB Corporation of Japan, is a trusted name and market leader in Concrete Equipment Industry. The group has over 12000 employees working in 70 manufacturing locations in 34 countries. Its state of the art manufacturing and R&D facility in Vadodara, Gujarat have already rolled out more than 4500 concrete equipment’s since its inception in 2009.

Expectation from EXCON ’17

KYB Conmat is an Associate Sponsor for Excon 2017 this year and we have great expectations from the show. It is a great opportunity for all the manufacturers to meet the local and international customers in one location. I believe Excon 2017 will bring in more customer footfalls than Excon 2015, because the market sentiment is upbeat. This edition is at the time where we are enjoying good growth as an industry. It is not only a great platform for many international firms to announce their arrival in India, but also gives them a platform for new product launches. Therefore, we look forward for Excon 2017, the premier construction equipment show not just in India but also in South Asia.

evenly in front of the paver, so that the better speed of the paving can be achieved. After successful market reach with our 2 & 1.5 ton elevator, we are now adding 1 ton elevator to our already successful range of high capacity & high speed R&P Elevator. We, are also launching our new range of city paving machines, which will be an economical paving machines for city road projects.

New Launch & Details of products (features Existing Product Brief:Our Rack & Pinion Elevators have been designed & USP) to be displayed at EXCON’17. EXCON - 2017 is going to be one of the biggest business opportunities for the Construction Equipment sector. We are launching our 3 new products Side Discharge Conveyor, 1 Ton Rack & Pinion Elevator & Paving Concrete Machine for city roads at Excon 2017, beside displaying the new generation Stationary Batching Plants, Mobile Batching Plants, Road Paving Machines, Canal Paving Machines, Elevators, Concrete Pumps, Transit Mixers from 6 to 8 Cubic Meter capacity with PTO & slave Engine.

New Product Launch Brief: -

The New Side Discharge Conveyor spreads concrete 130

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considering Indian working conditions and Global safety standards. It offers reduced energy consumption and operating cost, increased reliability and uptime, user friendly controls and centralized monitoring system. It has a robust triple safety system comprising Electromagnetic braking, Centrifugal braking & Ultimate Safety devise to boost user confidence We, being the pioneer in technological advancement in Concrete Batching Plants, introduced Twin Shaft Compulsory Mixer in its full range of Automatic Batching Plants seven years ago, starting with the smallest 20 CuM mobile to 240 CuM stationary Plants. Our major strength is our proprietary SCADA based

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software BatchCon, which is perfect and user friendly interface between men & machine. Our plants require minimal foundation, minimal set up & Installation time, and provide better & faster mixing, hence offering a faster payback. Due to all above, we are awarded with “Sarvottam Manufacturer of Concrete Batching Plant in India” by Builders Association of India in 2015. We offer exclusive range of standard & customized high performance Concrete Paving Machines for Roads & canals. The vibratory cylinder provide better compaction and enables higher rate of production for faster completion of projects, while our rugged & user friendly operator controls, coupled with energy efficient electrical drive system provide better operator comfort and increase productivity, and hence better ROI. Today, over 1000 paving machines are working satisfactorily in the field, making KYB-CONMAT one of the largest canal paving machine manufacturers in the world. We have also successfully introduced Transit Mixers ranging from 6 CuM to 8 CuM, with Slave Engines and PTO in Indian market.

Construction equipment market in the next ||www.constructionmirror.com/net||

Five years

The Indian construction equipment sector is made up of five main segments: Earthmoving equipment, road construction equipment, concrete equipment, material handling equipment, and material processing equipment. India’s infrastructure sector is poised to grow significantly with the increasing demand for development of key infrastructure projects such as roads and highways, rural connectivity, urban infrastructure including metro rail projects, ports and airports, industrial corridors, smart city projects, etc. Investment and implementation of key projects are the concerns of the construction and construction equipment industry. Several initiatives by the Government such as 100 smart city projects, urban infrastructure including metro rail projects, port development, the creation of an industrial corridor and a dedicated freight corridor, would boost the country’s infrastructure development. So, for a growing economy like India the infrastructure sector and construction industry will prosper in the long run.

In this tuff competition age what is our recent point of focus?

We believe the greatest challenge for companies today is not keeping up with their competitors, but with their own customers. Business used to be about getting customers to do what you wanted them to do. But customers don’t accept this anymore. They don’t like to be told what to do. They want relationships based on reciprocity, transparency and authenticity. We began this company with nothing more than a pocket full of dreams and it still takes us by surprise to see how far we have come. We want to drive the market – we don’t want to be driven by it. Our guiding principle is; Change the market before it changes you. We have been changing the products, processes, customer’s expectations along ||www.constructionmirror.com/net||

with their mind-sets at an amazingly rapid pace. But there are few focus points which will never change:• Our commitment towards customers • Our passion for technology • Our determination for Quality & Excellence • Our primary concern for the planet. Now and for the decades to come.

Hurdles like demonetization, emission norm, and GST, how has 2017 been for your KYB Conmat and outlook going forward? Opinion on the impact of GST implementation.

