The leading earthmoving and construction equipment manufacturer JCB India invested in expanding its manufacturing capacities to beat the slowdown, says MD and CEO Vipin Sondhi to Ashish Sinha.
The earth moving and construction equipment (ECE) industry is back on track. What is driving its growth?
This growth in the ECE industry is primarily driven by the roads and highways sector. This growth in the sector needs to be sustained, and a lot depends on the execution of the projects that are being announced. Also, sustainable revival led by only one sector is not adequate. In addition to roads and highways, other sectors also needed focus, which seems to be addressed by Budget 2017–2018, with irrigation and railways getting significant outlay.
What were the main reasons responsible for the downturn?
The ECE industry is dependent on projects, mainly infrastructure for growth. The overall economic slowdown and delay in infra projects led to low confidence amongst builders, developers, contractors and other stakeholders, resulting in delay in construction projects. These coupled with land clearance issues and acquisition delays, affected the overall demand for construction equipment.
How did the downturn affect JCB? Can you specify in terms of revenue, production and profit (or loss)?
We, at JCB, were adversely affected due to this down cycle. However, we invested in creating capacities and expanding our manufacturing base, products, and product support network. This was done to be able to cater to demand as it picked up, which it has by over 40 per cent in 2016.
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