India rising

By Partha Pratim Basistha06 December 2016

Oil & Steel truck mount on Tata chassis working on repair of power transmission tower.

Oil & Steel truck mount on Tata chassis working on repair of power transmission tower.

Demand for new access platforms is growing from rental companies and end users in India. Partha Pratim Basistha explores the evolving market.

The Indian aerial work platform market has been dominated by second hand equipment, mainly because the Indian AWP rental market, which also involves crane rental companies and OEM distributors, has traditionally imported used equipment. However, the trend seems to be gradually reversing, as rental companies have been showing a preference for new units since the first quarter of 2016.

There is also a trend by rental companies towards more articulated and telescopic booms, as they can be used across multipurpose applications, enabling them to fetch higher rental rates. Out of the 2016 market size of 260 machines, a bulk of those purchased were self propelled boom lifts.

A change in demand is behind the new purchasing trends. Major Indian contractors like Larsen & Toubro and Afcons are looking for boom lifts ranging from 60ft, 80ft, 125ft and 150 ft working height, not older than three to four years and supported by trained operators and adequate service back up.

Newer equipment is also preferred by major engineering and process-based manufacturing companies as they find it delivers higher productivity, reliability and safety, especially in plant maintenance at great heights.

Rental companies are placing new equipment on long term rental in a big way in the South Indian state of Tamil Nadu, India’s car manufacturing hub. Similarly, rental agencies have increasingly been deploying new machineries on long term rental agreements with major steel producers in Eastern India.

Tamil Nadu-based AWP rental major Swastik Corporation brought up to 12 new units last year, consisting four JLG and six Genie 45ft boom lifts. It entered into a five-year rental agreement with Hyundai last quarter. The agreement involves maintenance of the Korean car manufacturer’s plant at Sriperumbudur in Tamil Nadu with 45ft working height JLG E450AJ booms. Swastik owns 95 JLG machines, comprising mast lifts, 45ft to 86ft booms, 19ft to 40ft scissor lifts and it is the official rental partner of JLG in India.

United Air Express, based in Jamshedpur, Eastern India, also entered into a long term rental agreement early in 2016 with Tata Steel. The rental company has deployed a range of its JLG’s for maintenance of Tata’s flagship steel plant at Jamshedpur in Jharkhand state. They include diesel scissors, along with a 45ft, two 60ft and a pair of 80ft booms, plus 125 ft and 150SJ diesel booms. Tata also hired 450AJ and 600AJ booms for long term maintenance of its new steel plant at Kalinganagar in the eastern state of Odisha. They came from Mumbai-based AWP rental company ABC Infra. The main stipulation was the equipment should not be more than four years old.

“Rental agencies are finding it commercially remunerative to acquire new equipment and put them on long term rental, mainly with manufacturing companies. This ensures long term revenue,” said Mr T Mohanraj, business head of TV, Sundaram Iyengar & Sons, dealers of JLG and Palfinger knuckle boom cranes for the South and East India market.

“This is in contrast to construction projects, where contracts are usually for a very short period. Long term agreement with the rental companies, with newer equipment, is also beneficial for the manufacturing companies, as they are ensured ready availability of the equipment at a fixed rate. The advantage gained by both has consequently driven sales for newer equipment,” adds Mr Mohanraj.

Seeing the advantages of long term agreements, glass manufacturer Saint Gobain and tyre producer Michelin and BMW are looking for similar arrangements for their Chennai plants.

Rakesh Kumar, country manager, India, Terex Genie, says, “By entering into long term rental agreements with the end users, rental companies are ensured guaranteed usage of the machine across the maintenance cycle of the plant, in contrast to construction project sites. This means the machine undergoes less maintenance, consequently giving the equipment a longer life and therefore gaining better rental rates in the highly competitive Indian AWP market, dominated by second hand equipment.”

He adds, “Based on this trend, we are looking to spread awareness of the advantages of new equipment to the end users through our own channels and through our dealers. We are also increasingly looking to acquaint our dealers with the product. Further leveraging our service, we are regularly providing training support to service personnel at our three dealers, Reach International, Sendhamarai Engineering and Maco.”

The Indian AWP market will continue to remain competitive due to the high penetration of used equipment. Competition is expected to become greater as some big crane rental companies acquire used AWPs in 2017.

“We will be importing at least 10 boom lifts between 60ft and 150ft for refinery and other industrial maintenance jobs by the end of 2016.” Says Dharak Dedhia, director Aria, Aerial Platforms India. Big capacity crane rental company Express Equipment Rental & Logistics, in Gujarat, Western India, also plans to acquire a similar number of second hand boom lifts between 20m and 40m in 2017.The equipment is expected to be deployed for refinery maintenance jobs in Gujarat.

“To stand out from the competition, we are aggressively looking to promote the equipment, mainly among end users across varied sectors and also to rental companies.” Says Saumya Ray, director, Haulotte India. Haulotte India has recently delivered a 41m HA 41 RTJ Pro articulated boom to Indian state managed shipyard Mazagaon Docks. It has also supplied five new 16m 16 RTJ boom lifts to Punjab State Transmission Co. very recently.