“KYB-Conmat aims to be a major contributor to the country’s growth story”. We have been growing year over year and had a great 2017, and we expect 2018 to be even better. As more and more projects are being announced – be it for roadways, ports, airports, real estate, affordable housing, irrigation, etc. we are aggressively working with our customers to be part of it all. Concrete is the future, and there is no doubt about that, and we are all geared up to do our bit to make India an infrastructure-rich nation. KYB-Conmat has seen consistent growth since 2015 due to the widespread acceptability of our products in the market. We recently celebrated the rollout of our 1000th Transit Mixer from our Vadodara facility. We are looking to expand our market and reach, both domestically and internationally. We also wish to explore unchartered territories in the international market. We have some new products currently in the development stage, which we are planning to launch soon. At the same time, it will also be our endeavor to upgrade and keep our existing product offerings up-to-date with the latest technology. Our aim is to the one-stop shop for all Concrete Equipment needs of a customer and we are working on front foot to achieve that. GST is bound to represent a win-win situation for

both the construction equipment sellers as well as the buyers. GST driven by the principle of one nation, one tax is expected to unify the country economically. One may think that the tax burden has increased with the GST but it has essentially brought several positive changes and consequences for the sector. For instance, until GST was introduced, all heavy equipment used to have a different tax structure in different states. While some states used to levy entry taxes, octroi etc., some demanded entry forms and some didn’t. This always led to huge confusion in equipment selling and moving it from state to the other. GST will put an end to this hurdle along with all its revised GST laws in coming days. Also, we have always followed best corporate governance & never indulged in cash transaction, due to which sometimes we were priced out because of higher tax compliance. Due to Demonetization, we have been able to increase the business volume.

Other development of the industry/company.

We are a part of 98 year old group, having 34 plants and 62 offices across the world. With the emerging new business models and trends in the industries, KYB-Conmat is focused in its drive to provide innovative design, state-of–the-art technology, and quality-based world-class products, which are well accepted in the market because of its prompt & effective after–salesservice and higher performance on price ratio. As a brand, KYB has a vision and goal to expand and create a global presence. With this is in mind, we are planning to increase our presence for sales, and after sales to all the major cities in India and overseas. Apart from that, we will also be associating with new channel partners to increase our presence and to be closer to our customers. Within a short span of time, we will have our large presence in all the major cities across pan India.

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G uest Article

In the last two years the demand for higher capacity batching plants 60 – 240 tph have shoot-up due to road projects whereas lower capacity plant was quite low which forced manufacturers to reorient their products placement as well as make changes in their manufacturing setup; What steps have been taken to keep top and bottom line healthy? As the Government drives the development of road transport infrastructure, there is a surge in the demand for road paving machinery of longer widths of operation, as the contractors prefer to complete the pavement process in a single pass. This creates a need for concrete production to be done at higher rates, requiring Concrete Batching Plants with higher capacities. We sensed an opportunity, and so we upgraded our manufacturing facilities to produce higher capacity plants. We have sold over forty nos. of 120-240 cu.m. plants in last one year. Also, we began exploring possible avenues of addressing the customer’s challenges and providing them with a world-class equipment that would help them achieve their aims and targets.

handling systems, and diversified into Concrete Construction Equipment in 2009 at Vadodara. The moment of glory came with equity partnership from the Global giant KYB Corporation of Japan in 2012. Today the group has 70 manufacturing locations in 34 countries, having annual turnover of over 21000 crores and employing over 12500 professionals. The company has set up a state of the Art R&D and Manufacturing facilities in Vadodara, Gujarat, which spreads over 5,00,000 Sq.Ft. to produce technologically advanced yet economically viable equipment.

Company’s focus on R&D and Innovation

Research and Development is very highly valued at KYB-Conmat. We have a R&D center in India, in Vadodara, and in Japan. We wish to make path-breaking innovations a norm in order to best serve our customers. Innovations are very important in today’s competitive and fast-paced market to stay relevant. Our Research and Development is working in full force on some great products, while also focusing on upgrading our existing products, which we believe, are sure to take the market by storm.

Our products vis-a-vis the competition. Current market share in our product Details about your Manufacturing Base in categories India KYB is enjoying over 85% market share in Japan with Conmat Group of Industries started in 2002 from a small 200 Sq. Ft rented space to manufacture material

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an annual sales of over 7000 Transit Mixers. Its low Slump Handling & High Discharge capacity thanks to

|| NOVEMBER 2017 ||

its special blade design is the hallmark of Japanese Technology & Precision. It offers the best geometric volume and operating cost in the class. The center of gravity is also low due to the welded chassis frame, and offers better operator comfort and road safety. The same design is being produced and offered to Indian customers unlike other manufacturers, who downgrade the design in India to make it cheaper.

