By IANS
Bangalore : The Indian earthmoving and construction equipment (ECE) industry is expecting tremendous growth in the next 7-8 years, fuelled by a burgeoning economy and huge demand from the infrastructure sector, said participants at a trade fair here Wednesday.
Captains of ECE industry, participating in the fourth edition of Excon 2007 trade fair, which began Wednesday, are gung-ho about sustaining current double-digit growth rates, thanks to the projected investment in core infrastructure sector by the central government.
“We foresee the ECE industry growing fivefold to $12-13 billion by 2015 from $2.3 billion, as gross capital investment in the infrastructure sector is set to increase to nine percent from five percent presently,” Excon chairman and JCB managing director Vipin Sondhi told delegates in the inaugural session.
According to the 11th five-year plan (2007-12), the core infrastructure sector comprising power, roads, highways, railways, ports, airports, mining and irrigation will require massive investments to the tune of $490 billion over the next five years to sustain current 9-10 percent GDP (gross domestic product) growth per annum.
“The construction industry accounts for 40-50 percent of the plan outlays and contributes about 20 percent ($59.4 billion) to the national GDP. It employs around 31 million people, second only to the agriculture sector,” Sondhi pointed out.
“The industry has witnessed a sustained growth of 30 percent per annum during the last four years and is poised to grow at 55 percent in the current fiscal (2007-08), outperforming even the growth of IT and biotech industry in the knowledge sector,” he added.
Setting up of special economic zones (SEZ) across the country is estimated to generate around $2.6 billion revenue for the industry in the next couple of years.
The industry is, however, dominated by 12-15 major players, including a couple of multinationals, which entered the country by setting up either wholly-owned subsidiaries or by forming joint ventures with Indian partners.
The top 12 players accounted for 94 percent of the $2.3 billion the ECE industry generated in the last fiscal (2006-07).
“There is plenty of room for more players to enter the ECE industry, which is witnessing exciting times on account of sustained growth in housing, manufacturing and services sectors,” said Excon co-chairman S.K. Mitra.
“With the industry opened up for 100 percent foreign equity investment, more global firms are expected to make a beeline for joint ventures or wholly-owned subsidiaries in coming years,” he added.
Earlier, Karnataka governor Rameshwar Thakur unveiled the five-day international exposition-cum-conference at the sprawling Bangalore international exhibition centre (BIEC) on the outskirts of India’s IT hub and delivered the inaugural address.
Confederation of Indian Industry (CII) vice-president and ICICI vice-chairman and CEO K.V. Kamath and BIEC chairman and former CII president J.N. Godrej also addressed the gathering on the occasion.
Touted as the third largest ECE expo in Asia, the biannual event has attracted 280 exhibitors, including 56 overseas firms, to showcase their products and services at the venue spread over 110,000 sq metres.
About 30 companies are holding live demos of their equipment and machinery.
With international participation being the largest this time, the organisers have set up country pavilions for participants from Britain, China, Germany, Italy and South Korea.
The event has also attracted delegations from France, Japan, the Netherlands, Russia, Singapore, Spain and the US.