With the demand for excavators growing in the market, OEMs are introducing new features to broaden the scope of efficiency and productivity in the machines.
According to an Off-Highway Research report, sales of crawler excavator market in India is expected to reach 30,000 units by 2021, from an estimated 18,500 units in 2017. The market is expected to grow at around 20-25 per cent year-on-year in 2018. The growth is attributed mainly to the ongoing infrastructure development activities in roads and bridges, railways, metro, urban development and Swachh Bharat initiatives. Privatisation of coal mining is expected to improve the opportunity for heavy-duty excavators in mining. All these leads to the need for productive and efficient machines. Excavator OEMs are also focusing on new features and technologies that will push the boundaries of productivity and efficiency.
Major hydraulic excavator producers are bullish on the current market scenario as there is a growing demand for more excavators for various projects. Rajdeep Mitra, National Product Manager (Excavators), Liugong India, elaborates, “Excavator sector is the second-largest in terms of volume in India, after backhoe loaders. The current market size of hydraulic excavators is around 20,000 units per year. The 21 and 22 tonne class dominates in the market with a product share of 67 per cent. These are the mainstay for construction industry and can be found working in almost all the construction and infrastructure projects throughout India. The 8 tonne, 15 tonne, 36 tonne and 50 tonne and above class also find demand in the market with an average share of 8 per cent , 13 per cent, 7 per cent and 5 per cent, respectively. This year, we are expecting a growth of about 17 -20 per cent per cent CAGR for hydraulic excavator market in India.”
Dimitrov Krishnan, Vice President and Head, Volvo CE India, sees a renewed potential for Volvo excavators. He says, “India’s push to expand connectivity among its population and business centres presents a huge opportunity for Volvo Construction Equipment. Infrastructure development continues to be the key growth driver in India’s economy and while the country is making strong progress there is still much to be done.” Volvo offers a complete range of equipment for various infrastructure development projects.
Rahul Shah, Chief Executive Officer, Sumer Group, as a regular user of this equipment, says, “For more than three decades, hydraulic excavators are being used in construction industry for various activities. And day-by-day the demand is increasing since it offers many advantages like improved work output, power and easy manoeuvrability.”
According to Krishnan, coal mining remains the most important sector of the market, followed by iron ore and then limestone. In 2015 Coal India was mining around 550 million tonnes of coal a year and by 2020, it is planning to raise the production to one billion tonnes of coal. This has given a boost to the industry.
On the other mining markets, he observes, “For iron ore, the market is stagnant because of a lack of new licences for production. This is down to a delay in environmental clearances and ongoing lower commodity prices. For the limestone market, activity levels have been low over the past two to three years, with cement plants running at between 50 per cent and 70 per cent of their capacity. However, we are seeing some investment in this sector, which is translating into new equipment purchases.”
However, the long-term prognosis for all sectors of mining remains positive. He adds, “Over the course of the next three to five years, we expect a compounded annual growth rate (CAGR) of between 5 per cent and 7 per cent. If you look at the subdued activity of the mining sector over the past 20 years and then compare that with the current projection, then it is a very positive outlook for this sector.”
According to Mitra, the mining sector is closely related to the infrastructure development of the country. He adds, “As the major focus of the current government is on massive and rapid infra growth of the country, supported by the Make in India campaign, mining will play a crucial role in the successful outcome of the plan. Though there are steps towards privatisation in coal mining and iron ore mining, all will depend on the government agencies and government involvement. Excavators of bigger capacity are used in mining and the demand for excavators will be there in future.”
On the privatisation of coal mining, he says, “Privatisation in coal mining will definitely lead to the demand for higher capacity excavators as private players will require this for completion of the jobs rapidly, meeting the market requirement. The 50 tonne to 70 tonne class excavator market is expected to grow from 5 per cent to 7 per cent within the product portfolio.
Growing productivity and efficiency
Demand for capital equipment such as excavators will depend upon the policy initiatives by the government. Says Mitra, “The current government’s policies are excellent with new cities are being built up, more road projects have been taken up at an increased execution pace, new ports and airports are coming up across the country, and so on. Projects like Swachh Bharat, DDUGJY, PMGSY, AMRUT and Smart Cities, Bhartnet and Housing for All, along with road network development projects like Bharatmala will raise the demand for coal and minerals, which in turn will lead to the growth of market for hydraulic excavators.”