After sales services and our unique initiatives in this front

After sales service is one of the most important criteria in Construction Equipment Market, and KYB-CONMAT offer complete after care solutions to the customers, who are increasingly looking beyond the product purchases. They expect the total solution, right from the point of sales till the project completion. We at KYB-Conmat believe that the first machine may be sold by sales personals, but subsequent machines are necessarily sold by Service Engineers. We have much higher repeat customer rate than the market standards. In fact, our loyal and committed customer base helps us in selling to new customers. “We have come a long way since the humble beginning in India in 2009, to become Industry leader in Concrete Construction Equipment, we are now fast expanding our global footprints and our continuous investment in technology and human resources will support our endeavour to become the Global Leader in near future.”

||www.constructionmirror.com/net||

Part of Paver Story

||Mitul Patel|| ||Managing Director||Apollo Inffratech Group|| Apollo Inffratech Group is promoting its HEM, USA make slip form concrete pavers in the Indian market under its exclusive distribution tie-up. Mr. Mitul Patel, Managing Director, Apollo Inffratech Group, informs: “Our HEM pavers have distinct technological advantages that are evident in the simple operations of the mechanical and hydraulic systems that use less electronics and are easy to maintain. Our pavers come in different range of widths from 2.75 to 13.5 meters

for any type of road construction work.” Mr. Patel Says, concrete slip form pavers manufactured by HEM, USA have advanced features like hard surfaced auger for spreading concrete, Temper bar system for better finish of the surface, Bigger & Adjustable Paving pan for better compaction area. Universal hydraulic system allows interchangeability of hydraulic pumps in case of emergency to run the basic functions of the machine. HEM Slip form pavers provides high-

performance paving operation with utmost precision. Apollo Inffratech Group provides complete service and maintenance for optimum utilization of the slip form pavers. Our customers will get service support from commissioning of the equipment during the initial stage to completion of the entire road project. The company also provides operator training and timely availability of parts whenever needed.

One of the Finest Organization: Sun Roofing Company Established in 2011, we, Sun Roofing Company, is recognized among the key supplier, distributor and manufacturer of Pre-Engineering Buildings, Metal Roofing Sheets &related Accessories. Our product line includes Decking Sheets, Polycarbonate Sheets, Pre Painted Colour Coated Roofing Sheets (PPGI, PPGL, BGL), Z and C Purlins, UPVC, Onduline, Puff Panel and pure Aluminium Sheets. We’ve a sound infrastructure unfold across a sprawling house inside the economic territorial dominion of the geographic area of Mumbai, Maharashtra, India. Our product line caters to a spread of industries like Industrial Warehouses, Railways, Sugar and Paper Mills, Automobile Industry, Chemical and chemical Plants, etc. Our organization is spearheaded by Mr. Sanjay Gupta

PEB Buldings ||www.constructionmirror.com/net||

and Mr. Abhishek Kashikar. Mr. Nitin Bhardwaj heads the Salesforce of the organistion.Their acute businessacumen and exhaustive technical information have propelled the tremendous growth of the organization. The other enthusiastic and eager team members put in their all efforts to help grow the organisation leaps and bounds. We offer services like Erection of PEB Structure, Installation of Sheets, Fabrication and Relocation of Structures without any kind of damages. We have our unit spread over an area of 70, 000 Sq.Ft with three in-house cranes 10 tons — 2 EOT & twenty tons one EOT. We Sun Roofing Company are authorized Manufacturer for colour coated roofing sheets of Kamdhenu Limited. Kamdhenu Limited is regarded as one of the prime companies in the field of TMT and Structure, the fame

which they are carry very lucratively in the roofing sheets segment by the name “Kamdhenu Colourmax” roofing sheets,as well. We also are listed as a prime distributor of JSW. JSW is the hot cake in the metal industry. They are the name every one wants to get associated with. One of the finest organization when it comes to the quality of their coils and sheets. We also are the distributors for Onduline. Onduline is a company from France. They fall in the category of premium sheets which are designed specially for Bunglows and resorts and other similar places. It is a premium product much in demand with a very bright and wide usage.

Hi-Rib Profile Design || NOVEMBER 2017 ||

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G uest Article

ESCORTS â&#x20AC;&#x201C;The Industry Pioneer

Rajinder Raina G.M. - Marketing

Escorts Construction Equipment Escorts is geared up for delivering volumes & quality for which a few things are mandatory

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|| NOVEMBER 2017 ||

n extensive grounding in India specific technology is a sine-quo-non for our product development strategy. We shall continue to rely on customer voice to develop products conforming to application & expectations of the customer. This very logic is extended to our after sales support as we make it available as, when & where the customer wants it. Escorts introduced Pick-n-Carry cranes, Vibratory Compactors & Backhoe Loaders in the Indian market. It is the first company that introduced the concept of dealer network for Sales & after sales support in India. We are fast expanding our network as the industry is witnessing growth pan India. We at ECE are currently implementing Total Productive Maintenance (TPM) to take our manufacturing quality to international standards. This will help us deliver high quality equipment in Indian market & make deeper inroads in the international market. As we develop new products & upgrade the existing ones we will ensure that we match upto the global standards of quality. For all the machines that we manufacture,it is mandatory that they conform to applicable norms under CMVR (Central Motor Vehicles Rule). All our equipment comply to these norms & are duly certified by ARAI after due process of homologation testing (Automotive Research Association of India). Currently our R&D is working to get all our equipment ready for the next level of CMVR norms. We will surely complete it ahead of the deadline.

