Market indicators show visible signs of economic recovery and infrastructure development. Crawler excavator segment is expected to witness resurgence in sales from 2015 and is expected to grow to 26 per cent. EQUIPMENT INDIA brings out the global and Indian market trends.
Crawler excavators constituted around 30 per cent of all construction equipment sold globally in 2014, while mini excavators contributed another 20 per cent. These are the highest selling types of construction equipment in the world and together constitute over half of the total demand. According to Samir Bansal, General Manager-India, Off-Highway Research: ¨sales of excavators increased steadily since 2009 to peak at 14,940 units in 2011, but declined thereafter to 9,532 units in 2014¨.
Backhoe vs excavators
Crawler excavators constituted 20 per cent of the total construction equipment demand in India in 2014, up from 19 per cent in 2010. Backhoe loader is the most popular construction equipment in the country comprising 43 per cent of sales in 2010 and 47 per cent in 2014. However, despite remaining the largest selling equipment, the share of backhoe loaders is projected to decline to 42 per cent in 2019, while that of crawler excavators would grow to 26 per cent, according to Off-Highway Research.
The price of an excavator below 10T, especially 7T is only slightly higher than loader backhoe, and there is a move towards 7T excavator. While on the global markets the mini excavators grabbed a share of 20 per cent, in India too, the acceptance level is fast increasing - from 64 units in 2008 to 518 units in 2014. Is it an indication of a ´fierce competition´ on the line between the two?
According to Amit Gossain, Executive Vice President - Sales, Marketing and Business Development, JCB India, the market leader with a lion´s share in loader backhoe segment these are essentially two different categories of machines, and the selection of machines is done by customers based on application and utility and not just on price alone. He says, ¨While the backhoe given its unmatched versatility and ease of transportation gives the customer options in terms of different applications and for also inter-site movement; whereas a 10T excavator on the other hand gives a much higher productivity but has limited scope for transportation as it comes on tracks. Thus both require a different site set-up to be justified. We feel that the market for types of machines will only grow from where they are currently.¨
H Jayaram, Managing Director & CEO, Gmmco chips in, ¨Backhoes are utility machines, while a mini excavator is meant for special applications like small excavation, trenching and also to work in uneven surfaces. As such both cater to different league of customers with very few commonalties to compete with one another. Market is evolving from general purpose utility machines to more specialised machines as many customers hardly use the loader attachment in a backhoe.¨
¨The 7T excavator is slightly higher priced than the backhoe loader. The distinct advantage of this machine over the loader backhoe is the higher reach, productivity and reliability. It also lasts longer than the loader backhoe and can work in poor under foot conditions .The 360o swing is also very useful in several job sites. However, the loader backhoe scores over the mini excavator when it comes to mobility. The move towards 7T excavators from loader backhoe based on application has started and the customers will deploy machines more suitable for their application,¨ avers Arvind KGarg, Vice-President & Head, Construction & Mining Machinery Business, Larsen & Toubro.
Sanjay Wadnerkar, Vice President, LiuGong India, is on a different page. According to him, both products have been designed with specific expectations in terms of performance. He says, ¨Excavator will be a better cost effective product than backhoe as there is certain limitation with backhoes in terms of traction, etc. That is where excavators will play important role and when mini excavators are in the market, it will definitely show the advantage over backhoes.¨ He adds, ¨Definitely backhoes will compete because of their multiple applications. There will be big challenge for excavator designers and if the segment is open to competition, the price will come down.¨
Small is useful!