Krishnan is of the view, “In 2018, with the government’s infrastructure push, we expect to see strong interest in the EC200D, which was designed specifically for general construction work. Volvo’s EC200D is the fastest 20-tonne class excavator on the market. With shorter cycle times and outstanding lifting capabilities, it delivers significant productivity improvements for all types of general construction work.
New generation machines come with the latest technologies and features. Says Mitra, “Today, the owner of an excavator is pretty much techno savvy. He knows the use of new technologies such as Telematics and monitoring tools. So technology and the excavator market are going hand-in-hand. All leading OEMs provide Telematics along with excavators in India. Arm regeneration and different modes have been used for ease in operation.”
Digital - going smart
Adding digital technology features have made excavators smarter and intelligent. Telematics remains the major digital feature. Mitra explains,
“The major digital technology remains Telematics where the customers will be able to track and monitor the machines remotely. Geo-fencing is an important feature that customers are nowadays using for a complete control of the machine at the mining or construction site. Telematics has a crucial role to manage and monitor heavy equipment operations, location and the actual working status of the machine. Liugong provides the GPS navigation, road side assistance, remote diagnosis and fleet management in all range of excavators. We can track the actual working time, ideal time, HMR and the fuel consumption for the whole working day. We can also trace the life time working and fuel used. If there is any fault or error in the machine, the notification is directly send to the owner. The special feature of the Telematics shows if these is any instant drain of the fuel.”
As mentioned, the new range of excavators come with new features and technologies. The users need to use these technologies properly to take the benefit of optimum performance of the machine. According to Shah, there is an imbalance in the technology available and its utilisation with regards to excavators. “It’s mainly due to lack of training to the operators and improper periodic maintenance of the machinery. Obviously it is diversely affecting on quantum of work and speed.”
With the machines are becoming more and more technologically advanced, operator training is imperative for optimum productivity of the machine. Says Krishnan, “India will need around 76.5 million strong workforce for its building, construction and real estate sector, according to a report by National Skill Development Corporation. Shortage of talent in the construction industry is a long-term problem that needs to be addressed with better education and training.”
Mitra elaborates, “As we are a dealer-centric company, we inform our dealers to select a few operators and we provide classroom as well as hands-on training. Our experts train the new operators on how to run the machine properly and maintain the machine which is very important from the perspective of the life of the machine.”
Being a general working machinery, excavators are largely available for projects through rental market. So growth of rental market is important from the perspective of excavators. Says Krishnan, “The rental market continues to grow in India and we expect that the trend to continue for some time as the country’s economy matures. Cost remains one of the most important factors for buyers in India, but the purchase price is only part of what constitutes a machine’s overall lifetime cost. Equipment owners and contractors in India have developed quite sophisticated models for calculating ‘cost per tonne’ or ‘cost per km’ for equipment, and this considers a range of factors, including purchase price, operating costs, productivity levels, anticipated maintenance, depreciation, resale value and more.”
Mitra elaborates, “Rental players will always be a boon to excavator market because in today’s scenario, contractors are getting bigger work orders. This will drive the rental players to have bigger fleet of machines, creating more demand for excavators in rental market. Due to this emerging trend, we are hopeful of creating more business from rental market as well. The boom in rental sector is mainly due to the road contractors who largely depend on rental players to use excavators in their projects.”
According to Shah, in future the demand of hydraulic excavators will be huge because of the various major infra projects which government is planning. In the ongoing metro projects also, excavators have a major role to play.
Due to existing surrounding structures, the proposed metro routing is underground at various locations, which needs to be done with specialised drilling machines. Therefore, in the future there will be extensive use of excavators for drilling and digging and other such jobs.”
Demand for hydraulic excavators is here to continue for at least the next 3-4 years due to the ongoing projects. Since excavators are used in the basic construction and mining operations, the applications remain at various projects, irrespective of the project size. The focus will lie in the optimum utilisation of features and technologies associated with these excavators and get the maximum benefit of these machines.
Courtesy: Equipment India, a magazine published by Asapp Info Global Group