1/Government is the biggest spender in India & for sustenance of demand, it needs to keep awarding/funding works with the same gusto as it has been doing during the past two years. Government has been really considerate & the reduction in GST, from 28% to 18%, will act as a booster dose & this is the right time. With the exit clause in place, EPC contractors working on HAM & PPP models are looking that much more bullish. Interstate movement of machines, old & new, has to be hassle free for which the way bills & road permits have to be as simple as possible. Currently this is a matter of concern. 2/Collaboration & cooperation between the equipment manufacturers & government is a shared responsibility & iCEMA will have to carry on the goodwork. 3/Political stability plays a major role in demand generation in the Indian market place. I can safely say that till the next Parliamentary elections the demand, across all product categories, will continue to see the buoyancy & a growth of 12 to 15% is a given.The momentum is there & the government is keen to deliver growth.The economic indicators have helped boost the Indian & Global sentiment towards India which will help attract foreign investment. I stay hugely optimistic rest is anybodyâ&#x20AC;&#x2122;s guess.

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C Profile Company

Ompany Profile

Making a Mark

136 CONSTRUCTION MIR ROR || NOveMbeR 2017 || 136 CONSTRUCTION MIR ROR || NOVEMBER 2017 ||

||www.constructionmirror.com/net|| ||www.constructionmirror.com/net||

SCHWING Stetter India To Launch 19 New Products During EXCON 2017 The Products to be Displayed at Stall No. OD20, OD28 Schwing Stetter India, one of the prominent concrete equipment manufacturing companies in India will be launching 19 new products in 3200 sq.mtrs space during EXCON 2017, the 9th International Construction Equipment and Construction Technology Trade Fair organized by the Confederation of Indian Industry (CII), India’s premier industry association. Schwing Stetter India’s stall size is the biggest ever compared to the last editions of Excon. The trade fair is scheduled to be held from December, 12th – 16th, 2017, at Bangalore International Exhibition Centre (BIEC), Bengaluru, India. As one of the largest exhibitors at EXCON 2017, SCHWING Stetter’s products target a massive audience, from small customers to large corporates across various segments. Schwing Stetter will showcase the latest progressions in construction engineering with emphasis on latest products, equipment & technology with specific emphasis on efficiency, productivity, safety, environment protection and construction quality.

• Schwing Stationary Concrete Pump SP 1015 D/HD • Schwing Stationary Concrete Pump SP 1315 D, • Stetter Batching Plant M3 • Stetter Batching Plant H2.5J • Gomaco Concrete Paver GP 2600 • Gomaco Kerb Cutting Machine GT 3600 • SCHWING – XCMG Tower Crane XT 335 (8020-16) • XCMG Crawler Crane XGC 85 • XCMG Type Milling Machine XM1003 • XCMG Motor Grader GR 1605 • XCMG Wheel Loader LW180K • XCMG Rotary Drilling Rig XR220D • XCMG Aerial Work Platform GTJZ1012, GTJZ1212, GTBZ18A1, GTBZ22S • XCMG Horizontal Directional Drilling XZ (200/320) D

Speaking on the occasion, Anand Sundaresan, Vice Chairman & MD, SCHWING Stetter India Pvt. Ltd, said, “SCHWING Stetter is thrilled to be a part of EXCON 2017 and we are eager to showcase our products this year. EXCON 2017 is a great platform for all players in the construction industry to come forward and display their recent or new products. We have had a great experience in the previous years, and believe that the massive growth in the industry will make this year’s exhibition a great success.” Speaking on the occasion, V. G. Sakthikumar, Managing Director, SCHWING Stetter Sales & Services Pvt. Ltd, said, “EXCON has provided an excellent opportunity in the previous years to showcase our new products to our existing and new customers. At Schwing Stetter, we have always paid attention to environmental issues and being a concrete equipment manufacturing company, we have always laid emphasis on indigenizing products and introducing newer product range, always keeping in mind of the customer requirements. We look forward to a remarkable EXCON 2017.”

GTBZ18A1 Aerial Work Platform _Articulated boom Motor Grader GR1605 GTJZ1012Scissors Aerial Work Platform

Rotary Drilling Rig XR180D

GTBZ22S Straight boom type aerial work platform

Type Milling Machine XM1003 Horizontal Directional Drilling Machine XZ320D

Crawler Crane XGC85 Rotary Drilling Rig XR220D ||www.constructionmirror.com/net||

Horizontal Directional Drilling Machine XZ200

M3 || NOVEMBER 2017 ||

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Tenders Ref. Number :

25540660

Ref. Number :

25494931

Ref. Number :

25820795

Requirement :

Detailed Design Construction Testing Commissioning Of India International Convention Expo Centre At Sector 25 Dwarka On EPC Basis.

Requirement :

Document Fees :

INR 1,180,000

Setting Up Of Outer Terminal-I Alongwith All Required Associated Facilities On Design, Build, Finance, Operate, Transfer (“dbfot”) Basis” At Haldia Dock Complex For A Concession Period Of Thirty (30) Years .

