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Construction : Web Exclusive | April 2016 | Source : Equipment India

We expect a CAGR of 10 per cent during 2016-2020 in material handling sector

“With the Prime Minister’s ambitious plan of “Make In India” taking root, we expect to see good growth in manufacturing and consequently in logistics and distribution activities for the next few years,” says Cavas Dumasia, Vice President - Sales & Marketing, Godrej Material Handling Division.

As per your estimate, what is the current market size of intermodal logistics, distribution nodal hubs and warehousing in India?
The market size of logistics, distribution and warehouses to a large extent depends on the manufacturing and trade sector. Due to the slow growth in manufacturing over the last few years, logistics and sales, of material handling has seen subdued growth. With the Prime Minister’s ambitious plan of “Make In India” taking root, we expect to see good growth in manufacturing and consequently in logistics and distribution activities for the next few years.

How do you visualise the market growth in this segment during FY 2016-2020 ? What is the impact of Budget 2016-17 on this industry?
Based on the thrust of the current government in infrastructure and the “Make In India” programme, we envisage a a good growth in the material handing segment. The Budget of 2016-17 also lays a lot of emphasis on infrastructure building which should have a positive effect. Further, our Finance Minister is committed to fiscal consolidation as stated in the budget and this should assist RBI to reduce interest rates. This will make investments in capital goods easier. We expect a CAGR of 10 per cent in the period 2016 to 2020 in the material handling sector.

Could you elaborate on the range of customer requirements for the MHE solutions ? Your comments on advantage and your products.
Customers typically look at solutions to their material handling needs to transfer materials (mostly in pallets) from Point A to Point B. As the goods are mostly palletised, this leads to high productivity and reduces overall costs in the system. Customers’ range of requirements can be grouped under the following:

High utilisation of cubic space in a warehouse/plant: For instance, we are the only Indian company to manufacture forklift trucks which can work in aisles below 2.2 m width and lift pallets as high as 12.5 m.

High productivity: As customers began handling heavier loads inside the factory/warehouse, there arose demand for clean trucks that could handle loads up to 5 tonne but without creating pollution. Godrej is the first Indian company to develop and offer a 5 tonne electric forklift truck to meet this need.

Achieving the necessary throughput as per the duty cycles required: Godrej has developed a new series of electric forklifts that deliver speed and power almost at the level of diesel forklifts. They combine the quiet, clean operations of electric technology while delivering round-the-clock powerful performance like diesel forklifts. All these to be carried out in a safe and organised manner for the material to be handled and the people in the environment including the operator of the equipment.

Godrej Material Handling also offers a range of equipment from world renowned material handling equipment manufacturers like:

  • Crown warehouse trucks
  • Komatsu forklifts
  • Tennant industrial cleaning equipment
  • Hubtex side loaders
  • IMER aerial work platforms

Godrej Material Handling has always benchmarked its offerings to the best in the industry. This has ensured that over the years, the company has to its credit many firsts in the Indian material handling space:

  • AC technology in electric forklift trucks
  • Articulated forklifts for narrow aisle high lift applications
  • First Indian equipment manufacturer to provide hiring solutions
  • Various attachments which substantially improve productivity of customers – tyre handler, paper roll clamp, bale clamp, etc. 

The company has a range of counterbalance trucks, warehouse trucks and even more advanced machines like side loaders. Each of these categories has several types, models and capacities. The main equipment is supported by a wide range of accessories and attachments that make the lift truck more versatile and capable of addressing almost any handling need of a user.

Does the range of equipment and solutions provided by your company address the customer requirements in a holistic way?
Godrej Material Handling offers the market:

  • Equipment on hire or outright sale
  • Technical support and services
  • Genuine spare parts and lubricants
  • Maintenance contracts tailor-made to customer requirements
  • Training – Godrej is the first equipment manufacturer to be accredited by NSDC

Buyers and users of lift trucks are increasingly conscious of Total Cost of Ownership (TCO) rather than focusing only on price while evaluating equipment purchases. This includes cost of fuel/energy, spares services, consumables, operators, etc over the life of the equipment. Godrej has always strived to develop products and services which make the TCO attractive for its customers. Even at present, we are evaluating new power trains, energy sources and lubricants that will continue to reduce the TCO for our customers in future.

What are the challenges faced by the MHE industry? Could you indicate how these challenges can be suitably overcome? Can the city, state or central administration be of help? If so, how?
One of the biggest challenges faced by the material handling industry is related to the plethora of taxes and duties across various states in India. Introduction of GST will be a game changer for our industry as it will enable our customers to consolidate and build warehouses and distribution centres where it makes economic sense rather than having them sub-optionally spread across various states.

Other challenges faced by MHE manufacturers in India are the sharp practices followed by some global players who avoid payment of taxes in India by utilising methods such as high sea sale, etc. This method enables the seller to sell the equipment in India in INR without paying VAT. At the same time, Indian manufacturers have to bear incidence of VAT on their sales, thus putting Indian manufacturers at a disadvantage vis-à-vis such imports. State Governments have to be vigilant to stop these kind of practices and only allow genuine cases to happen. There is also discrimination by various states for manufacturing in India with the application of Entry Tax on goods manufactured in India. This Entry Tax is not applicable on products imported. All the above taxes on Indian manufacturers flies in the face of the Prime Minister’s ambitious “Make In India” initiative and needs to be addressed expeditiously. Our association Society of Indian Materials Handling Equipment Manufacturers (SIMHEM) is in the process of taking up this with various State Governments.

Any additional information you wish to share with us?
The material handling industry, especially with relation to the industrial trucks, is very small in size vis-à-vis markets in other countries of equivalent economic size. While the awareness for the need of mechanised handling is increasing at a faster clip than before, certain products and aspects continue to be a constraint for this industry.

  • Lack of standards for palletisation

  • Unsafe lifting and handling practices largely prevalent in small scale industries and unorganised sector

  • People expected to lift loads heavier than 25 kg which is not a practice in most well established economies worldwide.

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