Crushers and screens address the supply requirements of the core infrastructure raw material inputs. The de-growth in the mining sector and the prevailing slowdown in the road sector has had a negative impact on the crushers and screens equipment (CS&E) segment. Like in many other equipment segments, the original equipment manufacturers in CS&E also have been busy with upgradation of existing range and new launches. The recent lifting of the ban on iron ore mining by the Supreme Court is expected to bring some vibrancy. Agith G Antony tracks the prevailing trends in the market.
It is as simple as that. For India´s economy to be back on track, infrastructure has to be developed, and if infrastructure has to be developed, crushers need to work. There is a clear-cut mantra: ´For India to grow, the crushers segment has to grow´.
While speaking to Equipment India on the current market for CS&E in India, Abhijeet Pai, Managing Director, Puzzolana Fabricators, says, ´Overall, the CS&E market has been down by around 40 per cent. However, the market was better than expected in the last quarter of 2013, and we see some amount of movement coming back. If there is a clear mandate in the forthcoming Elections, the economic growth will be tremendous, which will then be reflected in the CS&E segment. We may witness a good upsurge of demand for crushers and screens by June this year or early next year. We expect the industry to clock a growth rate of over 200 per cent.´
Jaideep Shekhar, Executive Director, Terex Materials Processing of Terex India, expects that the industry to bounce back after the new government is formed. He says: ´We expect that the current subdued market conditions would change once the general elections are over. Majority of the road and infrastructure projects, which have been stuck because of various clearances, should take off once the new government is in place. However, a lot would depend on whether the country gets a stable government or not. Also, we expect the demand to start picking up from Q4 of this year, once the monsoon season is over.´
According to P Ramesh, Managing Director & CEO, Wirtgen India, both construction and mining sector have witnessed severe slowdown in the last few years and has affected the market for crushing and screening plants. He says, ´We expect the market to revive by the end of this year or early next year, once the bottlenecks facing infrastructure segments are addressed.´
Supreme Court´s decision:
A welcome move
On the micro level, the lifting of the ban on iron ore mining in Goa is expected to bring some positivity back to the construction equipment (CE) industry. ôIt is good that the Supreme Court has lifted the ban on mining in Goa. As far as the construction and mining industry is concerned, it will take a while to make an impact as there is a lot of idle machinery. Also, many people have to restructure loans, which were not serviceable due to lack of work. Once all the idle machinery are allocated, a clear picture will emerge. On the whole, the Supreme Court´s decision is a welcome change and will help improve the sentiments of investors,´ says Amarnath Ramchandran, Vice President-Product Engineering, LeeBoy India.
´Goa is a good region for us and the lifting of ban will definitely see an uptake in the activity of our customers. However, to see traction in new equipment sales, especially for crushing and screening equipment, may take some more time as there is enough idle machine capacity in the market. Lifting of the ban is definitely a welcome measure as this will mean direct or indirect positive impact for most of our businesses,´ says Dr Krishna Prasad, Executive Director, Terex India.
Says Kallol Mahalanabis, CEO, Taurian Engineering, ´The recent lifting of the ban on iron ore mining has brought some vibrancy. The ban in mining in Goa has had an adverse impact on the CE industry. There was no growth for the last three years. As on today, the market is estimated at about Rs 800-1,000 crore. We were anticipating that the value will go up to Rs 5,000 crore but it did not happen, largely due to policy paralysis. Also, there are so many second-hand machines in the market at cheaper rates, which is hurting the entire industry. Once a stable government comes into power, then only we can expect the market to stabilise.´
However, Pai doesn´t think the demand will be high. He says, ´I don´t expect a huge spurt in demand by this decision. However, there will be some amount of business, especially for mobile and tracked plants. Goa, Bellary (Karnataka) and Barbil (Odisha), together which forms the major iron ore belt can generate considerable amount of business.´ Pai, however, has welcomed the decision of the Supreme Court. He thinks that this decision was required at this stage as it may provide the much-needed boost to the otherwise ailing industry.