EMD :

INR 570,000,000

Four laning of Tumkur Shivamogga section from Km 121.900 (Banwara) to Km 170.415 (Bettadahalli) of NH-206 on Hybrid Annuity Mode under NHDP Phase-IV in the state of Karnataka (Package-III).

Document Fees :

INR 48,147

Tender Estimated Cost :

INR 28,590,000,000

Document Fees :

INR 100,000

EMD :

INR 4,814,700,000

EMD :

INR 94,000,000

Closing Date :

11/12/2017

INR 9,403,800,000

Location :

West Bengal - India

Tender Estimated Cost : Closing Date :

18/12/2017

Location :

Delhi - India

Ref. Number :

25493793

Requirement :

Four laning of Sangli-Solapur (Package-IV Mangalwedha to Solapur) Section of NH-166 from existing Ch. km. 314.969 to Ch. 370.452 (Design Ch. km. 321.600 to km. 378.100) of length 56.500 km in the state of Maharashtra on HAM.

Closing Date :

30/11/2017

Document Sale To :

30/11/2017

Location :

Delhi - India

Ref. Number :

25950310

Requirement :

Redevelopment of Gpra Colony At Netaji Nagar. Construction of Type Ii And Type Iii Quarters On Design, Engineering, Procurement And Construction (Epc) Basis Including Operation And Maintenance (Pkg-I).

25378890

Requirement :

RFP for Projects comprising of 9 National Highway stretches (Bundle 1) on Toll Operate Transfer Mode.

Document Fees :

INR 630,000

EMD :

INR 625,800,000

Tender Estimated Cost :

INR 62,580,000,000

Closing Date :

9/01/2018

Location :

Delhi - India

Document Fees :

INR 295,000

EMD :

INR 107,627,000

Document Fees :

INR 120,000

Tender Estimated Cost :

INR 10,762,700,000

INR 110,200,000

Closing Date :

9/01/2018

Document Sale To :

09/01/2018

Location :

Delhi - India

Ref. Number :

25951734

Ref. Number :

25944838

EMD :

Requirement :

Four Laning of Chengala to Kalikadevu section of NH-17 (New NH-66) from km 57.200 (Design km 56.200) to km 104.000 (Design km 101.165) (total length 44.185 km) in the State of Kerala under NHDP Phase-III on Hybrid Annuity Mode.

Tender Estimated Cost :

INR 11,018,900,000

Closing Date :

11/12/2017

Location :

Maharashtra - India

Ref. Number :

25735623

Requirement :

Execution of 4 Nos. of Bridges Including 1 No. Bridge Over High Canal, 1 No. Rub Over Nh 16, 1 No. Rob Over Nh 53, & 1 No. Steel Through Girder Bridge Over River Bari Genguti Under BarithengarhRatnagiri Road New Bg Double Rail Line (Br Chord).

Tender Detail :

Of 4 Nos. Of Bridges Including 1 No. Bridge Over High Canal, 1 No. Rub Over Nh 16, 1 No. Rob Over Nh 53, And 1 No. Steel Through Girder Bridge Over River Bari Genguti Under Barithengarh-Ratnagiri Road New Bg Double Rail Line (Br Chord)

Document Fees :

Requirement :

Construction of a New Integrated Terminal Building at Airport.

Tender Estimated Cost :

INR 8,987,200,000

Closing Date :

11/12/2017

Location :

Assam - India

INR 210,000

EMD :

INR 206,800,000

Tender Estimated Cost :

INR 20,682,700,000

Closing Date :

21/12/2017

Location :

Delhi - India

Ref. Number :

25820776

Requirement :

Four laning of Tumkur-Shivamogga section from km 65.195 (Karadi) to km 121.900 (Banawara) of NH-206 on Hybrid Annuity Mode under NHDP Phase IV in the State of Karnataka (Package-II).

Ref. Number :

25681285

Requirement :

Construction of residential flalts/ houses including development of internal and external infrastructure at pradhan mantri awas yojna.

Document Fees :

INR 28,000

Document Fees :

INR 50,000

Document Fees :

INR 110,000

EMD :

INR 16,800,000

EMD :

INR 5,000,000

EMD :

INR 108,300,000

INR 5,504,802,000

INR 10,833,300,000

Tender Estimated Cost :

INR 839,198,792

Tender Estimated Cost :

Closing Date :

21/12/2017

30/11/2017

Closing Date :

14/12/2017

Document Sale To :

21/12/2017

Madhya Pradesh - India

Location :

Karnataka - India

Location :

Orissa (Odisha) - India

Tender Estimated Cost : Closing Date : Location :

138

Ref. Number :

