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|Infra push may spur demand for construction equipment: Tata Hitachi's Sandeep Singh|
| Chanchal Pal Chauhan |
Monday, April 17, 2017 | 17:44 IST
Infra push may spur demand for construction equipment: Tata Hitachi's Sandeep Singh
As infrastructure gets the biggest push from the government in a bid to boost the country's economy, Sandeep Singh, Managing Director at Tata Hitachi Construction Machinery Company, a joint venture between Japanese construction equipment (CE) leader Hitachi and India's Tata Motors, discusses the growth potential of the CE industry in the Indian context. Edited excerpts:
Has the government's push to infrastructure catapulted demand for the CE industry?
As for Tata Hitachi, the company focuses on the demand drivers in the market - infrastructure and mining. In the infrastructure segment, there has been a spurt in roads and railways construction leading to a rise in demand for excavators. We are also seeing a significant demand from major and minor irrigation projects from some of the South Indian states. Projects such as the redesigned Pranahita Chevella irrigation scheme, Mission Kakatiya and Mission Bhagiratha are all contributing to this demand.
The outlook for mining industry is positive in the long term. But currently, there is degrowth in the sector although the government has announced several projects.
What about demonetisation setback? Has the demand revived?
What are the sectors propelling the demand? Are they traditional ones like ports, roads, railways, irrigation, construction, realty or urban infra? Or do you see new areas coming up?
The Railways has planned to set up the Mumbai-Ahmedabad high-speed rail corridor, with assistance from Japan International Cooperation Agency (JICA), at a cost of Rs 98,000 crore. Then there is the Ken-Betwa river-linking project - it is part of the intra-country plan of linking rivers to do away with floods and drought. The Polavaram irrigation project in Andhra Pradesh is also an example of large irrigation project of national importance.
Will you invest here given the anticipated gush of investments in infra from the central and state governments?
Also, in some parts of the country, there is severe labour shortage and this has more than doubled the demand for mini HEX in the past four years. The stress on Swachh Bharat (Clean India) is also leading to more organised and mechanised means of solid waste management besides ensuring that urban sewage systems are kept clean by urban local bodies. They are doing it with a whole range of excavators and backhoe loaders.
The government has also given thrust to utilising indigenously available coal resources for energy generation by setting a target of one billion tonne of coal production by Coal India by 2020. It has also introduced a more transparent mechanism to allot coal blocks to the private sector for energy and non-energy purposes. This has led to a considerable rise in demand for large-class mining equipment such as excavators and wheel loaders. At Tata Hitachi, our objective is to keep pace with market growth and consolidate our market leadership.
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