In contrast to the more mature construction equipment markets of Western Europe, North America, Japan, and China, where compact equipment accounts for a large proportion of machinery sales, demand for mini excavators (operating weight below 6T) in India has remained very small indeed. However, mini excavator market has grown steadily during the past decade and signs are that it will continue to grow in 2015 and 2016. Bansal adds, ¨Demand for these machines will emanate from niche applications such as plantations, and in populous urban areas where space is a major constraint. In addition, these machines are also used in agricultural applications and construction activities. With the increasing shortage of manual labour, dependency on machines will continue to rise which will help grow the mini excavator market in the future.¨
According to Gossain, the market has shown some demand for compact machines like the 3T excavator. However, these are still application based, and customers prefer these machines only where there is a genuine restriction of space or weight. JCB has three machines in this range, the 3T JS30, the 8T JS81 and the 12T JS120. Says Wadnerkar ¨I see there is a migration from 20T to lower capacities like 7T and 8T excavators. Going forward, even lower capacity excavators like 3T will come up. So there is an opportunity for compact excavators, only thing is the competitiveness for various brands is yet to be assessed as this is an unexplored market. Pricing will be a major factor.¨
According to Garg 6T to 10 T in India forms the entry level size in excavators and this fits well into all applications from small irrigation, rural roads, brick kiln, foundation for real estate development, landscaping etc. This segment will grow with time in India. He adds, ¨As India gears up to develop infrastructure in a big way, the need for productivity is going up in all sectors. Hence the market is looking up towards efficient and productive machines with high reliability. This is driving up the demand for premium excavators. Excavators are likely to have a better demand growth than other type of construction equipment. The 20T class is the most versatile class and may see a straight line growth.¨
Speaking about the growth prospects of high capacity excavators Garg says, ¨Coal, steel and other metal requirements will determine the requirement for large mining machines while the cement industry will also fuel the demand for 80-100T class excavators with matching dump trucks and dozers.¨
Bansal elaborates on product segmentation based on capacity and applications. The market for machines less than 18.T represents around 37 per cent of the crawler excavator market. The 18.1 to 25.T class of machines represents the single largest segment of the market in the country. They are invariably found working on all major infrastructure projects in the country. This size offers the best compromise between price, machine size and overall productivity, as well as being a good match for the loading capacity of locally made on-off highway trucks. Over the years, this segment has contributed to more than 50 per cent of the total sales. Excavators of over 25.T category are used in mining, limestone, granite and marble, stone quarries, sand pits and hydro-electric power generation projects. The share of this category in the total excavator sales have stayed between 7-11 per cent.
Speaking about the growth potential from mining sector Jayaram had this to say. ¨In the 2 phases of coal block auction, a total of 33 coal blocks small and big auction has been completed by the government. In this many blocks were already producing and balance ready to produce. In many open cast projects, they start initial mining operations either themselves or through MDO / sub-contractors, by using on and off highway trucks like Daimler, for which the matching loading tool would be a 45T class excavator. However, as they go deeper, use of large rigid body off highway dumpers will be necessary for haulage because negotiating steep gradients with load would not be an easy task for on/off highway trucks. That is when the need will arise for investing in large excavators ranging 6 to 10 cu m Hex depending on dumper capacity.¨ He adds, ¨Also out of the 33 blocks auctioned, there are a few underground mines. We at Gmmco also offer from Caterpillar continuous miner equipment package along with support equipment which is a new business segment added to our line from December 2013.¨
India is still in the infrastructure building and development stage and the re-development of existing infrastructure is only being seen in cities like Delhi and Mumbai. A city like Mumbai which faces a drastic shortage of space is accelerating its redevelopment plans, wherein the existing old structures need to be demolished for new and modern structures to come up. It is in such a context that having a system which is faster, safe and ecologically friendly would supplement the growth of demolition segment.
Says Garg, ¨With existing city limits expanding and new smart cities on the anvil, we see a larger role in this segment in rock breaking applications, super long front and adaptability of various attachments like combi-cutters, rippers etc. We are geared up to service the requirements in these applications.¨
Says Manoj Kotru, Managing Director, Alpha Tekniks, ¨Demolition is a good segment for excavators. Many demolition jobs are happening in cities like Chennai, Mumbai, Delhi, etc excavators with demolition attachments are doing well in this segment.¨
Fuel efficiency, faster ROI, and lowest life cycle cost are in vogue in today´s context and most of the OEMs have either upgraded the existing models or have launched new versions with features that meet the challenging demands from the end-user segments. According to Gossain all the above mentioned attributes are a given for any construction equipment, more so for excavators as it is a critical machine. He says, ¨At JCB we have designed our machines around these attributes. In the excavator segment, JCB offers an unmatched range starting from 3T JS30 mini excavator to the 8T operating weight JS81 to 22T operating weight (JS 220LC) to serve the plant hirers, earthmoving and quarrying customer base. All JCB excavators offer excellent fuel efficiency which helps our customers save on fuel.¨
According to Garg, fuel efficiency is probably the best term used in context of fuel consumed and an output produced. He says, ¨We have always been at the forefront trying to inculcate the productive aspect attached to the fuel consumed i.e. tonnes or cubic meters per litre of fuel burnt. Our machines use path breaking hydraulic technology (HydrauMIND) coupled to technologically advance engines from Komatsu stable. This combination is designed and built for productivity and fuel frugality. The inbuilt features like pump engine mutual control, availability of various modes which resets engine HP as per the desired operations, adoption of electronically controlled variable back pressure valve, waste gated turbocharger, high pressure common rail fuel injection system etc provides the best output per unit of fuel burnt for the products in our stable.