CONSTRUCTION MIR ROR

|| NOVEMBER 2017 ||

||www.constructionmirror.com/net||

Projects State Government | Uttar Pradesh - India | PID: 170307 Value:Rs. 10 Crore | A retired engineer and an ardent supporter of Prime Minister Narendra Modi has decided to construct a temple in the name of the leader The temple will also have a 100-feet tall metal statue of Modi Announcing the plan, retired assistant engineer from irrigation department JP Singh said like millions of people across the world, he was also impressed with Modi’s work and service to the nation which create a positive image of India in the international community He said the temple would be constructed on the Meerut-Karnal highway in Sardhana area of the district The temple will also have statues of Lord Vishnu and goddess Laxmi in the sanctum sanctorum,” Singh said He said the foundation stone of the temple would be laid on October 23 and added that he would invite senior party leaders for the programme Singh said the entire project would cost about Rs 10 crore and the money would be collected through donations He said many people had assured him of help and the project would be completed in two years We have arranged everything from land to money. The project will be carried out under aegis of a Trust which will be registered by Thursday, he said Singh, however, refused to divulge further details about the Trust He said Modi’s statue would be prepared in Gurajat where the iron statue of Sardar Vallabhbhai Patel was being made and would later be installed at the temple Sardar Patel is the ideal of Modiji and Modiji is our beloved leader. Therefore, his statue should also be made at the same place,” he said | Updated on: 28 - Oct - 2017| Central Government/Public Sector | Punjab - India | PID: 170282 Value:Rs. 194 Crore | Private sector lender HDFC Bank has been given green signal for setting up of a call centre cum residential training centre in Mohali district in Punjab at a cost of Rs 194 crore, a government official said The proposed commercial project, to come up in a build-up area of 38,406.27 square metre in Mohali, is expected to provide direct and indirect jobs in the area The Union

Environment Ministry has given the environment clearance to HDFC Bank’s proposal to set up a call centre and residential training centre in Mohali,” the official said The proposed project has been cleared with certain conditions like obtaining clearances from relevant agencies, including town planning authority, before commencement of the work Already, the Greater Mohali Area Development Authority (GMADA) has allotted the land for the proposed project, which is estimated to cost Rs 194 crore, the official added There is no court case pending against the proposed project, which will not only create job opportunities but also lead to infrastructural development of the area | Updated on: 27 - Oct - 2017| State Government | Kerala - India | PID: 170373 Bids have been invited by National Highways Authority of India for four laning of Chengala to Kalikadevu section in Kerala The scope of work involves four laning of Chengala to Kalikadevu section of NH-17 (new NH-66) from 57.200 km (design 56.200 km) to 104.000 km (design 101.165 km) covering a total stretch of 44.185 km in Kerala under NHDP Phase-III, on hybrid annuity mode (HAM) The project will entail an investment of Rs 2,068.26 crore. | Updated on: 08 - Nov - 2017| State Government | Karnataka - India | PID: 170368 Bids have been invited by National Highways Authority of India for four laning of Tumkur-Shivamogga section in Karnataka The scope of work involves four laning of Tumkur-Shivamogga section from 12.310 km (design12.300 km) to 66.540 km (design 65.195 km) from Mallasandra to Karadi village of NH-206 in Karnataka, on hybrid annuity mode (HAM) under NHDP Phase-IV (Package-I) The project will entail an investment of Rs 842.07 crore. | Updated on: 07 - Nov - 2017| State Government | Jammu-kashmir - India | PID:

170286 Value:Rs. 990.94Crore | Bids have been invited by National Highways Authority of India for construction of proposed Srinagar bypass in Jammu & Kashmir The scope of work involves construction of Srinagar bypass from 0.000 km (Galander) to 42.100 km (crossing of Sumbel road) in Jammu & Kashmir, on EPC mode The project will entail an investment of Rs 990.94 crore and is scheduled for completion in 36 months Corporations/ Associations/ Others | Maharashtra India | PID: 170251 Value:Rs. 378 Crore | Public Works Department, Maharashtra, has invited bids for road work in Maharashtra The scope of work includes improvement to Shankarpur-Chimur-Shioni-Petgaon-Rajoli road (MDR-38 & MDR-48) length 94.47 km, Chimur approach road length 1.27 km, Bhisi-Wadhona road & Bhisi police station approach road length 3.953 km, Masal (Bu) approach road length 2.163 km, Amboli approach road length one km, ChimurSonegaon-Neri approach road with bridge length six km in Chandrapur district, on turnkey basis The project is estimated to cost Rs 378 crore and is expected to be completed in 24 months | Updated on: 26 - Oct - 2017| State Government | Maharashtra - India | PID: 170353 Maharashtra State Road Devp Corpn (MSRDC) has invited bids from selected bidders for construction of the Thane creek bridge (TCB-III) on Sion-Panvel road in Maharashtra The nodal agency has invited bids from pre-qualified bidders for construction of the third bridge on Sion-Panvel road The length of the proper bridge is 1.84 km and the approach road is 1.31 km. Of the participated bidders, Gammon India, Tata Projects & S P Singla Construction, Larsen & Toubro, AFCON Infrastructure, and Simplex Infrastructure were shortlisted The project is estimated to cost Rs 581.4 crore and is expected to be completed in 36 months. | Updated on: 03 - Nov - 2017 |

