Out of the total market for the CE industry, the share of crushing and screening equipment (CSE) is pegged at 13 per cent - that is, US $ 30 billion across 2012-17; what's more, the CSE market is projected to grow at the rate of 15-20 per cent YoY for the next five years. There is a definite surge in growth as manufacturers are flocking to tap this potential. While the existing OEMs see a need to augment the capacity so as not to lose out to the new entrants, the new players strive to provide state-of-the-art technology, ensuring commercially viable solutions with lower cost-per-tonne to the customer. Thanks to increasing competition, CSE is a segment which has been upgrading its offering to world standards. Agith G Antony digs the details out from the major players in the market, with special focus on the user industry.The potentialThe crushing and screening equipment market, dependent on the growth of infrastructure projects, has seen a rapid growth in India in recent years. The demand for this equipment has risen, fuelled by the growing demand for aggregates and road-based material. Speaking about the huge growth potential of the CSE segment, GN Raju, Chairman & Managing Director, Nawa Engineers & Consultants says, "The market for crushing and screening equipment is projected to grow at the rate of 13 per cent per annum YoY for the next five years, and this rate of growth may be slow if we are to go by the ambitious projections being provided by the Government of India. NHAI itself is rolling out road contracts valued at thousands of crores of rupees. DMIC project and the numerous road projects being announced across India again indicate huge investments in the development of infrastructure. All these projects require a supply of aggregates and the 13 per cent growth rate may not be enough to provide the required amount of aggregates. Hence, there will be a huge demand for more crushing and screening equipment to supply this quantum of aggregates. So, we can say with a high degree of conviction that the CSE industry will see a major growth over the next five years."Major playersA decade ago, maybe up to the late 90s, the CSE market was dominated by a couple of global OEMs such as Metso Minerals and Sandvik. The entire scenario has changed drastically, as the demand for aggregates for the development of infrastructure projects has rocketed, resulting in the entry of more players, global as well as domestic, all vying for a share of the market. After the earthmoving segment, it is the CSE segment that has witnessed the successful entry of domestic entrepreneurs; either indigenously developed designs, or through technological collaborations and JVs, these companies have created a niche market for themselves. As one of the OEMs noted, 'the existing OEMs see a need to augment the capacity so as not to lose out to the new entrants, the new players strive to provide state-of-the-art technology, ensuring commercially viable solutions with lower-cost-per-tonne to the customer.'Puzzolana Fabricators is one of the names to reckon with in the domestic circuit. From a modest beginning, the company has transformed itself into a hugely successful engineering organisation in design, manufacture, installation, and commissioning of crushing and screening plants on turnkey basis. As per the company claims, it is the first indigenous manufacturer of cone crushers, and trolley-mounted crushers in the range of 100 to 300 TPH. "Market potential is approximately 10,000 million for various types of crushing and screening equipment. Puzzolana is market leader in construction and infrastructure sectors, says V Venkataramana, Vice President, Puzzolana Machinery Fabricators.Nawa Engineers is another top domestic player that has made a successful entry into the CSE segment with its own indigenously developed designs and product range. "Nawa has been a prime mover in this CSE industry since 1998 and looks to consolidate its position to be one of the top three CSE companies in India by 2015," says GN Raju, Chairman & Managing Director, Nawa Engineers & Consultants.Proman Infrastructure Services entered the scene in 2001 with a unique alternative approach, as the company claims, and went on to technical collaborations with reputed global players. "Proman is one of the key players in high quality aggregates and the manufactured sand segments. We work with some of the best companies in the world and manufacture all our equipment in India under their collaboration," says RS Raghavan, Managing Director, Proman.TIL, with its cutting edge technology and unique, integrated customer support, is a recent entrant in the market with a licensee agreement with the Astec Group for the manufacture of crushers and screens in India up to 450 TPH. "TIL's agreement with the Astec Group of companies will make available to the Indian market the best technology made in India by TIL, be it static plants, mobile or the track plants and the screens. TIL and its partners are looking at the Indian market as a significant driver for growth and aim to be very significant players in the Indian market over the next few years," says R Nandagopal, Vice President - Equipment & Project Solutions, TIL. According to him, the industry is poised for growth and while conservative estimates may put it at 15-20 per cent YoY, the projects envisaged in the time frame will take this number much beyond that.No wonder then, that global OEMs have been investing not only in augmenting existing capacity in India but also in enhancing the service network. Terex Group is a prominent player that merits mention. The Group continued its global strategy in India by having different entities of the same group competing with various product baskets, catering to specific market segments with a considerable degree of success. Powerscreen of the Terex Group entered the Indian market in 2001 through its dealer Voltas, and today it controls the major share in tracked crushing and screening equipment in India. Says Rajen Khoda, Director - Sales, South Asia & Middle East, Powerscreen, "In India, Powerscreen has continued to grow with the economy through the provision of crushing, screening and washing equipment supported by first-class customer support services provided by Powerscreen dealers. Currently, we have the largest market share of tracked crushing and screening equipment in India." He further adds, "By investing in the local economy with this plant, we have signalled our intent to continue to grow with India. Looking forward, we are committed to supporting the continuing development of the Indian market."Terex Finlay, another separate entity from the Terex Group, was set up in 2004-05, and has already made successful inroads into the tracked plants segment.In 2009, the Group set up a third entity, Terex MPS to tap the huge potential in the stationary and modular plants. "The demand for the static and wheel-mounted plants is quite high in the aggregate and construction industry. Customers prefer to use all electric plants and this has lower capital investment. Since our entry into the Indian market with static and wheel plant offerings a couple of years ago, we have received great support