The CEA aims to assist its OEM members by exposing them to users and distributors in India and UK component member companies, by introducing them to manufacturers in India looking to expand their supply chain and identify gaps in domestic production, says Joanna Oliver MBE, Director of Global Programmes, Construction Equipment Association, CEA, (UK). Excerpts from the interview.
Could you brief us on Construction Equipment Association (CEA), its objectives and its India-specific strategies?The CEA is the UK’s trade association representing manufacturers of construction equipment, its components, attachments and associated services. The CEA has over 120 members in the UK, ranging from major global OEMs such as JCB, Caterpillar, Komatsu, Terex, etc, through component suppliers to niche product manufacturers. The construction equipment sector in the UK is worth in excess of $13.5 billion each year to the UK and the sector employs over 50,000 people.
The CEA recognises that most equipment produced in India is consumed by the large and expanding domestic market with only a small amount being exported to countries in the immediate region. The CEA aims to assist its OEM members by exposing them to users and distributors in India and UK component member companies by introducing them to manufacturers in India looking to expand their supply chain and identify gaps in domestic production.
By exhibiting at leading exhibitions like bCIndia and running supporting trade missions, the CEA can help its members achieve their targets. The UK has a long history of innovative manufacturing offering the purchaser high-specification products with full after sales service and support.
What have been the sales trends in the global markets, especially for CEA’s member companies?Of course, the last few years since the global crash has been very difficult for the UK manufacturers, as it has across the global scene. However, while most of Western Europe remains flat, some Asian and South American markets are now recovering, and new ones are developing. The CEA runs events in the BRIC markets in addition to global shows in Europe and the US. We also develop niche markets such as Mongolia, Turkmenistan and Algeria. This year we will be taking a UK group to South Africa for the first time to exhibit at the new Bauma Africa show.
How have CEA and its member companies responded to the high regional growth opportunities in terms of investments, resources and logistics?Major OEMs like JCB have a well established manufacturing base in India and others, like Perkins Diesel Engines, who have seen successful sales in India for many years, are now investing $150 million in an Indian plant to manufacture engines. The UK construction equipment sector exports around 70-75 per cent of production and so, is well placed to take advantage of global opportunities as they arise. As an island nation with many ports, the logistics involved with the export of large equipment are relatively simple.
How do you assess the growth potential in India, and on a wider scale in the BRIC nations?Although India is a smaller market for construction equipment than China, the growth continues to be strong and the UK sees it as one in which to expand the export potential. On the component supply side, the Indian localisation legislation means that the UK manufacturers often need to form a partnership with local manufacturers to produce in India to supply to the domestic market.
What is your take on bC India as a business platform for CEA’s member companies?bC India affords an excellent opportunity for UK manufacturers wishing to access the Indian market. Being part of the Bauma and Conexpo families, we know that it will be a well organised and executed event.
What is the total number of member companies participating in bC India? Is there any increase in numbers?There will be 21 UK companies exhibiting at bCIndia, up from 16 in 2011, plus some additional companies who are with distributors that they identified at bCIndia 2011; this gives an indication of the success of the last edition of the exhibition.
How do you view the investment potential in India?The UK Group at bC India and the subsequent trade mission to Pune is designed to inform the Indian and global OEMs manufacturing in India in the construction equipment (CE) sector on the advanced capabilities of the UK CE manufacturing base. The mission seeks to not only introduce UK manufacturers to Indian buyers, but also to develop partnerships between UK and Indian manufacturers and end-users. The mission gives the opportunity for the UK companies to showcase the UK’s special expertise in advanced engineering and a wide range of areas in the CE sector.
What are the challenges and what sort of regulatory reforms are you looking at?As the equipment that is produced in the UK is so diverse, it is very difficult for an association to cover all the regulations involved. But we are able to signpost UK companies in the direction of assistance, working with both the British High Commission and its team of Commercial Officers across India and the UK India Business Council.
Has any of the members already invested here in India, or in the process of investing?Yes, as already mentioned, JCB and Perkins are investing heavily in India, and other companies are exploring the possibilities of partnerships and joint ventures. A number of UK companies source components from India, drawing on the long established Indian automotive sector supply chain which is diversifying into the off-highway sector
Brief us on the initiatives taken by CEA to ensure safety. A number of the CEA’s member companies are involved in the field of safety products. Two of the companies that will be at the exhibition and on the Pune mission manufacturers safe load indicators, tilt monitors, operator safety systems and other safety equipment. The UK is well used to ensuring that all its working equipment meets the stringent standards required by both the UK and European legislation and is well placed to assist Indian users ensure that their equipment operates in a safe environment.