MHE industry: future growth and current challenges
The Indian market is thriving. With the flowing investments, crane manufacturers are smelling a huge prospect. The only thing they need to do right now is face the challenges, squarelyAVR MurthyCEOElectromech
Logically, India has always been a preferred market for multinational companies as they closely see the potential in the Indian market in growth and demand for their products. Heavy investments are being made in this sector as numerous multinationals are setting up their manufacturing units in India because of low-cost labors and excess availability of raw materials like steel and iron.
The Indian material handling equipment (MHE) industry will show a stable growth in the coming years, mainly driven by investment in manufacturing sector taken up by various companies and because of the consistent rise in demand across construction, automobile, power, railways and so on.The foremost contributors without doubt will be infrastructure and construction sectors for the rise in demand for material equipment industry, especially the crane industry in India. The $1 trillion investment announced by the Indian Government on infrastructure and infrastructure projects under the 12th Five-Year Plan has given a much needed boost to the material handling and crane manufacturing industry in revenue and growth. Additionally, the government has shown keen interest in encouraging the private sector to invest in infrastructure projects which will definitely help raise revenue for investments.
With expected surge in infrastructure projects in the coming years, there is bound to be a rise in demand from different industry verticals such as power, real estate, steel, cement, etc. along with allied industries. For example: infrastructure sector will heavily depend on gantry cranes for precast segment yards and bridge constructions. In steel industry, cranes are used for applications like hot-metal handling, ingot and billet handling, coil yards, cut-to-length lines, steel-stock yards, forge shops and foundries. In automobile industry, cranes are used for lifting and material handling purposes at machine shops and assembly lines. Railways, coach-building factory requires handling of various massive parts at multiple locations. Hoists and cranes are highly reliable in load handling and integrated material flow as per the requirements in these huge plants. Steel yard, raw material stores, forge shops, assembly lines, machine shops, etc. require different cranes for a variety of applications.Shipbuilding sector also requires cranes for handling different loads in various processes like construction of enormous liners, ships as well as small vessels. Steel stock yards, assembly stations and dry docks all require cranes. Real estate and power sectors have also witnessed a surge in demand for cranes. With the government supporting various power sector projects, there has been a considerable rise in interest in specialised cranes to meet their demand of diverse material handling needs. Heavy cranes upto the capacity of 250 tonnes are being widely used by windmill manufacturers and transformer manufacturers.
In case of the real estate sector, the market has seen an explosion in high-rise projects in metros and mini metros. Developers are finding using tower cranes more feasible instead of scaffolding. The rise in demand of these cranes is expected to be anywhere between 15-20 per cent annually. Larger tower cranes will also be in demand from power projects, cement plants etc.
Recent trends and Indian clientsThe Indian client base is ever evolving, making the Indian crane and material handling industry more and more client oriented. As investments flowing, the Indian customers have an advantage to choose from an array of premium quality equipments. Even with pricing as a naturally pivotal factor, customers look at the bigger picture keeping in mind the complete technical specification to ensure that the end product covers all the functional characteristics as well as other aspects such as reliability, safety, ease of maintenance etc. In today’s infrastructure projects timeliness as well as delivery and commissioning schedules are favoured by the Indian customer.
Some other credible trends in this sector include numerous international tie-ups that took place in the last decade. Because of this the industry is experiencing a substantial upgrade in quality of products and use of superior technology. This industry is experiencing a cut-throat competition. The approach of the buyer as well as manufacturers has also changed toward customer service. Customers today expect first-class, well-timed service as a norm. Manufacturers have to ensure establishing enabling structures to make sure of minimum customer complaints.
ChallengesEven as we witness a positive growth in the industry, most PSU tender and consultants have not adapted to the developments in the crane industry. Tenders won purely on price as a base stay in the game.
Even with the positive growth witnessed by the industry, most PSU tenders and several consultants have not adapted to the rapid developments in the crane industry. Tenders won purely on price still stay in the game. Manufacturers consequently can only provide the minimum technical specifications cited in the tender. Any extra feature, no matter how advantageous, doesn’t allow the bidder to demand a price premium as all bidders are assessed on an equal level, according to the tender specifications. Since the new technology may not fit into the inflexible (and often redundant) specifications of the tender, it might become a technical disqualification of the bidder, thus proving disadvantageous to the very people floating the tenders. PSUs or consultants even without a price increase are denied of world-class products because their technical specifications haven’t advanced on lines of the available technology in the industry.
Examples of these are direct drive motors for long travel of the crane, which drive each wheel separately instead of the traditional central drive motor with drive shafts connecting to the wheels. This arrangement helps get rid of long shafts as well as couplings, in the long run which can raise to misalignment in the system as well as natural inefficiencies in transmitting power. For example: recent drive assemblies delivered by ABUS have pole changing motors, present an instant advantage of twin speeds without the need of an external variable frequency drive (VFD). Again, most tenders are not acquainted with this technology and insist on VFD as the only means to provide dual speeds. Lubrication points on cranes is another outdated requisite that still finds its way into tenders, in spite of most gearboxes being sealed and not needing lubrication for the cranes lifetime.
Explosion protected cranes used in hazardous areas with inflammable gases or materials such as in the oil and gas, and chemical industries are an additional product segment where the quality of tenders proves to be a failure for established players. The biggest drawback in several established PSUs’ own consultant tenders is the requirement for shrouded bus bars as the source of power for “explosion protected” cranes. This poses danger as bus bars themselves are a source of sparking. In the international market, only festooned cables are used for power supply to cranes.
Another practice is the over specifying requirements which acts as a detrimental for international manufacturer to offer a superlative product at a competitive price. As explosion protected cranes are used for maintenance of equipment, they lie in Class M4/1Am duty. Nevertheless, most Indian tenders ask for minimum 2m class of duty for the same application.
Even when the thriving Indian market provides a profusion of prospects to crane manufacturers, the challenges in this sector should be resolved soon. Challenges faced by manufacturers create problems in making users understand the function and handling of the machinery.
Availability of skilled manpower is yet another challenge which needs to be addressed astutely to allow optimum use of the equipment. To overcome the challenge with regards to skilled manpower in the industry, an academic course on crane industry will be a step in the right direction. A diploma course for crane operators in crane operations and safety is one way to plug the shortage. The possibility of a tie-up with overseas institutions should be explored.
India has massive technical talent, reputable component vendor base and low labor rates. These factors act as added advantage toward becoming an export hub for the Middle East and South-East Asian markets. India could easily become a future R&D hub for global majors owing to the low amount of costs in terms of R&D manpower.
MHE industry: future growth and current challenges