With regard to faster ROI Garg says, ¨The hydrauMind system is designed for enhanced productivity of our machines. Our machines have the best design and reliability coupled with a host of features to lower maintenance cost .These machines are supported by the best parts and service support in the industry rendered by L&T.This ensures our machines clock long hours between breakdowns and major overhauls. This factorsenable faster ROI for customers.
As for lowest life cycle cost Garg avers,¨Evolving technologies and design of machines centred on ´care for ´Mother Nature´ has had its advantage on how the machines maintenance programmes are designed. 500 hours engine oil and filter change, 1000 hours hydraulic filter change and a 5000 hours hydraulic oil change interval cumulatively combine to provide the lowest maintenance cost for machines in its class. Added to this, the machine monitoring system helps in maintenance and diagnostics thus improving the reliability and resale value of the machine. This helps in keeping the life cycle cost at optimum levels in Komatsu machines.¨
According to Kotru, all these parameters come from technology which Volvo offers in it products. He says, ¨We are definitely the best in fuel efficiency, especially in higher class of 48T, 50T and 70T. We also use telemetry to collect data on mechanical performance which helps the customers and dealers to plan maintenance schedule.¨
Tracking and monitoring techs
The GPS-based system to monitor the performance and productivity of excavators is definitely going to play a bigger role. Despite market acceptance for such products is very low, in the next 3-4 years, there will be better acceptance for monitoring and control technologies.
All imported CAT excavators are equipped with ´Product Link´ as standard feature. Cat® Product Link™ is a comprehensive remote monitoring and asset management tool, with remarkably intuitive web interfaces that transform data from a customer´s entire fleet of equipment into the essential information required to boost productivity, reduce costs and manage risks.
The premium class excavator market is moving towards use of Information and Communication technology and features of machine tracking. Komatsu uses telematicsthat capture signals from the machine and transmitmachine operational data and maintenance cautions which machine owners, service providers and Komatsu can access this data on smart phones and laptops. This helps thecustomer make the best use of his machine. Since the Indian customers appreciated the value of this feature, it is being extended to other Komatsu models.
JCB launched Livelink, an advanced telematics technology that provides alerts on real time location, maintenance alerts, machine and fleet hours etc. putting the user in entire control of the machine from any location. It can assist in ensuring that the machines are operated at correct times and helps protect them from theft.
According to Bansal, financial constraint and high cost of capital is an immediate problem for the infrastructure industry. However, in the medium term major threat for the growth of construction equipment comes from the political impediments being created in the policy framework. It is expected that the present government will be able to surmount these problems and the OEMs apparently do not face any threat in the long term.¨
Says Garg, ¨Government policies and the economic outlook is the key that controls project implementation and the mini and medium size excavator market. These project based machines, work for an average of 200-250 hours a month and 9-10 months a year. Hence if jobs are not assured for more than 3-4 years users do not enjoy the returns that they would have envisaged at the time of purchasing a machine. The Centre and state governments should put efforts to have a consistent spending in infrastructure development year on year. This is very essential to ensure the investments made on plant and machinery have uniformity in returns.¨
He further adds, ¨The biggest threat now in India is the variation in the utilisationof thesemachines and hence the return on investments made on the machinery.This inconsistency hampers the ability to service debt as per plan and hence dampens the buying sentiments in the market.However premium machine manufacturers are continuing to invest in new product development and latest technologies in manufacturing with a long term view to addressing the needs of the construction and mining industry.¨
The way forward
The growth of excavator market depends solely on the pace at which the government is able to push ahead with the execution of infrastructure projects. The market dynamics and the infrastructural development will play a critical role in deciding the future of the heavy equipment segment. Gossain sum it on a positive note. ¨We are absolutely confident about India´s long term growth prospects.¨ YES - The diggies are all set and ready to scoop out the recession and carve a new trajectory of growth, provided the opportunity is thrown open.
