Roads and highways are critical components for the automobile industry’s growth story and this is where construction equipment, JCB India, has a big role to play.

“Pace of road construction is projected to reach 30 kilometres a day in the coming months,” said Vipin Sondhi, Managing Director and CEO, in a recent interview. The Budget has also earmarked ₹97,000 crore for roads, of which a fifth has been allocated to rural India.

The National Highways Authority of India has ambitious plans of building 40 km of national highways per day in the coming years and this will need sophisticated road construction equipment.

Winds of change

The turnaround is happening after two successive years of fierce headwinds which literally saw infrastructure development come to a standstill. JCB India was also hut by the downturn but used this time to consolidate operations.

“During the slowdown, we built factories and stepped up exports from eight countries in 2011 to 65 in 2016. The number of retail outlets also grew from 430 to 650 during this period,” says Sondhi. Today, things are in much better shape with economic growth picking up. “We at JCB are seeing growth across all product categories, which is a healthy sign,” he adds.

The earthmoving and construction equipment industry, which touched a peak of 52,893 units in 2011, fell by six, 17 and 19 per cent respectively over the next three years with positive growth finally happening in 2015 which closed at 36,798 units.

The present pace of growth suggests that it will take a year or so for the industry to get back to the levels of 2011 with good growth expected in roads, irrigation and railways. “We also see other sectors such as urban rejuvenation and power driving momentum in the coming months. Another major growth engine for the construction industry is ports, which has been one of the focus areas of the Centre,” says Sondhi. In addition, good rains are expected to accelerate the growth story and boost prosperity in rural India which, in turn, will translate into demand for construction machinery.

Capacity utilisation across JCB’s plants fell to nearly 50 per cent over the last four years. “We are now seeing an upward growth and the thrust on infrastructure can bring things back on track,” he adds. JCB India started as a joint venture in 1979 and is now a fully owned subsidiary of JC Bamford Excavators of the UK. Its five plants make a wide range of equipment both for India and overseas. The Middle East and Africa are its biggest export markets, followed by Southeast Asia and Latin America. Sondhi believes that as markets mature, there will be an increased focus on material handling and warehousing applications.

Positive outlook

This explains why the company launched telehandlers and skid steers last year with larger and heavier category equipment to follow in the coming months. It also launched LiveLink, an advanced telematics system, which helps customers manage and monitor their machines. “Our factory in Delhi-NCR can make 110 machines on a single shift while Pune caters to larger equipment such as excavators, wheeled loaders and compactors,” says Sondhi.

The company makes 48 different models in eight product categories. The Delhi-NCR facility is the world’s largest backhoe loader plant and also makes skid steers, telehandlers and diesel engines/generators. The Jaipur plant manufactures fabrications for the Group. Pune is also home to the largest JCB design centre outside the UK with over 300 engineers to design products for the world.

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