from our customers and we aim to be one of the market leaders in wheel and static plants. We have also launched the modular plants from Terex MPS and intend to add more offerings in this segment over the next few months," says Jaideep Shekhar, Director of Sales & Marketing, Asia.Another recent entrant from the global market is Anaconda, Northern Ireland. "The potential for Anaconda in India is excellent but it is about getting the strategy and the partnerships in place to address the opportunities and overcome the obstacles. We see a very good opportunity in the construction, demolition waste and solid waste recycling market, and will focus on that area as well, as our equipment is designed and built to cater to that industry as well," says Saurabh Khanna, Senior Business Development Manager-India, Anaconda Equipment International. In January 2011, Anaconda established its marketing office in India to ensure its long term commitment to the market. "We want to establish a network of dedicated and respected distributors who are close to their respective markets and customers. This network of distributors/dealers is essential to provide the equipment and after sales service necessary in our industry. We plan to have countrywide coverage in the middle to long term with regional distributors rather than one or two distributors covering the whole of India," Saurabh adds.Market trendsSpeaking about the prevailing trends, Jaideep has this to say, "The market in general is still dominated by the stationary and wheel-mounted mobile plants, especially for the construction industry. We have seen greater interest for track- mounted crushing plants in the mining sector, especially the iron ore mining which is primarily contractor-driven market." Jaideep further adds, "I believe the need for mobility in a particular project still decides the choice between stationary and mobile plants and the wheel-mounted, meet most of the needs of the customers in construction/ aggregate industry. There also has been a shift from the traditional stationary plants to the modular plants as the customers do not prefer to invest in heavy civil work which not only is expensive but also cannot be relocated to the next site once the project is complete."According to Rajen Khoda, "Previously, tracked plants were suited mainly to the iron ore segment. With the slowdown in iron ore mining, OEMs have revisited their product portfolio to suit aggregate crushing and screening. Tracked mobile plants are catching up and every year we see the market share of tracked mobile plants increasing."Speaking about the shift in terms of higher capacity plants, RS Raghavan says, "The capacity of the crushing plants are shifting to >150 TPH. The reason being there is a shift in these plants to be automated, able to handle large boulders of >600 mm, reduce dependency on the labour force that the traditional crushers have, thereby making it cost competitive. It would be fair to say that today anything less than 100 TPH is not economically viable when you look at the investment, involvement and importantly the return on investment."Changing patternsPointing out the growth in demand for aggregates and its impact on the buying patterns of the customer, Nandagopal says, "There is huge potential in India and the manufacturers are flocking here to tap this potential. The existing manufacturers see a need to augment the capacity so as not to lose out to the new entrants in the market place and the new entrants can be successful only if the technology is state-of-the-art and ensures a lower cost per tonne to the customer. However, one needs to understand that technology alone without support will not cut ice with the customers in India any more, as these customers have graduated from looking at a product to seeking a solution, product, support and other value-added services, all of it. The purchasing power of the customer has definitely gone up and with financial institutions coming forward to support a quality purchase decision, there is no looking back for a manufacturer who is able to add value to the customer."Environmental commitmentThere is a need for better technology to improve efficiencies and it would be the responsibility of the manufacturers to bring to India the state-of-the-art technology to meet the growing demand while there is a balance between environment protection and the growth plans, according to Nandagopal. "The major concern in the immediate future is the availability of sand for construction and with natural sand not being made available, it is important for the construction companies to focus on the manufactured sand. The growing demand will also bring into focus the ability to reclaim and recycle the construction and demolition waste like concretes, reclaimed asphalt pavements, etc. This undoubtedly will be an environmental-friendly approach which will lead to a sustainable growth. It would not be out of place to mention that the developed countries are far ahead in the use of recycled materials and all we would need to do is adopt the best practices followed globally which would be a quick start for us," Nandagopal says, summing up the situation.Financing of CrushersThe market size for crushers by 2015 as per McKinsey report would be 1,000 units in India per annum. The crusher's classification is based on tonne per hour it can crush. The preferred tonnage segment are 100 TPH, 150 TPH, 200 TPH, 250 TPH & >300 TPH. Screening unit goes along with the crushing unit. Average age of the crushers is seven to eight years with average crushing per day 12-14 hours.Financing to the top-end customers who go in for high capacity crushers is easy to address since these customers are well organised and have strong cash flows which enable them to access various means of finance from NBFC's to banks to other sources such as buyers credit. The typical application for these customer segments are for work orders received from NHAI, for construction of road, tunnels, dams, bridges; second is real estate/industrial construction and the third is for mining sector (coal, iron ore, limestone.)Customers in the lower end of the crusher market are working in small sized quarries, sand mining , iron ore mining etc,. In the past 12 months or so, all these sectors have been hit at various times on pollution and other clearance related issue resulting in stoppage of mining/quarrying activity and hence the cash flow of such operators have been impacted adversely. Even without the regulatory issues, the customer segment itself is highly unorganised, ie, these customers do not have strong financials and hence making finance available to them at competitive terms is difficult.Given that the regulatory issues are yet unaddressed, we do not intend taking an aggressive stance on financing these assets to the retail segment of customers but would rather concentrate on mid-tier to large sized customers who have proven cash flows.Overall, we expect that the market will grow steadily in the larger capacity crushers and expected growth is 20 per cent CAGR. However, on the smaller capacity crushers, we see it as a sector which would be dominated by local manufacturers and smaller players.