INTELLIGENT COMPACTION!

The government of India has come up with ‘Vision 2030’ initiative aiming to be a $5 trillion economy by 2025 and $10 trillion economy by 2030, the foremost dimension of achieving this vision is to build physical infrastructures such as next-generation roads, railway, seaport, airports, urban transport, and inland waterways which needs requires compaction machines equipment.

India Compactor Market is expected to witness significant growth over the coming years on account of several upcoming projects such as the expansion of public infrastructure, the establishment of new industries as well as a growing number of small and medium enterprises (SME’s) in the country. However, the Indian construction and infrastructure sector witnessed a slowdown in the first three quarters of 2020, mainly due to the outbreak of the COVID-19 virus, which is having a negative impact on the overall economy and would act as a hurdle in the growth of India compactor market in the near term.

According to 6Wresearch, India Compactor Market is anticipated to register growth during 2020-2026. The government of India and Invest India have come up with “India Investment Grid” (IIG) aiming to provide different investment options to global investors in 5000 projects from across the 36 states and union territories. Such initiatives would create ample demand for compactor equipment in the Indian market.

By types, stationary compactor equipment is anticipated to register significant growth throughout the forecasted period on account of an increase in usage of the stationary compactor in the construction and industrial sector for compacting crushed rock, grading, compacting the backfill in narrow trenches and compacting refuse vehicles. The government of India has come up with an initiative to encourage public-private partnerships (PPP’s) and foreign investors to participate in several infrastructure projects such as coastal road project, char Dham highway, char Dham railway, Chenab bridge, eastern dedicated freight corridor, kalpasar project, and Delhi-Mumbai industrial corridor project, thus creating demand for compactor equipment in the upcoming years.

Global Compaction Equipment Market

A machine that is used to eliminate air from the soil and achieve high density. Rollers especially wheeled rollers, are mostly used as compaction equipment. The weight of the compaction can be increased by filling sand or water ballast in the hollow cylinder. Compaction equipment is used to compress and/or compact different types of materials at a work site. In construction sites different tools and machines are used for different purposes, such as waste around the work area is compacted and then disposed of or loose soil around the worksite is compacted before the start of the actual construction work.

Dynamics

The rise in construction in smart cities, also the increase in transport construction acts as a major driver for the market. Also, the rapid urbanization fuels the demand for the compaction equipment market as it gives rise to a large number of demolition sites and new construction sites. The demand for compaction equipment is the huge investments being made by governments for improving infrastructure. There are numerous ongoing & upcoming projects for roads and dams, which in turn, will spur the demand for compaction equipment during the forecast period.

Moreover, the increasing population, which will lead to growth in demand for residential projects, will also support the demand for compaction equipment in the forecast period. Renting and leasing will be trending opportunities in the compaction equipment market. Compaction equipment is relatively expensive and hence, most customers prefer to either rent or lease compaction equipment.

Global Compaction Equipment Market Segment

While compaction equipment is mostly used to compress loose soil, but owing to a variety of compaction equipment available today, this equipment has found a way in all types of construction activities, right from building roads to constructing industrial complexes. This equipment can compress loose soil, rocks, landfill debris, road surfaces, and other materials to a particular density level, so that the ground does not cave with the use or over a period of time.

Companies are investing in compaction equipment and related products mainly in APAC and MEA, where a large number of infrastructure development projects are in progress. Developing economies have a large number of projects ongoing in terms of engineering and construction. Government bodies are focusing on structured facilities such as hospitals, transportation, and tourism, which is boosting the market for compaction equipment.

The highly demanding situation in the construction industry has increased the need for precise, transparent and verifiable results of the compaction process. The terms for bidding and tendering in road construction are getting stricter, as are the standards for quality results. Several key trends are emerging in the asphalt / soil compaction market with the development of the latest generation machines. Performance and productivity remain key issues for compactor manufacturers, with firms keen to maximise output from their latest units.

Roads and highways sector has been one of the key drivers for growth for the infrastructure sector in India. India needs roads, both in rural and urban areas to progress. Government also realises the importance of world class road network and thus, has given significant focus to the sector by way of announcing substantial budget outlay in successive national budgets.  Investments that have been earmarked for this sector present a great opportunity for the OEMs. Many of them have launched new model in soil and asphalt compactors or have upgraded the models with advanced features.

Compaction machine plays an essential role in a wide range of road construction projects. Streets and highways, airport runways and most types of structures cannot be built without proper compaction of base material under paved surfaces.

The compaction machines market, globally, is estimated to reach US$ 3,443.3 Mn by the end of 2015, and is projected to expand at a stable CAGR of 6.2% to reach 6,310.7 Mn by the end of the forecast period. In terms of unit sales, it is estimated that, globally, 342,639 units of new compaction machines would be sold by the end of 2025.

Asia Pacific dominates the market in terms of value currently, accounting for about 40% market share due to higher volume sales of heavy compaction machinery in the region. However, Western Europe is expected to dominate the market in terms of unit sales, over the forecast period garnering more demand for light compaction machines.

Drivers, Restraints & Trends

There has been significant investment being made in infrastructure globally, with rise in the number of paved roads, which in turn is expected to fuel the market for compaction machines over the forecast period. Investment in road maintenance and development alone is expected to account for approximately 28% of the overall infrastructure investment made during the forecast period.

Furthermore, increasing demand for smart cities, new construction projects and building dams and airport runways, in turn, is expected to boost the demand for compaction machinery over the forecast period. Intelligent compaction, including sensors, displays and telematics is the trend observed in the global compaction machines market currently.

The financing industry for heavy compaction machines is expected to expand at a CAGR of over 15% during the forecast period, with leading private and central banks taking initiatives to finance heavy machinery by way of leases or loans. Moreover, European manufacturers are increasingly catering to the dynamic market in Asia Pacific through mergers and acquisitions. Currently, the heavy compaction machinery’s rental penetration and secondary sales market is growing significantly. However, this trend is expected to pose a major challenge for new equipment sales. Apart from this, delay in project clearances, globally, along with low labour productivity, are some of the other challenges faced by the global compaction machines market.

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