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Crane manufacturing sector: bottlenecks within

Low level of demand and volume as compared to major markets outside India are the major challenges faced by the industrial crane sector today. Therefore, Indian manufactures face a cost disadvantage due to economies of scale as compared to foreign manufactures from China and other countries, explains Tushar Mehendale, MD, ElectroMech
 
India – a country with a population of more than 1 billion people, is the world’s second fastest emerging economy; even higher than Russia, Italy, and the UK. This gives huge impetus to the purchasing capability of the nation, making it an area of huge potential. It also offers companies a wide array of options and avenues to pursue. The huge population of India is generally taken in a negative notion, but on a positive aspect, it also provides with a huge customer base. Contrary to the old belief, the standard of living for this customer group has also raised and all this is the result of continuously rising GDP. This also brings a plethora of opportunities in the Indian industries, be it automobile, hospitality, IT or manufacturing industry.
 
The manufacturing industry in India has all the elements which augment the financial progress, increase the productivity and efficiency of the manufacturing industry as well as face competition in the competitive global markets. The manufacturing industry in India has shown the characteristics of possessing the potential of improving the country’s economic conditions. Researchers have attested that India’s manufacturing industry generate a production of approximately 20 per cent of that of the United States and about 50 per cent of the productivity of countries such as Taiwan and South Korea. Manufacturing is a huge contributor to the modern Indian economy. And one of the inclusions of the manufacturing industry is the material handling segment.
 
The Material Handling Equipment (MHE) industry has a wide array of products on offer to the industry depending on the needs of the particular industry. As the name suggests this sector deals with equipment that relate to the movement, storage, control and protection of materials, goods and products throughout the process of manufacturing, distribution, consumption and disposal. Material handling sector is a critical intermediary in the economy of a country today. MHE may not directly contribute in terms of value addition towards production of goods but it brings about efficiency in handling, transport and storage of goods. In fact the MHE industry practically complements the manufacturing industry by ensuring smooth and efficient distribution of goods. Thus it is a very important aspect and the role of MHE in any set-up cannot be overlooked. Broadly, MHE can be classified into equipment such as cranes, hoists, conveyors, scissor lifts, transfer trolleys, stacker reclaimers, bucket elevators, etc. Each different type of equipment in turn has a huge variety of different specifications and as such the whole universe of MHE is vast.
 
Cranes and hoists are an integral part of the manufacturing industry. Cranes drive the technique required for any kind of construction or manufacturing and are considered as tools for simplifying process in manufacturing, mining, infrastructure, automotive and construction industries. In today’s world of automation, when every step taken is in regard to reduce human effort, cranes and hoists have provided a solution to several industries when they are in need of not just lifting or lowering materials, but to enhance the efficiency of their operations.
 
Demand Drivers
Since cranes affect the working of many industries, the huge demand for cranes reflects the growth across all sectors. As a country undergoing rapid development, the construction and infrastructure sectors are witnessing an increase in activity, hence requirements for cranes from these sectors is strong. Primarily, there is a direct requirement for equipment at various project sites such as gantry cranes for precast segment yards and bridge constructions, specialised hoisting equipment for bridge launching girders etc. Typically, the capacities for such cranes can range from 10 MT to 200 MT. Several other industries, such as steel and cement are growing as well, as they are complementary to growing infrastructure needs and require a variety of cranes and hoists for their material handling needs.
 
The power sector is also expanding in India, with the government promoting expenditure on several new projects; hence there is demand for a large range of cranes from this sector. The power sector requires cranes for a variety of applications and their requirements could be up to 250 MT, as in the case of windmill manufacturers, Transformer manufacturers, TG Hall cranes, coal mill handling cranes, etc.
 
India has emerged as a well recognised manufacturing hub for several heavy engineering companies, both domestic and multinational and several high capacity cranes are required by them. Core manufacturing companies have the maximum demand for cranes due to the nature of their work. Automobile and ancillaries, power, infrastructure construction, shipyards, capital goods manufacturers, general engineering and fabrication industries in particular have a large demand for the company’s products. Automotive manufacturers and their allied suppliers require light duty crane systems ranging from a few hundred kgs for assembly lines, to 50 MT and more cranes for stamping operations.
 
Another trend we see is the increase in demand for world class cranes or cranes from international crane manufacturers over traditional designs. This is primarily attributable to the large number of multinational companies establishing their presence in India as well as Indian companies who have international technology partners.
 
Potential for Growth
Focus on R&D and innovation: Manufacturers should provide customized solutions by providing additional accessories and specifications geared towards maximizing the customers’ productivity. Innovation is possible by understanding the customer profile and R&D would be necessary for customisation; customer training and education should be done in parallel with product technology development.
 
Forming industry associations: Manufacturers should strengthen industry associations. A good industry association provides a platform for technological discussions and will lead to consolidation of information.
 
Challenges
The major challenges faced by the industrial crane sector today relate to the low level of demand and volume as compared to major markets outside India. Due to this, Indian manufacturers face a cost disadvantage due to economies of scale as compared to foreign manufactures from China and other countries. Further, the availability of components from ancillaries and other suppliers is at a much lower level in the Indian market as compared to other countries. India also has a lot of administrative and infrastructural bottlenecks related to power cost, delays in transportation, delays in import and export clearances, administrative problems, high taxation limits, high interest rates, etc. Some impetus from the Government in the above listed areas will certainly benefit the segment. Other crane manufacturers can take responsibility to ensure safety, quality & technical innovation in their solutions offered.
 
Secondly, the challenges being faced by the industry are more in line with the general challenges faced by all Indian manufacturing companies – lack of infrastructure and availability of good qualified engineers. Unfortunately for the mechanical engineering industry in general, many good engineers have been absorbed by the IT industry in the past 10 – 12 years and as a result there is a severe dearth of good experienced engineers available for working in the core industry.
 
Thirdly, adherence to safety norms while manufacturing products is a challenge that the Indian market hasn’t been able to live upto. Absence of a regulatory body for standard safety norms is a concern.  Strict discipline is required in designing and manufacturing of hoisting equipment to ensure that there isn’t even a remote possibility of accidents happening. The ability to safely and securely lift load against gravity without any casualties poses a challenge.
 
Road Ahead
Improvement of infrastructure is the primary focus of the Indian Government. According to the eleventh five-year plan (2007-2012), infrastructure investment in India in some key sectors are (at current prices): Modernization of highways – US$ 75 billion, Development of civil aviation – US$ 12 billion, Development of Irrigation system – US$ 18 billion, Development of Ports – US$ 26 billion, Development of Railways – US$ 71 billion, Development of Power – US$ 232 billion. Due to rapid development of the industries in India, the construction and infrastructure sectors are witnessing an increase in activity. Considering the eleventh five year plan, investment in the above sectors (aviation infrastructure, construction infrastructure, highway infrastructure, power infrastructure, port infrastructure) will be around US$ 352 billion (Rs. 15,72,736 crore approximately) thus providing with huge infrastructure market potential in India.
 
All the above sectors will require cranes and hoists at one or the other step of development. Hence, indirectly, the Eleventh five-year plan by Indian Planning Commission has directed the growth of crane manufacturing industry.
 
Government’s inclination towards the construction, power, energy and other infrastructure sectors can lift up the position of the crane manufacturing industry.
 
Author:
Tushar Mehendale. MD, ElectroMech
Tushar Mehendale is a Mechanical Engineer by profession and has to his credit an MS degree in manufacturing systems from USA. He is the Managing Director of Pune headquartered ElectroMech, which is today India’s largest manufacturer of industrial cranes by volume.

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