INDIAN MINING & CONSTRUCTION EQUIPMENT INDUSTRY

BACKGROUND & HISTORICAL TRENDS

Construction and mining equipment cover a variety of machinery such as hydraulic excavators, wheel loaders, backhoe loaders, bull dozers, dump trucks, tippers, graders, pavers, asphalt drum / wet mix plants, breakers, vibratory compactors, cranes, fork lifts, dozers, off-highway dumpers (20T to 170T), drills, scrapers, motor graders, rope shovels etc. They perform a variety of functions like preparation of ground, excavation, haulage of material, dumping/laying in specified manner, material handling, road construction etc. These equipments are required for both construction and mining activity.

With a wide production capacity base, India is perhaps the only developing country,
which is totally self-reliant in such highly sophisticated equipment. India has only a few, mainly medium and large companies in the organized sector who manufacture these. The technology barriers are high, especially with respect to mining equipment and therefore the role of SME’s is restricted to manufacture of components and some sub-assemblies. Prior to the 1960s, domestic requirements of mining and construction equipment were entirely met by imports. Domestic production began in 1964 with the setting up of Bharat Earthmovers Ltd. (BEML), a public sector unit of the Ministry of Defence, at Kolar in South India to manufacture dozers, dumpers, graders, scrapers, etc. for defence requirements under licence from LeTorneau Westinghouse, USA and Komatsu, Japan. In the private sector, the Hindustan Motors’ Earthmoving Equipment Division, was established in 1969 at Tiruvallur, near Chennai with technical collaboration from Terex, UK for manufacture of wheel loaders, dozers & dumpers. This factory has since been taken over by Caterpillar for their Indian operations. The machines manufactured by Caterpillar in the Tiruvallur factory are marketed by TIL and GMMCO. In 1974, L&T started manufacturing hydraulic excavators under license from Poclain, France. In 1980 and 1981, two more units, Telcon and Escorts JCB commenced manufacture of hydraulic excavators (under license from Hitachi, Japan) and backhoe loaders (under license from JCB, UK) respectively. Escorts JCB has been taken over by JC Bamford Excavators Ltd. U.K. in 2003 and is now called JCB India Ltd. Volvo and Terex Vectra are the most recent entrants in the Indian market. Volvo has set up their manufacturing unit in Bangalore. At present they are only manufacturing tippers and the other equipment are imported from their parent company and marketed in India.
Terex Corporation USA and Vectra Ltd. U.K. have formed a joint venture, which has started manufacturing construction equipment like backhoe loaders and skid steer loaders from May ’04 at Greater Noida with an investment of USD 12 million. Other equipment in the Terex range are being sold through their agents in India. Most of the technology leaders like Case, Caterpillar, Hitachi, Ingersoll-Rand, JCB, John Deere, Joy Mining Machinery, Komatsu, Lieberr, Poclain, Terex, Volvo are present in India as joint venture companies, or have set up their own manufacturing facilities, or marketing companies. The industry has made substantial investments in the recent past for setting up manufacturing bases, despite small volumes and uneconomic scales of production compared to global standards.

Current Status in India
The growth of this sector is interlinked with the growth of the Indian economy and indirectly with the growth of infrastructure. The last few years have witnessed a phase of restructuring in the industry through acquisitions and joint ventures. This also reflects the active interest of international majors in the domestic market. Many international players have also appointed selling agents for importing and selling complete equipment in India. The construction and mining equipment industry is dominated by a few large manufacturers in each product segment. BEML supplies to nearly half the total market. BEML & Caterpillar lead in dumpers and dozers while L&T-Komatsu and Telcon lead in excavators and JCB India in backhoe loaders. The market share and total market size as per CMIE data of the product range covered by the study is given below: -

Major Products Companies Market Share (%)

Earthmoving Machinery

Bharat Earth Movers Limited 50.01
Telcon 15.48
L&T Komatsu 8.30
Larsen & Toubro 3.16
Tractor Engineers 1.24
Hyderabad Industries 0.22
Ingersoll-Rand (India) 0.21
T R F 0.11
Jessop & Co. 0.09
A C C Machinery Co. 0.06
Greaves Cotton
Voltas
Bemco Jacks & Allied Products
Viraj Technocom
Texmaco
Tata Motors
Southern Structurals
Marshall Sons & Co. (Mfg.)
Hindustan Motors
Garden Reach Shipbuilders &
Engineers
Escorts JCB

Total number of companies : 27
Total market size: Rs.3516.2 Cr.

Construction Machinery

Gujarat Apollo Equipments 39.07
Apollo Earthmovers 10.05
Apollo Industrial Products 7.53
Shethia Erectors & Material Handlers 6.58
Rico Auto Inds 6.19
International Combustion 5.08
TRF 5.03

Total number of companies : 49
Total market size: Rs.171.2 crores


Cranes

TIL 14.47
Greaves Cotton 9.31
Mukand 7.92
WMI Cranes 5.55
Hercules Hoists 5.37
Jessop & Co. 0.96
Hyderabad Industries 0.83
Millars India 0.14
Cranex 0.13
Brady & Morris Engg. Co. 0.04
Braithwaite & Co.
Voltas
Vikatmev Containers
Southern Structurals
Marshall Sons & Co. (Mfg.)
Marshall Sons & Co. (India)
Elecon Engineering Co.


Total number of companies : 31
Total market size: Rs.544.3 crores

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