Construction Equipment

Looking For Niche Markets To Improve

V.G. Sakthikumar, Managing Director, Schwing Stetter India Private Limited, Member of governing council, ICEMA, Chairman of Mechanisation committee, Builders Association of India.

As the unexpected calamity of COVID has hit all the politics and markets of the world, we would like to know your expert views on the current market status and the way you are planning to combat the current pandemic scenario? 

March turnover was not as per the plan due to sudden lockdown of factories, construction activities in India. April was completely a standstill and the extended lockdown is likely to hit the May turnover also. The economic hardship has affected right from the daily wage workers to corporate companies, small businesses, MSME’s and practically every commercial establishment. As the construction equipment (CE) sector is affected since 2019 dues to issues like reduced demand, NBFC problem, automotive slowdown (BS4 – BS6 issues), etc., this sudden lockdown has further added to our woes.

There are no immediate challenges in the production in our planned inventory to take care of the requirements of new products and spare parts. Most of the big sites are in the red zones, we expect the site activities to be limited and therefore reduced requirement. We do not expect immediate demand to put pressure on our inventory. However, our focus is to eliminate the risk of sourcing from countries that are severely affected and also to find for alternative local suppliers.

It is said that the present economic condition is of a ‘V’ shape where the economic slope goes down immediately due to unavoidable situation and emerges as soon as the problem vanishes because the workforce returns to the job and the situation comes back to normal in just a few months. How far do you think that this concept will prove to be fair and workable for the Indian infrastructure and construction market and to your business ambitions?

We hope for a V shaped recovery. The Indian domestic demand is very high and is temporarily affected by the pandemic. Most of the sites and customers are waiting to restart the projects and therefore a V shaped recovery is anticipated. However, if there are spikes in the COVID-19 infection, then there could be lockdown in specific areas which can throw some surprises. In that case, the recovery could be U shaped instead of V shaped. So we can only respond to the emerging situation as nobody can surely tell when the business can be controlled.

Is there is any new plan or strategy which you are planning for remaining competitive in the coming months and how do you forecast your business dealings after the market emerges to again run on the track of moving on and gaining some momentum? 

The immediate concern is to take care of the people in the organization and the customers. We will be doing everything to reduce the cost and postpone certain capital expenditures. We will be looking for niche markets to improve and compensate the sales drop in domestic and export markets.

What are your current or forthcoming projects which you are working on and how are you managing the execution of them in a positive and practical manner? 

Schwing Stetter India’s new factory project at Sipcot industrial area, Cheyyar, Tiruvannamalai, Tamil Nadu, India is ongoing and we will continue to complete the project and inaugurate it fast as we believe in the long term potential of the construction equipment industry in India. The new unit is spread over 53 acres is a step towards strengthening Schwing Stetter’s commitment to the Indian market and focus on to meet the emerging infrastructure boom in India and export potential in Asia and African markets. Schwing Stetter is investing in two phases towards installing this technology-enabled and environmentally-sustainable manufacturing facility. The new site aims to focus on new product launches and support the progression of engineered products from the prototype stage to serial production.

What expectations you have from the government’s plans and reforms to uplift and improve the overall condition of the Indian infrastructure and construction market?

We expect more package from the Government while making the announcement of earlier packages the Government was not anticipating the lockdown to be lasting so long, considering further revenue loss and anticipated reduced demand for upcoming months. We expect support from the Government in the following ways:

  • Financial package to support workforce salary, payments and for contract workforce.
  • Extended moratorium for MSME and rental companies.
  • Opening up of more infrastructure sites so that more people are employed and money can be made available in their hands.
  • Interest subsidy for capital expenditure (CAPEX) projects that are under progress.
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