Besides a fascination for super-sized construction equipment, my interest in this space is also due to its overlap with agricultural machinery. I spent a day exploring and learning a great deal about various types of construction equipment on display at EXCON 2023 in Bengaluru. Here are a few observations.
- Electric and hydrogen-fuel based engines are set to change the sector massively. Among the launches were JCB’s hydrogen fuel based backhoe-loader. It is powered by a 55 kW engine. A 120 liter H2 fuel tank supports 8-10 hours of operation. There is much excitement about this among users of backhoe loader, if the hydrogen fuel ecosystem (storage, refueling, machine operation reliability etc.) works out. The economics of this fuel type seem to stack up better than diesel-based engines that consume about 5 liters of diesel per hour of operation. This can make a big difference for farms, as much as construction. Many farmers do not undertake earth works on and around their farms because of high costs. Volvo showcased its electric range of excavators and wheel loaders. A presentation at the venue laid out the costs – cost of electric vs cost of diesel excavator. There is an undeniable proposition there, as long as the equipment owner can afford the capex on electric-powered equipment.
- Barrier to enter manufacturing is getting lower rapidly. ICEMA‘s data suggests that there are more than 50 OEMs in India. This number should grow given the enormous mechanization need in the country matched with a very large investments made through public sector projects – from roads (Gati Shakti, Dedicated Freight Corridors, Expressways) to ports and warehousing. The space of excavators, loaders, telehandlers and similar equipment for sub-heavy, i.e. light to medium application work is seeing several new entrants. This is enabled by an expanding set of component suppliers that specialize in specific parts like hydraulics, pumps, electricals, structural elements and engines. The growing depth in specialized component suppliers in the industry will bring benefits to end consumers as well. It will mean that equipment owners can customize as well as draw long term value from their equipment because of wide variety of parts and spares availability. Increasing competition will also lower prices for end users.
- Skilling of equipment operators and participation of women has finally begun. I learnt about Infrastructure Equipment Skill Council which is involved in training of equipment operators. Back in our town, we have been discussing the need for a similar institute for training high quality agricultural equipment operators. Skilling is a huge unaddressed need in both these sectors. At Tata Hitachi’s booth there were women operators showcasing their skill with the excavator by executing fine tasks as picking up a ring from a stand. Women participation in these roles is definitely useful.
- Focus on dealer network and quality of service among Indian brands remains substandard. Poor quality of build and substandard service support continues to be a problem with Indian brands. I have had limited engagement with non-Indian brands in this space. Indian brands continue to focus on sales and do not pay enough attention to service support. Heavy equipment market moves primarily on reliability of service. As an example, reliability and high quality of after-sales support makes JCB an outright leader in the compact backhoe-loader category. There are at least half a dozen manufactures in this category, but JCB dominates the category.
India is a country where being good enough just works for most people. Indian equipment can save the day for you. But it cannot make the most of your day. The equipment’s seals will break. Hoses will burst. Drive shafts will wear off before their rated life. Then there will be a long, painful machine downtime and several man days of losses to bear. There has to be an almost national level drive to develop a culture of detail-orientation and of excellence. The journey is long.
On the whole, as a visitor seeing the ensemble of Indian manufacturing at the expo, it is encouraging to see the huge upward trend in equipment use. Courtesy this profuse activity and availability of a wide range of equipment in the domestic market, India’s villages, towns and cities are experiencing a phenomenal transformation in terms of their built environments. One hopes that the gains are more proportionate and the wedge isn’t driven deeper.
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