We have a huge population of machines working in northeast

P Ramesh, Managing Director and CEO

How do you assess the overall market scenario?

The overall market scenario has been really good. We have witnessed continued focus on budgetary outlay. Awarding of many projects especially in the road sector has given a fresh lease of life. Road equipment manufacturers have benefitted. We grew almost 50% and have increased our revenues by four times.  We expect this year to be good as well.  The growth will sustain at least for the next half a decade. Many projects awarded are yet to take off, and there is a huge amount of projects in the pipeline, and this will definitely sustain the growth.

How do you assess the potential from northeast?

Northeast offers tremendous opportunities to all the equipment manufacturing including Wirtgen. For almost a decade there have been projects being awarded in the northeast. However, the real action on the ground was not as we had anticipated. I feel this may change now and there will be more fund flow, for projects. The central government is very clear in its intent in strengthening the strategic roads and railways in northeast area. I expect the activities to pick up in the coming years.  We have really standardised technologies like pavers and compactors and also specialised products like milling machines, 100% use of wrap, and new technology like CTB which will replace the aggregates.

How strong is your presence in the northeast?

We have a huge population of machines working in northeast. But our share of business from contractors based in northeast is small.  Our presence in northeast mostly is with contractors from outside the northeast, who have taken up sizeable projects. However, we have been able break this with our Hamm rollers. Now we have sizeable population of Hamm rollers in the northeasst. We have already launched 6 m paver in wheel and 7 m track, both assembled in India.  These will be ideal for the Northeast market, and I expect this to do well. The other product what we expect to do well in the northeast is our track mounted crushers which are easy to operate, easy to shift from one site to other even in difficult terrains; we have already few machines working in the northeast.

What about the scope for milling machines?

It is picking up. We have had discussions with some of the leading contractors here, and I think there is good potential for milling and recycling equipment.

Do the smaller packages have an impact on equipment suppliers?

The package size of road projects is small, and I think the government has purposely made it small so that local contractors are qualified and do the work, upgrade themselves in the process to the next level and so. Even a typical project of Rs 400 crore in any part of India is subcontracted to smaller packages that the local contractor gets prequalified, invest in equipment and machinery, do the work and upgrade their capability. I think it is the right political message.

What the government is trying to do and should do is have most stringent prequalification norms.

Do you think there is a disparity in adaption of technology?

Technology being used in the border roads is not very advanced. There are efforts to refine and reform; however, it not easy to change as they have the L1 concept.  It will take time.  A better option is to facilitate and manage the projects as NHAI has been doing.

What are the prospects for equipment bank?

Equipment bank is nothing but rental.  Most of the rental companies in India are small players, working in specific areas because of complicated tax structure. The movement of equipment across the boarders are quite cumbersome. However, once GST is implemented it can dramatically change this scenario and rental may pick up.

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