With NDA, led by PM Narendra Modi, starting their second term at the Center, infrastructure development is expected to gain momentum again. Action Construction Equipment Ltd (ACE Ltd), with its wide range of construction equipment, is all geared up to help the government to take the infrastructure development to next level. Pradeep Sharma, President, ACE Ltd, believes that the Indian construction equipment sector is undergoing sweeping changes. A veteran with almost four decades of experience in engineering and construction equipment industry, Sharma has steered the company towards becoming number one in its major product segment – cranes. In this interview with Rakesh Rao, he tracks changes in construction equipment industry and discusses growth plans of ACE.

 

Brief us about your company and products offered by it to construction and mining sector? 

With eight state-of-the-art fully-equipped manufacturing facilities located in Faridabad (Haryana), ACE has a manufacturing capacity of 12,000 construction equipment and 9,000 tractors annually. Our diverse product portfolio is divided into four categories, namely 

agri-equipment, construction equipment, road construction and earthmoving equipment serving an impressive portfolio of over 15,000 customers globally.In the construction, earth-moving & mining sector, we offer mobile cranes, tower cranes, truck-mounted cranes, crawler crane, backhoe loaders in both 2WD & 4WD configurations, mobile tower cranes, concrete placing boom, vibratory rollers, motor graders and piling rigs. Our pick and carry cranes are available in the capacity of 9T-30T and truck-mounted cranes between the 25T-60T capacity.

Through a diverse portfolio of more than 60 products, we cater various industries like power, steel, cement, construction, real estate, mining, infrastructure, refinery, infrastructure construction, power projects, ports & shipyards, dams, metro rail, roads, engineering industry, railways, petroleum, defence, chemicals & fertiliser plants, warehousing, logistics, building construction, to name a few. 

 

With respect to rental business, are you seeing a rise in demand? 

Rental industry is the backbone of our trade. We promote and support individual hirers and rental companies by first procuring a work order from the main contractor for the rental industry and further provide our solution which fits their requirement. We are promoting small hirers who want to become machine owners by supporting them in getting the work order and further assist them in getting the equipment financed.

 

Are you planning to launch any new products? If yes, please elaborate 

ACE has recently launched NX-series multi-activity cranes which include NX360°-slew cum pick and carry (20T) crane, NXT-15T pick and carry crane combined with a telehandler and NXP- pick and carry crane cum aerial work platforms (AWP). We have received very good response in terms of orders from domestic market and also exported three NX360° cranes recently. Further, we have also launched 45T & 55T truck crane on dedicated chassis concept for the market. In the coming future, we intend to take our truck crane offering up to 130T, enabling us in meeting more than 80 per cent of the market demand.

 

In fact, NX-series cranes are a unique proposition from ACE and we are rightly referred as the global pioneers in the concept.

In a strategic move to further expand and strengthen its product portfolio, ACE has recently entered into a sales & service partnership with Sunward (a leading manufacturer of underground and foundation equipment globally) for their rotary rigs product range. In the future, we intend to strengthen our partnership for other range of products also. In crawler cranes segment, currently, we offer cranes in 40T and the 75T capacity and intend to take it upto 160T in the near future. 

 

How has been the performance of your exports business? 

Currently ACE exports its products to around 20 countries across the globe, majorly catering to Asia Pacific, Africa & Latin America regions. ACE is already the leading crane manufacturer in India and world’s largest in pick and carry cranes category. In the next five years, we plan to establish ACE as an international brand through quality product offerings and a strong focus on after-sales service. Availability of spare parts for 10 years and an extensive network of channel partners set us apart from our competitors in the market. Additionally, our technically advanced and extensive range of product offering in diverse categories will also play a major role in expanding our footprints globally. 

 

With BS IV norms coming into play in 2020, will it have an impact on construction equipment sector? 

For construction equipment vehicle (CEV) industry, BS IV norms will be implemented from October 1, 2020. ACE is completely geared up to ensure that our machines meet the BS IV standards. This will certainly have an impact in terms of better emission controls and consequently enabling us in offering more environment friendly equipment to the customers.

 

How do you view the potential of construction equipment sector in India? 

The Indian construction equipment sector is undergoing sweeping changes. It is witnessing higher demand amid the government’s resolve to build world-class infrastructure as well as the digitalization of manufacturing processes for rolling out highly advanced equipment.In view of the projected growth and government’s ‘Make in India’ initiative, most OEMs are upgrading their manufacturing facilities in an intelligent and innovative way by using automation, robotics, and advanced technologies and producing high-tech machines that meet global quality standards. ACE is also regularly adding new features to their product lines and expanding their portfolios to become a complete solution provider in near future. This new wave of intelligent manufacturing supported by Internet of Things and technical innovation can be termed as the ‘Intelligent New-Generation Infrastructure Equipment’.

 

Interestingly, it’s not just the growth momentum that the Indian equipment sector is witnessing, but also a positive approach among buyers who are responding well to the innovative equipment, machinery, and solutions, being offered by manufacturers.Also, the emerging growth areas in terms of leasing and rental of equipment, exports and increasing deployment of refurbished equipment integrated with providing timely service to the clients will add impetus to the growth of construction equipment industry in India.

 

Despite the prevailing global uncertainties, rising demand for better infrastructure, modernised methods of agriculture, and growing complexity of mining/manufacturing methods will boost demand for technologically advanced equipment in these industries. Moreover, looking ahead, the growth path widens for the emerging and developing nations, which will inevitably be attractive destinations for machine makers worldwide. The new political dispensation lends a lot of credibility and hope for the growth of infrastructure in the future.

 

Has the recent slowdown in GDP growth affected the CE sector? With the new Government in place, do you see demand for construction equipment improving in 2019-20? 

Now with Modi 2.0 Government in place and its focus on speedy infrastructure development, demand for construction equipment is expected to soar in the next few quarters, registering good year on year (YoY) growth for the next  five years. ACE is already the leading crane manufacturer of India and the world’s largest manufacturer in pick and carry cranes category. As a company, we are ready to leverage this opportunity by gearing up in terms of capacity, delivery, product offerings, and customer service to meet the rising market demand.

 

What are your growth plans for your company (in terms of manufacturing capacity expansion, new product launches, introducing new technologies, etc)?

Our product portfolio consists of a wide range of products covering all segments of construction, earthmoving, material handling, and agriculture sectors. As mentioned earlier, we are the market leaders in the main product segment, ie cranes. We are also fully equipped to cater to markets in various product segments as we have huge installed capacities for our entire product range. 

 

We are confident that we can substantially scale up our market share in earthmoving and road construction equipment and also grow our agribusiness simultaneously. This would enablethe company to improve both its top and bottom lines significantly without much Capex in the next couple of years.