Expansion time for construction equipment firms as demand picks up
Industry players like Schwing Stetter India and Ajax Engineering are expanding their capacities to cash in on the impending surge in demand
Chennai: Construction equipment companies are smiling as demand from core sectors like roads, railways, irrigation, energy and other sectors for their products is picking up, said top officials of industry majors.
Industry players like Schwing Stetter India and Ajax Engineering are expanding their capacities to cash in on the impending surge in demand.
“It is smiling time for us. Business during September and October was better than corresponding period of 2019. Similarly, November business is looking good,” VG Sakthikumar, Managing Director, Schwing Stetter India, SAID.
According to Sakthikumar, the machines of the rental players have got deployed in projects.
“The demand for construction equipment is picking up for the past couple of months and it is expected to accelerate further owing to the demand from sectors like roads, railways, energy, irrigation and others,” Jagadish Bhat, Managing Director and CEO, Ajax Engineering, SAID.
“The demand is from highways, railways, metros, and sectors. Bulk of the proposed $1 trillion investment mentioned in the National Infrastructure Pipeline will happen next year,” Sakthikumar said.
The companies are hoping to close this fiscal with better revenues than what they had expected when the Covid-19 pandemic lockdown happened. Schwing Stetter India makes concrete mixers and other machinery used in construction works. It also sells earthmoving equipment of XCMG, China. Sakthikumar said with the demand picking up, the company will take some time to shift some of its plant and machineries to its new Rs 230-crore plant being built in Tamil Nadu.
“The production is going on in full steam at our existing facilities while component suppliers are trying to match our needs,” Sakthikumar said.
Ajax Engineering’s Bhat said the company started seeing recoveries from August onwards and in October the performance was good. “During the first six months, the turnover was about Rs 250 crore. Going by the enquires and orders we expect to close this fiscal with a turnover of about Rs 800 crore,” Bhat remarked. Apart from demand for self-loading concrete mixers, there is good demand for boom pumps and concrete pumps.
“These machines are bought under finance and the non-banking finance companies (NBFCs) have started loosening their purses. After October, there is a general momentum but has not touched the pre-Covid levels. After November, increased disbursals are expected,” Bhat said.
Ajax Engineering has decided to invest Rs 140 crore this fiscal in setting up a new plant for making slip form concrete pavers, batching plant and also in capacity expansion, Bhat added.
“We have built a slip form concrete paver which is now being field-tested. Currently, concrete pavers are imported, each costing about Rs 10 crore. Our product is thus an import substitute,” Bhat said.
“We should be competitive by 20-25 per cent as compared with imported machines. We also plan to export the machines,” Bhat added.
Normally about 100-150 slip form concrete pavers are imported per year by India.
Another Rs 40 crore will be invested at its existing plant in Gowribidanur Industrial Area, Kudumalakunte village, Karnataka to increase production capacity of the transit mixers, and concrete batching plants.
