SML has a network of 18+ depots strategically located across the country

– RISHI SANGHVI

Managing Director, Sanghvi Movers

How do you look at the equipment rental industry growing?

India is witnessing a capex cycle with the government focusing on infrastructure. Notwithstanding the global issues, industries are on a growth trajectory and we are witnessing strong demand for cranes in the next 2-3 years. All sectors are performing well such as steel, cement, renewable wind energy, coal thermal power, oil and gas, refineries, metros, railways and bridges.

In the thermal power sector, NTPC is executing several Ultra Mega Power Projects across the nation. These projects are in the 660 – 800 MW class with a total capacity addition of approximately 10 GW. The cement sector is witnessing aggressive capacity addition with greenfield and brownfield expansions of 18.15 MTPA. Similarly, the steel sector is expected to add 13.5 MTPA in Kalinganagar, Bellary and Angul. Several expansions, upgrades and new refinery and petrochemical projects are coming up in Barmer, Paradip, Vizag, Baruni, Panipat, Vadodara and Mahul with a combined new capacity of 20.6 MTPA. The wind sector will add another 8 GW of new capacity addition this financial year. Most cities have a metro or airport under construction and the HSR will open to further infrastructure opportunities.

Sanghvi Movers has been able to leverage this demand and increase the utilization of cranes. Our rental yields have gone up and at the same time we have invested in buying new cranes. We have also focused on reducing our operating cost and bank borrowings. All these factors have contributed in the growth of Sanghvi Movers Limited.

Many mega projects have started recently which has led to the entry of new contractors. What measures do you take for checking the client’s due diligence?

While working with contractors we do financial due diligence on the customer and assign a credit rating. This credit rating strictly dictates the credit period that can be given to a customer. Besides, blue chip listed contractors, we generally work with mobilization and one month advance. We often try to secure the contract value during the period of the contract itself and protect ourselves through advance payment or through postdated checks. For major contracts, we evaluate the past track record for both safety and market reputation.

What are your expectations from the OEMs?

OEM’s play a crucial role in the construction equipment and infrastructure space. First, OEMs should focus on selling equipment at the true cost of manufacturing and not saturate the market with oversupply and supplier credit. Second, OEM’s should provide a good service network with readily available spare parts. Third, OEM’s should provide ample training to their customers to build up both operational and technical know-how.

Does your company provide electronic accessories for crane operation; how do you ensure their optimum utilization?

Yes we are providing electronic accessories like wireless remote for safe and fast assembly, dismantling, and crane placement. We also provide additional electronic accessories focused around cameras, wind anemometer, solar lamps, safe load indicator, warning horns/alarms, extra focus lights, GPS, and fuel sensors which all add extra safety in crane operations.

What crane safety services/measures being provided by the OEMs?

OEM’s provide the latest and most advanced safety system like safe load indicator, hoist limit switches, electronic inclinometer, limit switch for boom movements, hydraulic boom back-stops, wind anemometer with integrated position light, Rota flare warning light and working lights. Safety valves for the prevention of pipe & hose ruptures.

OEM also provide control system like Servo control with electronic synchronizing device on hoisting winches, all motions controlled independently by joystick selectors, Electronic proportional valve pilot control integrated in stored program control system inclusive diagnostic system, Automatic power control for optimal utilization of engine output; emergency control system, Working area limitation, ground pressure indication, Diagnosis and troubleshooting, Wireless rigging remote control and Wireless emergency remote control are standard.

How do you ensure spare parts supply to the remotest parts of India?

SML has a network of 18+ depots strategically located across the country. At all our depots, we maintain regular wear and tear inventory in order to optimally service our assets and reduce downtime. A dedicated team at our central workshop caters to any critical or urgent requirements.

Brief us about any recent addition to your fleet.

SML has invested approximately 280 cr combined in the past and current financial year on new crawler and all terrain cranes. Next year we will be investing approximately 250 cr. We are investing in heavy duty crawler and all terrain cranes from 110 – 1600 MT along with supporting equipment. Therefore, we would have done a capex of 510 cr, subject to Board approval from FY 21-22 – FY 23-24. Our capex is funded through long term debt and internal accruals, where Sanghvi Movers Limited is providing 25% of the margin money.

What are the issues that need to be addressed collectively by rental associations, big rental companies, and the OEMs?

Rental associations, big rental companies, and the OEMs need to collectively work together to ensure the sustainability and long term growth of the construction equipment industry. This involves major focus on three areas: safety, manpower, and value additions by stakeholders. Going forward, India needs to establish safety and manpower regulations that are benchmarked with the highest international standards. Proper use of equipment, timely preventive maintenance, high levels of training and awareness, creation of experienced talent pool will all add to the overall well being and sustainability of the construction equipment industry. OEM’s should focus on selling equipment at the true cost of manufacturing and not saturate the market with oversupply. Rental associations should act as a check and balance between all stakeholders in the rental industry. They should listen to their members and address their pain points against defaulting clients or aggressive OEM’s. Big rental companies should value their investments in expensive equipment and at the same time appreciate the value they add to their customers which should determine theur pricing of rental contracts.

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