The project awarding agencies must come out with a mechanism to ensure that timely payment is made right upto the bottom of the supply chain, ie, to piling contractor as well as hirer. This compliance should be made mandatory for all to get their next payments/projects, says DV Brahme, Regional Manager, MAIT India Foundation Equipment. Excerpts from the interview.
How do you assess the growth prospects from replacement market?
In the past three years, we have seen a lot of restrictions on capex. We expect a gradual relaxation of these restrictions in the coming years. Quite a lot of equipment procured by the construction industry in the last decade-and-a-half has grown old. The equipment has exhausted the useful economic life and we believe that replacement market will fuel the initial growth in the construction equipment industry.
What is your take on bC India? What are your plans for this mega event?
We hope the foundation of strong future growth is laid during the bC India 2014. Though we are not looking for any instant results during the exhibition, we expect it to be a beginning for the medium to long-term business. We will showcase some new equipment and innovative technologies that our parent company has developed during the recent slow phase and hope the same could be utilisedby the Indian customers.
MAIT has developed a special piling rig for railway jobs as well as low head room rig. We feel that both these products would be interesting for Indian companies considering the emphasis given on railway and metro projects by the new government.
There has been some positive vibes overall since the new government has taken charge. Has this started reflecting on the sales of foundation equipment?
The expected effect of the new governmenton the equipment sales has not been felt till now though we have been getting a steady flow of new inquiries. Of course, since our equipment is capital intensive, we do not expect a sudden upswing in sales. Market indications show that the demand would pick up from January 2015 onwards. We have observed that the big ticket projects often have a longer gestation period due to various factors. We expect the real turnaround or the demand will start by early 2015 and will pick up in the second half of 2015.
What is the current demand for foundation equipment?
Currently there is some demand for foundation equipment from bridges (road and railways).
What are the major challenges in the current scenario?
The biggest challenge is to start the flow of funds/capital as well as trust among different entities like government, project awarding agencies and contractors in the infrastructure industry. Once the flow of fund starts, all the related issues will be automatically taken care of. The contracting companies must get the confidence that the flow will continue and that their investment in equipment can be recovered in reasonable time period.
How far MAIT India has geared up to meet the expected demand?
MAIT being an international company has different activities going on in other markets in the world. MAIT in Italy and India is fully geared up to meet all the expected requirements in the market in terms of equipment supply and service support.
What are the initiatives taken by MAIT India to sustain the growth?
After having experienced the negative growth in the CE sector in the recent past, we are of the opinion that the equipment industry per se does not have any control over the sustenance of growth. As regards competition, we have always welcomed the healthy competition, which actually is a precondition for a vibrant market. Having weathered the bad times of last few years together, we are very much confident that our customers will appreciate our efforts to support them by way of quick service and supply of spare parts during the rough phase and also helping them with leads for foundation works. We are sure that they will remember us for the initiatives taken by us for reducing their downtime. Due to the slowdown in Indian market, we in MAIT India could get time to explore and develop markets in the neighbouring countries.
What is the future potential by 2020?
India needs to create a lot of infrastructure to be built in the near future and we are optimistic that the construction industry will witness a boom in the next few years.