Get access to 70 Lakh+ New Government & Private Tenders Annualy only on www.TenderTiger.com ProcureTiger helps buyers in automating his purchase & sales using tools like eRFQ, eTendering, Reverse Auction, Forward Auction, eAuction, Indent Management, Contract Management etc. Looking for Tenders Services? For more details please contact to +91-9825079334 or mail us on sales@TenderTiger.com OR register at www.TenderTiger.com

||www.constructionmirror.com/net||

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CONSTRUCTION MIR ROR

139

2nd Annual Summit ........................................................... 49

JCB India ................................................................................ 21

Aggcon Equipments International Pvt. Ltd. ................. 103

Jindal Aluminium Limited ................................................. 55

Ajax Fiori Engineering (I) Pvt. Ltd. ................................ 09

Liugong India ....................................................................... 23

Ammann Apollo ................................................................ 07,144 Mahindra Construction Equipment .............................. 01 Automation Expo 2018 ...................................................... 101

Malik Trading and Demolition ........................................ 109

Apollo Tyre ............................................................................ BC

Macmillan Insulations India ............................................. 129

Balkrishna Industries Ltd. ................................................. 19

Po Tech India ....................................................................... 65

Bhushan Industries ............................................................. 119

Sapna Construction Company ........................................ 69

Case Construction ............................................................... FG-B SDLG ...................................................................................... 15 Conquest Project Pvt. Ltd. ................................................ 127 Shriram Automall India Ltd. ........................................... 17 Constro 2018 ....................................................................... 33

Schwing Stetter ................................................................ FG-A

Escorts Construction Equipment ................................... 135

Sun Roofing Company ...................................................... 123

Excon India 2017................................................................... 37

TATA Projects Ltd. .............................................................. IBC

ExxonMobil Lubricants Pvt. Ltd. ..................................... 05

Tripada Engineering Industries ...................................... 87

Gandhi Automations Pvt. Ltd. ........................................ 03

Uniter Engineering Products ........................................... 57

J.B Engineering & Industrial co. ...................................... 125

VE Commercial Vechicles Ltd. ......................................... IFC

140

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||www.constructionmirror.com/net||

EVENT DIARY November 08-11 2017 Eco Park, Kolkata

www.internationalminingexhibition.com

India has a liberalized FDI upto 100% in mining under automatic route. Mining sector is one of the core sectors of economy. It provides basic raw materials to many important industries.

November 14-17 2017

India Expo-Centre, Delhi, India www.wrm2017.org

The Conference provides an outlet for sharing cutting-edge research, practices, and experiences, from across the world and is intended to be a premier knowledge event for discussing important issues facing the road, transport and mobility sectors.

November 16-18 2017

November 24-27 2017

April 19-21 2018

Punjab Agricultural University Ludhinana

Bombay Exhibition Center, Mumbai, India

INT-EXT EXPO an Interior & Exterior Expo is a meeting point where companies will present the latest trends in the world of Interiors, elaborating technology, innovations, equipment and concepts for the Architects’ & Designers’ community. Expo has been designed to help make lasting business connections. A comprehensive promotion campaign ensures to deliver potential visitors at your booth.

WorldBuild India an initiative by ITE - ABEC, the proud owners of the world’s largest portfolio of build and design shows, is positioned to witness the ever growing story towards the future of Indian construction. It offers an exhibition for the industry by the industry taking into consideration the current affairs, issues, trends and topics during the duration of the exhibition.

www.intexexpo.in

www.mmmm-expo.com

December 12-16 2017

June 07-09 2018

BIEC, Bangaluru, India

Chennai Trade Center, Chennai

www.excon.in

www.internationalliftexpo.com

Investments in Infrastructure is key to India’s sustained Growth and this has been the guiding principle behind all policy initiatives / interventions by the Government of India. The Planning Commission foresees India’s Infrastructure spending to be in the range of US $ 1 Trillion for the 12th plan ( 2012-17).

India is the 2nd fastest growing major economy in the world and inspite of the global economic scenario, the Building Construction & Infrastructure industry in India continues to boom.

December 18-20 2017

August 29 - 31 2018

Auto Cluster Exhibition Center, Pune

White House Event Place L.B Nagar, Hyderabad

Pragati Maidan, New Delhi, India.

The warehousing and logistics community of Western and Southern India comes together at the India Warehousing and Logistics Show to experience, compare and purchase all of the products and services needed to run a successful supply chain operation.

The International Lift expo 2017 provides an ideal platform to all the stakeholders of lift and escalator industry. The International Lift Expo - 2017 intends to bring all national as well international players to the expo and to showcase all types of escalators, elevators, components and accessories.

MMMM 2018 (Minerals, Metals, Metallurgy and Materials) is the 12th Edition in the series and is scheduled on 29 - 31 August, 2018 at Pragati Maidan, New Delhi, India.

