The Hindu Business Line : Potential for higher growth seen

Bangalore, Nov 14 The earth moving and construction equipment (ECE) industry has the potential to expand five-fold from the revenues of $2.3 billion last year to $12-13 billion by 2015, which is equivalent to China’s current level of $13-14 billion, with a significant export contribution.

Three initiatives

However, the industry needs to launch three transformation initiatives that would help the industry on a sustainable growth path. The potential could be realised through a concerted effort by the industry players and the government to introduce India-specific products; improve cost competitiveness to face impending competition from imports from low-cost countries like China; and push exports in areas where India has an edge, said a report prepared by McKinsey for the Confederation of Indian Industry.

Report released

The Report ECE Vision 2015: Scaling New Heights in Indian Earth Moving and Construction Equipment Industry was released at the inaugural function of the five-day Excon 2007 here on Wednesday.

Addressing media persons, Mr Rajat Dhawan, partner, McKinsey & Company, said the industry could realise its potential by 2015 buoyed by significant infrastructure investment expected. This will boost the industry to $8 billion and an additional growth of $4-5 billion could be achieved by pursuing demand accelerators in the domestic and export market.

He said exports itself could touch $3 billion with 50 per cent of it supported largely by components supply while equipment and services will add up the rest. The McKinsey report said various estimates indicate an investment of a $1 trillion over the next eight years in infrastructure.

“Even after discounting for delays and discontinued projects, the potential investment could approximately be $750 billion between 2007 and 2015, going by the historical trends and assessment of industry experts”.

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