Excavator - Global Sales Trends
Teledipper Arms for Metro Projects
Suretech has tied up with Cosben to market teledipper arm, an ideal solution for deep excavation for metro projects.
Cosben´s telescopic arm is known all over the world. The design of our telescopic arm has been developed to minimise the possibility of breakage due to contact with walls or other structures and for the same reason the hydraulic cylinder of the telescopic section is placed inside the arm. There are several versions of clamshell buckets in order to satisfy the most different requests.
The telescopic arms are used in a wide variety of works already all over the world, from Asia to America, from Europe to Africa. The ongoing commitment in design and innovation has led Cosben to offer products developed and built specifically for the needs of our customers. The success of Cosben is due to the deep knowledge of the markets and the ability to propose innovative and provide technological solutions for various types of deep excavations work. All Cosben attachments are made in extremely high strength steel. Each production stage is closely studied, monitored and monitored by technical experts from design to production. ¨We would have had to use skips, conveyor belts and a crane to remove the material, which would then have been stockpiled on site,¨ ¨The excavator equipped with Cosben´s telescopic arm was three times quicker than using a 5m3 skip. The skips removed 10m3 per hour compared to 30m3 per hour removed by the Cosben´s telescopic arm.
Suretech with its vast knowledge of the market and customers and reputation for excellent after sales support services, was an ideal choice for Cosben.
Drill More with Your Excavator
Digga offers the largest range of planetary auger drives, catering for mini machines to 90T excavators for boring, screw anchoring and piling applications.
Suretech Infrastructure has tied up with Digga Australia for sales and product support for its auger drives, for the Indian sub-continent. ¨It is an honor for us to be associated with world´s leading brand of drilling augers known for their superior quality, rugged construction and unmatched performance,¨ said Sunil Newatia, Chairman, Suretech.
Renowned for being ´bullet proof´ Digga drives have gained a cult following in areas as far as Canada and Russia, Digga Australia is helping to change the way excavators are perceived and used with the release of drilling attachments designed to expand the earning capabilities of excavator owners. ¨Increasing the versatility of machines opens new opportunities for operators,¨ said Lionel Smitka, Manager Marketing, Digga. Instead of just moving digging, operators can now use their excavators to drill holes for piling, anchoring or general augering work such as drilling holes for fencing and foundations. On large jobs time and money savings can be fairly substantial.
We outperform our competitors.
The technology in our new models comes with optimized hydraulics and a regenerative technology which helps us re-circulate the unused hydraulic power to cut down cycle time because mining companies are mainly looking for cost per cum, says Manoj Kotru, Managing Director, Alpha Tekniks, dealers for Volvo CE based in Delhi. Excerpts from the interview....
What makes a customer choose your brand of excavator?
We primarily operate in niche market and the brand we represent, Volvo CE, is high in technology with focus on fuel economy, safety and environment.
We outperform our competitors on efficiency, performance and reliability, so we provide the best productivity and equipment availability in the industry today. We enjoy a sizable market share in the large size hydraulic excavators, which are the preferred choice in mineral mining dominated by coal mining and overburden removal.
Being the market leaders in this product category, the responsibility to deliver highest reliability, latest technology and best in class support system created by Volvo through its dealer network motivates us to set new bench marks. We also enjoy a sizeable share of market in the wheel loader and road construction equipment where we offer our range of compactors, pavers and motor graders.
An average Indian customer is value-driven than feature-driven? What is your take on this?
I partially agree with you when you say customers choices are value driven but the efficiency, technology higher uptime and lowest cost of operations are always on top of a user mind and that is the space where we operate and deliver our products. This space is ever growing as globalization is ensuring easy flow of latest technology to India, and I have no reason to believe that domestic customer should be deprived of the latest offering available on the world canvas which can ensure before time completion of projects, performing well within the planned cost parameters.
Could you share the existing application segment and region wise sales figures?
On an average we sell triple digit units annually of excavators, in varied mining and construction application and equal number road construction Equipment.
Brief us on machine control / tracking technologies offered.
We have the latest technology to control the engine, transmission, and hydraulic systems. Primarily to improve productivity, safety, lower the emissions, and give the customer a better reliability on the product.
The growth of excavator market depends solely on the pace at which the government is able to push ahead with the execution of infrastructure projects.