November 22-24 2017

January 18 - 21 2018

www.maritimeexpo.in

www.constroindia.org

www.indiawlshow.com

Mumbai

The confederation of Indian Industry (CII) works to create and sustain an environment conducive to the development of India, partnering industry, Government, and civil society, through advisory and consultative processes.

||www.constructionmirror.com/net||

www.mmmm-expo.com

www.internationalliftexpo.com

August 29-31 2018

BIEC, Bangaluru, India

Pragati Maidan New Delhi

It is estimated in the coming future, India will spend more than a, billion dollars upgrading Building constructions, housing and infrastructure developments, according to a new report.

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G uest Article Authored Article by

Volatility of the Metal Markets

||Alireza Moghaddam|| ||Chairman || AMIDT Group||

ith the outlook for the global economy improving, the metals market is anticipating further price gains, especially in the second half of the year. The positive relationship between economic growth and metals consumption is of course well established. From less than 3 percent in 2016, global GDP growth is set to witness a modest pick-up in the current year, to 3.3 percent, and further on to 3.6 percent in 2018. With a strong but volatile outlook for the sector, the global mining and metals industry is focused on future growth through expanded production, without losing sight of operational efficiency and cost optimization. The sector is also faced with the increased challenges of changing expectations in the maintenance of its social license to operate, skills shortages, effectively executing capital projects and meeting government revenue expectations. The World Bank predicted a 16% growth of the metal market in 2017 in the first half of the year, as there was a combination of strong global demand, a slow ramp-up in new capacity, tighter environmental constraints and policy action to limit exports will come into play.But the outlook was not without risks. A fed rate hike, outcome of European elections and impact on the euro and crude oil price movements will impact the outlook in varying ways.The policy pronouncements of US President Donald Trump were being closely monitored. In the second half of the year, there is an increasing evidence of the success or otherwise of his policies, which is sure to induce volatility in the metals market. Without doubt, China is the mover and shaker of the world metals market. China has been destocking due to a credit squeeze; but there is expectation that the credit squeeze will soon ease, and the restocking cycle will emerge in the second half.Chinaâ&#x20AC;&#x2122;s fixed asset investment was running strongly with marked

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improvement in private sector investment in the first half of 2017. While world demand looks positive, it is the supply side that will be the differentiator. The world metals market will surely be sensitive to the potential of supply disruptions. Zinc, lead and copper are three base metals were widely expected to register price gains this year. Essentially a supply side story, zinc seemed to be already in a bull market with mine cutbacks and closures, as predicted in the first half of the year. Copper fundamentals too were set to tighten following mine supply disruptions due to strikes and floods. The World Bank had forecasted a 32 per cent rise in zinc prices this year and 18 percent in case of copper and lead. In the first quarter of 2017, the sector of nonferrous industrial metals rose by 6.65%, but in Q2 they fell by 1.75%. In Q3, base metals were the best-performing commodities sector posting at 10.74% gain and were 16.11% higher over the first nine months of 2017. Base metals not only won the gold medal in Q3, but they are the leader in the commodities asset class so far, this year. The best performing commodity in the base metals sector in Q3 was zinc which rose by 14.97%. Nickel was a close second with a gain of 14.2%, followed by aluminium with a rally of 11.42%. LME copper moved 10.36% higher in Q3. Copper on COMEX was 9.21% high, lead moved 9.48% to the upside, and tin was the laggard posting only a 4.02% gain. Iron ore, a ferrous metal, just 0.32% lower, but that is only part of the story as it rallied sharply and then corrected lower in September. Base metal prices moved to the upwards as the U.S. dollar index moved 2.66% lower in Q2. The Chinese have been aggressively buying metals and other raw materials during Q3. It is likely that there are three

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reasons behind Chinaâ&#x20AC;&#x2122;s aggressive stance in the raw materials. Firstly, there has been change in the Chinese developmental policies under President Xi since 2016. The Communist Party Congress is to assemble in the coming weeks to deliberate on and showcase Chinese economic achievements, and it is probable that buying in anticipation of the gathering means that China will roll out plans to further stimulate growth via further infrastructure building projects. Finally, and perhaps most significantly, the increasing tension on the Korean Peninsula and the potential for escalating rhetoric to turn to war in the region may be causing China to increase strategic stockpiles of commodities. According to the IBEF report, India is the 3rd largest producer of coal. Coal production stood at 453.10 million tonnes in FY17. India has the 5th largest estimated coal reserves in the world, standing at 308.802 billion tonnes in FY16. In 2016, India contributed around 11% of the worldâ&#x20AC;&#x2122;s production of coal. In FY17, production was expected to reach 175.51 million tonnes of iron ore. India has become the 3rd largest steel producer in FY17 with the production of finished steel at 83.01 million tonnes. India stood as the 3rd largest crude steel producer in 2016, while its production increased to 90 million tonnes in FY16 as compared to 88 million tonnes in FY15. India accounted for 5.89% of the total steel production in the year 2016. Rise in infrastructure development and automotive production are driving growth in the sector. Power and cement industries are also aiding growth in the metals and mining sector. Demand for iron and steel is set to continue, given the rapid growth expectations for the residential and commercial building industry. India holds a fair advantage in cost of production and conversion costs in steel and alumina. Its strategic location enables convenient exports to developed as well as the fast-developing Asian markets. ||www.constructionmirror.com/net||

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