The push is bound to result in good traction for the equipment and going forward, the market will improve
The push is bound to result in good traction for the equipment and going forward, the market will improve
Construction equipment manufacturer Tata Hitachi is upbeat about the growth prospects in the backdrop of the Centre’s emphasis on fast tracking infrastructure development, especially the ₹110 lakh crore investment the government has proposed on the National Infrastructure Pipeline (NIP) projects.
The push is bound to result in good traction for the equipment and going forward, the market will improve. “We have already seen good improvement in the last few years and in coming years expect average 10-15% [revenue] growth,” said Sandeep Singh, Managing Director, Tata Hitachi Construction Machinery Company.
Speaking at the Hyderabad launch of the 5-Tonne Wheel Loader ZW225, which the company described as a Made-in-India product with Japanese technology, Mr. Singh said that while there is a pick in the demand for the machines post the pandemic impact, rising input costs and Chinese manufacturers of the equipment resorting to a price war, continue to pose challenges.
Their pricing is more than 20% lower, he said to media queries on the impact of competition from Chinese firms. On input costs, he said a sharp increase in steel and commodity prices since last year was impacting the margins. Last fiscal, Tata Hitachi turnover was around ₹4,000 crore and it was eyeing 15% growth this year.
Mining excavators, wheel loaders and backhoe loaders are the three main product segments for the company, which has manufacturing facilities in Dharwad and Kharagpur. The new, 5-Tonne Wheel Loader ZW225 is mainly targeted at the coal and cement industries, he said. The company is aiming to sell 40-50 machines this year, each priced at ₹1 crore.
On expansion plans, Mr. Singh said that the company is investing around ₹250 crore every year towards capital expenditure, mainly on new products and towards additional facilities or changes at the plant. It has no plans for another plant as the installed capacity of 11,000 machines is sufficient to meet future demand. The company’s production is around 8,000 machines a year.