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Construction equipment sector will take a positive turn in June 2020 quarter, says JCB India chief

G Balachandar Chennai | Updated on December 11, 2019 Published on December 12, 2019

Subir Chowdhury, MD and CEO, JCB India   -  Supplied Pic

JCB India is a leading construction equipment player in the country with five factories and a strong distribution network. The company is also a leading exporter of made-in-India equipment to numerous countries. Though the construction equipment industry is witnessing subdued demand now, the company says the current slowdown is transient. Subir Kumar Chowdhury, who recently took over as MD and CEO of JCB India, spoke to BusinessLine in Bengaluru, on the eve of EXCON 2019, about the market and its plans. Excerpts:

When do you expect the construction equipment (CE) market to see a recovery?

We see green shoots. During our interactions with a lot of contractors, who are big guys, what we heard was the start of the payment cycle. That is good news. We certainly see in April-June 2020 quarter a positive turnaround in the CE market. On the infrastructure side, most of the governments are focussing on irrigation and affordable housing projects. Actually, affordable housing is an unsung story today. It will see huge growth in the next two years like what we see in terms of gas and electricity connections to households. The government is also now moving up in road sector projects. Overall, payment cycle, new investment opportunities and a boost to road projects give us a tremendous amount of optimism.

Lack of financing has been seen as a constraint. Has it improved now?

This 2019 slowdown is also connected to the sentiments of IL&FS crisis. Today, the story is banks are having adequate funds unlike two years ago when they were under severe stress. Also, NBFCs are reinventing themselves. The most critical is that their due diligence and evaluation process is better. The other good part is banks are now directly coming into lending. All these put together, it will be a positive story and structurally different lending landscape as compared to the past.

What have been the technological disruptions in your construction equipment?

Definitely, our machines are getting more digital. We branded it as a Livelink, an advanced telematics offering that links up with customers 24/7 for asset management. It is aimed at increasing productivity, controlling cost and asset safety. We have digitally connected our 300,000 machines working across the country. In this customers get three elements – security, operations and service (SOS). Under security, our machines are geo-fenced and it could be located where it is. In the past few years, using this police have recovered more than 40 stolen equipment of our customers. In operation, customers would know about the machine’s fuel level, battery conditions, etc – almost entire parameters of the machine on their mobile. We were the first one to do this.

Now, our backhoe loaders come with smart technologies such as ‘IntelliPerformance.’ Actually, our machines in the UK or in western countries run for 1000-1200 hrs a year where as our India-built machines run for 3500-4000 hrs a year. We design our machines keeping in mind the Indian conditions. We are also very proud that our India-built machines are sold in about 110 countries.

JCB has been a leader in backhoes. What about your presence in other product categories?

Yes, we have a significant share in backhoes and in November our share crossed 80 per cent. We are the leader in wheel loaders and a couple of other equipment sectors too. The shift the brand has made in the last 4 years is that we have consciously shifted our stance from backhoe to a full range infrastructure equipment player. It means that we will have to offer excavators, road equipment and material handling machines.

Today, we offer excavators in the range of 3-38 tonnes when compared with 3-22 tonnes two years ago. During January-November 2019 period, in excavators, we achieved No. 2 position, up from No. 3 in 2018 and No. 5 in 2017. We have grown our position in the declining excavator market. JCB’s NXT range of excavators will offer an increased efficiency of up to 32 per cent. Our objective is to achieve 25 per cent market share in excavators by 2021.

This correspondent was in Bengaluru at the invitation of JCB India

Published on December 12, 2019
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