Coal sector: Driving growth
Pai states, ´The opportunities in the coal sector are at least five times bigger than in the iron ore sector. However, there is a lot to be done. Still there is no clarity on land clearances, environmental issues, etc. Once these things are cleared, at least 150 million tonne capacity will be added in the next couple of years. Of 150 mt capacity, about 70 per cent will be open-pit mining and the rest [30 per cent] will be underground mining. This will be a major demand driver for CS&E segment. In fact, we have developed solutions for both open pit and underground mining. Mining per se, has not grown as expected; however, in the contrary, imports have gone up. It is a necessity that coal mining is increased to meet the demand from power plants.´
Says Mahalanabis: ´India has a huge mining potential especially in the coal sector, which is yet to be tapped. The potential to tap or not to tap lies with the government because it involves a lot of policy initiatives like environment-related issues. So far, the government has not taken proper measures for environment protection in mining. In roads and highways, there is a huge potential for aggregates as the National Highways Authority of India (NHAI) has approved many projects, but did not take up due to market downturn.´
Commercial sector: A huge potential!
According to Pai, the aggregate segment has slowed down drastically. Unless the realty sector moves up and the liquidity crunch is addressed, nothing much will happen. Some markets (Karnataka, etc) are doing well, but bigger markets (Delhi and Mumbai) are at all time low. We are at the bottom-most level. The demand will sky rocket in another year or so. Rail corridors and interlinking of river are massive projects that may bring up the demand for aggregates.
Says Ramesh, ´Growth potential for crushing and screening for sand manufacturing is high because there is a ban on excavation of river bed sand in most of the states.´ According to Mahalanabis, manufactured sand is being used in India for a long time. For eg: the Mumbai-Pune Expressway, which was built in 2000, used only manufactured sand. So it is already there. Only thing is that the government should put a legalisation on sand mining stating that only crushed sand can be used and riverbed sand cannot. But there are a few problems in using crushed sand as it contains a lot of micro fines depending on the type of rock and you should have an elaborate washing system, which will require a lot of water. You should also have an elaborate system to dispose of the effluent. All these involve cost. So in order to implement such systems the government should provide some incentive schemes to help the manufacturers.
How challenging is financing in today´s scenario especially for the mid-segment players? Says Pai, ´Financing has become really tough. Most of the financiers have tightened their finances and are demanding three collaterals. An individual buyer is very much worried as there is no clarity in zoning of quarries. In fact, there are lot of policy issues with regards to zoning. We believe the mid segment will grow further because aggregate is a core raw material for the development of infrastructure, and anybody who invests is bound to make profit provided he is in the correct zone of a quarry.´ Shekhar says, ´Most of the new customers find it difficult to get financing since they do not have any prior experience of operating a crushing plant or have no track record of having successfully completed an aggregate supply job. However, we have seen that most of these new customers get backing from the main contractor, who is typically a large infrastructure company.´
Change in buying patterns
Shekhar says, ´In the last few years, we have seen a shift in the customer profile. Many of the large corporate companies, who were very active in road and infrastructure segment, were purchasing their own fleet of equipment. Over the last couple of years, most of these companies have shifted to contract model, and now are looking for contractors to purchase the equipment on their behalf. This has given rise to a large retail market and there are many new entrants. While this is a good progress for the industry as a whole as it increases the customer base, this also throws some challenges in terms of training, technical knowledge, etc. We at Terex have been investing significant resources in training the staff and operators at site as well as our manufacturing unit.´
According to Pai, the customer is becoming more advanced and demanding as he has plenty of options. He says, ´We feel that the service requirements are becoming much more competitive. We have our own foundry, which gives us an edge over our competitor. At Puzzolana, we make spares in-house, and it is readily available at more than nine locations. Our aim is to give spares within a day.´
