Built in India

Indian government policies are aimed at raising the country’s economic growth rate to 6.5% or even 7% for 1998. A more conservative forecast by private economists of 5% on GDP for 1998 still makes India one of the best economic performers in Asia. Before the region’s economic collapse this would have been a relatively poor figure. The country’s relative immunity to the crisis has been attributed in part to the fact that the economy remains partly closed – highly regulated and protected, with extensive state ownership.

During the three years up to 1997, growth averaged more than 7% but poor export performance led to a decline in India’s share of world trade in 1997. The sharp fall from more than 10% before is partly due to the fact that 20% of exports went to the economically devastated Asian countries. Government figures showed an 11.63% drop in exports for October last year but a 3.2% fall overall for April to October. For the same period, non-oil imports, comprising mainly industrial raw materials, components and machinery, rose 18.71% to $21.2 billion.

Parallels have been drawn with China but there are differences – economists do not expect that India will have anywhere near as large or sustained an export boom, for example. Prospects for economic growth in India were also hampered by five nuclear tests carried out last May which discouraged foreign investors. Indonesia’s economy was expected to shrink by as much as 20% in 1998 which appears to show India even better off. However, one view is that to reach the same GDP per capita level as the depressed Indonesia would require 7% growth for 15 years, and as many as 46 years to reach Malaysia’s current level.

To stimulate growth the government has promised increased spending on infrastructure and agriculture and privatisation of state-owned industry. A rapid rise in the demand for fuel and power means increased domestic production is needed. A $3 billion nuclear power plant is planned for Kudankulam in Tamil Nadu, south India. The 2x1000MW project is to be completed by India’s Nuclear Power Corporation and experts from Russia.

Haldia Petrochemicals Ltd has a petrochemical plant under construction in West Bengal, about 120km north of Calcutta. India’s annual oil consumption of 77 million tonnes is increasing at 8% p.a. which means a refining capacity requirement of at least 100 million tonnes in the next 10 years, according to one private sector petrochemical company. As a result, a significant rise in demand for lifting equipment has already started. A considerable proportion of this may be attributed to the massive Reliance Petroleum refinery, under construction at Jamnagar.

All this activity is accompanied by a demand for tighter construction schedules, especially for the private sector projects. This, in turn, is promoting a significant shift towards mechanisation.

Combined sales of all types of mobile crane in India nearly doubled in recent years, from 326 units in 1992 to 646 in 1996. Sales of Escorts cranes alone increased from 161 to 417 units in the same period.

Indigenous crane manufacturers feature strongly in lifting categories up to about 75t, but above this capacity they barely figure.

However, since 1987 Tata Engineering & Locomotive Company (Telco) has built the Hitachi-designed KH 500 100t hydraulic crawler crane in India. The company was set up in 1945 to manufacture steam locomotives and has been building cranes since 1962. Telco’s turnover was $1753 million as at 31 March 1998 and there are 36,000 employees at three plants. Telco has announced its intention to sell its construction equipment division to a proposed new subsidiary, Telco Construction Equipment Company Ltd.

Its range of crawler cranes also includes the 18t capacity Tata 320 and the 75t capacity TFC 280 which are P&H designs. The latest model, introduced in 1997, is the TFC 75 which is an uprated version of the 320. It has a 25t lifting capacity and 31m maximum boom plus 6.5m fly jib.

Demand for cranes was good in 1997 for road, port and power station projects but was slow last year, according to CT Vazirani, assistant general manager, marketing at Telco. Final implementation of some government projects is yet to be decided and he says that the influx of used cranes from abroad has had a big impact on sales. Last year Telco sold 25 units of model 320, 10 units of model TFC 75, 40 units of model TFC 280 and two of the KH 500 model. Total crawler crane sales in India for 1996 were 78 units, down on the previous year’s peak of 97 units.

CT Vazirani says that customers tend to be in civil engineering, steel or chemical industries. The hiring segment remains constant at about 30% of new sales because, he says, in India there is a strong feeling of ownership and companies prefer to own an asset. Full boom with jib extension is the most popular configuration and about 25% of cranes are used in dragline applications. A particularly long economic life is expected in India and the mechanical cranes are said to be more rugged and easier to repair than hydraulic designs. Additional hydraulic models are being considered but CT Vazirani says there is still a place for mechanical cranes which are particularly useful for plant construction.

Amongst many other things, Telco manufactures cars, commercial vehicles, engines, excavators, wheel loaders and other construction equipment. Collaboration is common in India and includes agreements between Telco and Cummins and with John Deere. In a similar vein Escorts Limited has links with Franna, JCB, Claas, Yamaha and others. With a group turnover of $1bn, the company sold 48,330 tractors in the year 1997 to 1998. In the same period Escorts JCB sold more than 1700 backhoe loaders.

Escorts Construction Equipment Ltd claims to be India’s largest hydraulic crane manufacturer. It is also probably the world’s largest pick and carry crane manufacturer, according to export manager, Chander Kalra. Total annual production is about 600 cranes and approximately 550 of these are pick and carry models. Total sales for this type of crane in the Indian home market increased from 211 units in 1992 to 480 in 1996. The company also manufactures Faun-designed 18t, 32t and 40t rough terrain cranes and the Franna-designed model 1214, described as an all terrain crane. Figures for rough terrain sales in India from all sources show a less dramatic increase from 30 units in 1992 to 57 in 1996. Escorts sells Fassi loader cranes throughout India and is planning to manufacture them.

First produced about 25 years ago, the tractor-based pick and carry cranes are of simple design, easy to maintain and very versatile, the company says. They have Perkins S4 engines, Vickers hydraulics and own-brand cylinders. The current C8000 and 8100 models, with 8t and 10t capacity respectively, are the most popular. There are more than 5,000 working in India. Reliance has about 100 units and Larsen and Toubro has about 200. The 15t model 8150 is a different design with hydrostatic transmission and the cab is mounted in the centre rather than at the rear.

Domestic market sales are expected to improve soon when pipeline projects start and Chander Kalra says many other industries are now buying a JCB backhoe loader and a pick and carry crane. Over the last year cranes have been exported to Africa, Gulf countries, Oman, Nepal etc.

About 40 units were the small pick and carry models and up to 30 were the larger rough terrains. Chander Kalra says exports are picking up and he is looking for dealers, particularly for the UK and North and South America.

Also pushing exports, TIL Ltd claims to be India’s largest crane manufacturer with more than 70% of the domestic mobile crane market (India’s armed forces have more than 450 TIL cranes). The ‘Little Bull’, a 10t pick and carry crane has been sold in the Middle East and Australia. Ironic, in that the design, similar to the Escorts type, came from the now defunct Linmac in Australia (Linmac design returns… July98, p11). Widening its field of interest, last year TIL was appointed Manitowoc distributor for India (Further new agents… Sept98, p7).

TIL has been building cranes since 1962 and the range includes yard cranes, truck cranes and RT models. Some are Coles designs and and certain Grove models are built under licence. Discussions are ongoing with Grove’s National Crane with a view to manufacturing some of its truck mounted cranes. The first Grove GMK 6250 sold in India is soon to be delivered to the Mangalore refinery. It is an existing Grove user and owns several models including the TM 1500.