He says, “Until now, we have delivered close to 149 boom lifts between 16m-26m, comprising HA 16 RTJ and HA 260 PX to state power distribution utility, Power Grid Corporation of India. We possess 39% in the power grid business.”

He continues, “To build our brand in India, we have launched a second life programme in association with our dealer and resellers Gemini Power Hydraulics. This will involve completely revamping the older machines, making them operational. We have also launched an e-service plan.”

While competition is likely to increase, the market size is also likely to grow due to the strong demand. This is mainly on account of growing and projected high demand from greenfield expansion of India’s infrastructure logistics sector, led by a recent boom in India’s e-commerce industry led by rising popularity of online shopping in the country.

According to a recent joint study of India’s Associated Chambers of Commerce and Industry (ASSOCHAM) and Pricewaterhouse Coopers, India’s e-commerce market is expected to be around $80 billion by 2020. To streamline the stocking of products and timely deliveries, online companies are expected to invest close to $6-$8 billion in logistics, infrastructure and warehousing by 2025.

Presently, there is a very low level of air cargo penetration, with only a few airports equipped to handle large volumes of express delivery parcels in India. As e-commerce gathers momentum and moves to the tier-II and tier-III cities, there will be increasing demand for air cargo to smaller towns in India, making the companies invest in new infrastructure.

India’s overall e-commerce industry, valued at $25 billion has been growing at 35% - 40% each year. According to the study, it is expected to cross the $100 billion mark in five years.

Vishal Sharma, business head of Reach International agrees. “Our entire fleet of 150 is fully engaged. A sizeable portion of the fleet is working at warehouse projects being set up by online companies like Myantra, Flipkart and Amazon. Demand is expected to go up as many more warehouses are being planned.”

He adds, “Large numbers of food parks are coming up in Punjab, North India, and ongoing major brown field warehouse capacity expansion by MRF tyres, Maruti Suzuki will also drive demand.”

Buoyed by the growing demand, Reach International has recently acquired fifteen boom lifts between 80ft articulated and 125ft telescopic boom lifts, worth $8 million. The company has placed fresh orders with Genie for eight 125ft booms and two 14m scissor lifts. Delivery equipment will start in December.

Fresh demand of AWPs for construction and maintenance is also likely to come from India’s airport projects. As many as 21 airports, at a cost of INR333 billion, are in initial stages.

Two 23m, JLG, battery operated crawler, and two 45ft Genie boom lifts have been very recently acquired by the newly-constructed international airport of Kolkata in the state of West Bengal in Eastern India. Faster project completion and tight maintenance schedules have led to a spurt in demand for truck mounted AWPs in India.

According to industry estimates, close to 1000 units are working in India. The equipment is being used in street light maintenance, wind turbine maintenance and the inspection, maintenance of bridges and other structures, as well as cables, painting work, facade cleaning and tree cutting. The demand potential is estimated to be more than two hundreds.

Manufacturing plans

Gemini, distributor for Haulotte, entered into an exclusive distribution tie-up with CTE Italy and France Elevateur in 2015 for marketing their truck mounts in India. Under the agreement, it is distributing CTE’s 15m-62m machines and France Elevateur’s lower heights of 9m-15m with basket capacities between 200kg - 600kg. The platforms are mounted by Gemini on Indian truck chassis with gross vehicle weights of 3.5 tonnes to 32 tonnes.

According to Rajiv Sethi, director, Gemini, “With rental rates under pressure in India, it is vital that the owners of AWPs have sizeable job volumes. With the ability to cover long distance in a very short time and easy mobilisation, they find the equipment suitable. Seeing the positive response of the equipment, we will manufacture these machines in India with the technical support of our principals in near future.”

Gemini has recently delivered CTE ZED-29 and ZED-26 articulated booms, with the 26m unit supplied to a Mumbai-based rental company and mounted on a 9 tonne GVW Indian Tata lpt-909 chassis, while the 29m unit is on an 11 tonne GVW Tata 1109 chassis.

TVS is distributing Palfinger truck mounts with working heights of 13m, 16m, 20m and 24m. The units are mounted on Indian-origin Ashok Leyland Dost, Mahindra, Eicher and Tata chassis. There is also an option of an Isuzu chassis. The mounting is carried out by Palfinger at its Chennai facility.

Close to 20-plus Palfinger units are working in India. This includes the L&T Hyderabad Metro project in South India, power projects and highway department surveillance camera mounting and maintenance. The department is also using them for tree cutting and utilites.

Mumbai-based construction equipment rental company Prasad Services has rented out its four 20m and 25m Tata 407 chassis mounted imported Oil and Steel trucks to the L&T Metro project in Hyderabad.

In conclusion, there is an emerging trend of buying new equipment from rental companies and end users. To sustain this trend, appropriate safety legislation will have to be introduced.

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