Speaking about the market trends, Ramesh says, ´Indian market has predominantly seen a stationary and semi-mobile tyre mounted type of plants. In this segment, the domestic players have a good market share. However globally and also in India, the market is slowly moving towards mobile track-mounted machines, and in this mobile segment, Kleemann is a strong player. Consolidation however will happen for this segment also.´
Says Shekhar, ´The industry has been transforming and the shift is from traditional stationary plants towards mobility. Modular plants fit in between both these categories. They are stationary plants but with no heavy civil foundations, and are much easier and quicker to install. In case of need to shift these plants, they are equally quick to dismantle and transport. Also, there is minimal residual loss since there is no heavy civil structure. The modular plants also give the customers an opportunity to have a certain degree of customisation, which is not easy in mobile plants.´
Shekhar sums up. He says, ´We expect the industry to move towards the path of growth once the general elections are over and a new stable government is in place. This is required so that new investment can be made in infrastructure industry and the pending projects in the mining and infrastructure sector are revived.´
Says Ratan Lal Kashyap, Vice PresidentùProcurement, GR Infra Projects, ôTechnically the plant should be synchronised in terms of capacity with each stage. Flow sheet should be fair and clear to ensure delivery of rated capacity. Vendor should be ready to take annual maintainence contract (AMC) of plant from day one ensuring good service level agreement (SLA). Service during warranty and after warranty should be assured with availability of spares. Vendor should have an established reputation with good feedback from existing customers.´
It´s not the just the technology but also the maintenance part that needs to be taken care of while selecting a plant. The importance of using original spare and wear parts cannot be overlooked. Not only does it reduce long term repair costs but also makes the machine work as good as new one.
Says Kashyap, ´Being original and buying original is essential. That´s why we believe in buying original parts for our machines. We never buy pirated parts and don´t even advise our partners to do so. Short term gains can be disguising and can prove to be fatal in the long run.´ He adds, ´The key parts like filters and all, we always buy from the original manufacturer and keep it in stock for later use, but never buy pirated parts. Our workshop in Udaipur is the best in the industry if you see. That´s where our machines come for a check up and maintenance and are then sent to the next site for the next project.´
Case study Project: Buddha International Circuit (BIC). The $400 million project - 5.1 km F1 race track - was designed by renowned German architect and race track designer, Herman Tilke.
Execution Agency: Jaypee Group
Subcontractor: Oriental Structural Engineering
Challenge: Two expansive straights, blend into an interesting mix of 16 curves and corners, making for an exciting challenge. These steep accelerations, high speed sharp bends and screeching brakings transfer all the brute force of roaring engines of F1 cars onto the asphalt tracks. These asphalt tracks have to take a lot of beating far exceeding that of a carriageway of highway and hence have to be designed to deliver higher strength. To achieve higher strength, aggregate quality and specification also has to be superior.
Plants used: The plants supplied to JP were 300 MTPH 3 stage plants with the configuration of Metso secondary Cone Crusher HP300 and Metso Barmac VSI B9100 SE.
Capacity - 300 MTPH, 3 stage, fixed plant ´ Grizzly feeder - VMO T 46/12
Primary screen - CVB 2060 - 2D - Cone crusher - HP300
Barmac VSI - B9100 SE (double drive, 2x220 kW)
Product screen - CVB 2060 - 3D - Product fraction - -40 mm
Says Anjan Meher, DGM (Plant & Machinery), Oriental Structural Engineering, ´In the F1 tracks, we had followed the British Standard specifications so maintaining the quality of works was more challenging. Timelines were very strict too. Metso machines were quite efficient and hence 80 per cent of the raw materials came from Metso machines.´
Says Niraj Srivastava, Vice President, Technical Support, CSR, ´We are proud that Metso plants have contributed to the F1 race tracks. Having proven technology with fixed shaft cone crusher, rock on rock VSI technology and high efficiency screens and feeders, Metso machines produced aggregates meeting tough international specifications laid down by the authorities for preparation of world class F1 Track in India.