P Ramesh, Managing Director & CEO, Wirtgen India
For a healthy growth, the requirement is to clear the bottlenecks in infrastructure sector, the road sector in particular.
Currently, the road equipment sector is experiencing a slowdown, due to a number of road projects being stalled or going slow. Also, the depreciation of Indian rupee by over 20 per cent in the last quarter has made imported machines more expensive and this has led to a reduction in demand, where customers are also looking at used or rental machines.
During the period 2010-12, more than 11,000 km of BOT projects have been awarded, but hardly ten per cent of these projects have seen progress, due to issues already mentioned. BOT projects will take off depending on how fast the government can address the issues like long-term funding for infrastructure projects, land clearance and also about introducing more stringent pre-qualification criteria for contractors bidding for road projects. Growth in this sector will pick up only if the government ensures a good mix of both BOT and EPC projects.
However, the work on state highways for certain states like MP, UP and Rajasthan, has seen a pick-up in activities and that's the reason why the road equipment sector is able to sustain itself. However, the next one year will continue to be challenging for this sector as it takes time for the various steps taken by the government to translate into work on the ground.
For a healthy growth of the sector, the requirement is to clear the bottlenecks in infrastructure sector and in particular, the road sector.
Wirtgen India is using this downturn as an opportunity to strengthen our position in market by increasing our sales and service network,offering new products to the market, also introducing innovative technologies to Indian market like cold milling and recycling, and we have already initiated many steps in this direction, the results of which will soon be seen. We are also expanding our manufacturing base in India, and will start producing the Kleemann range of crushing and screening plants for the Indian market by January 2015.
We have also launched tandem rollers for Indian market, further to our first Indian product - soil compactors, and will shortly start producing Vogele pavers for the local market.
We are expanding our manufacturing base in India and will start producing the Kleemann range of crushing and screening plants for the Indian market by January 2015.