Escorts Construction Equipment recently became the first Indian construction equipment company to unveil a hybrid pick-n-carry crane in the country. Dubbed NXT13DC CNG, this pick-n-carry crane can be operated on diesel or CNG, and was exhibited at the recently held EXCON 2022 in Bengaluru.
However, the company had no equipment that is powered by an electric powertrain. It is to be noted that Escorts has already started exporting electric tractors to various international markets.
Sanjeev Bajaj, CE, Escorts Construction Equipment, in a conversation with Mobility Outlook, confirmed that the company has the electrification tech ready for several of its construction equipment. However, the time isn’t right yet to introduce such products in India.
“We are also working towards making our products more digitised. Escorts Construction Equipment is exporting electric tractors to the US and several countries in Europe. The same tech can be easily customised to fit the needs of the construction equipment industry. We are working on the same and will launch when the time is right,” Bajaj said.
Increased Demand But There's A Catch
The company, after a significant drop in construction equipment demand last year, is witnessing a rebound of sorts. Product categories that are dependent on retail customers, including backhoe loaders and small hydra cranes, are still under pressure as there has been an increase in the prices of these following the BS emission norms transition in October 2021.
“These are the challenging times for consumers, who do not see viability in the increased prices in these categories. Rental rates have not gone up but the retail prices of backhoe loaders, small hydra cranes have increased,” explained Bajaj.
Demand for construction equipment for projects, on the other hand, has seen a sharp incline as per the company.
“Fleet owners, bigger customers and corporations are still able to make numbers work for them. The demand there is very high. The demand in road construction, steel sector, public infrastructure, airport expansion and bullet trains is very high. The catch is that these projects require very less number of backhoe loaders and hydra cranes. This is why the whole industry is struggling in terms of these two categories, but is witnessing major demand in other construction equipment categories,” noted Bajaj.
As a matter of fact, the company expects the ongoing push for infrastructure projects to increase the demand for stable, safer, advanced tech equipment and more productive solutions in construction and material handling equipment industry space.
It must be noted that the Government of India has announced infrastructure projects worth over INR 102 lakh crore. Urban infrastructure projects, including Smart Cities, AMRUT, PMAY, HRIDAY, JNNURM and SBM, on the other hand, have a corpus of more than INR 98,500 crore. Moreover, the task force on National Infrastructure Pipeline (NIP) has estimated a capital expenditure of INR 773,915 crore between FY20 and FY25 on rural infrastructure development by the Centre and states put together.
“We understand that whatever infrastructure activities are happening today in Tier 1 and Tier 2 cities will ultimately move on to be done in rural cities as well. While we are designing products for building metros, we have made sure that the same products can be used in infrastructure products in rural India as well. Our experience in the tractor segment helps us understand that we are paced right in the rural construction equipment segment as well,” highlighted Bajaj.
Calculating Technologies
The company, apart from carrying out continuous R&D on electric and other alternative fuels, is also weighing different technologies including AI, ML and IoT for future products. Bajaj noted that finalising on equipping construction equipment with specific technologies is more difficult than doing the same in the passenger vehicle or commercial vehicle verticals.
This is primarily due to the fact that there are a lot of customisations required in the construction equipment vertical.
“A lot of technologies get a little fancy at times. You can add a lot of electronics to construction equipment products and you can capture a lot of data. But the question is does your customer require the same?” shared Bajaj.
He further shared the company is currently working on technologies such as telematics, remote options to control equipment, study & analyse machine & operator behaviour, and maintenance. Most of these, Bajaj claimed, have been passed on to the customers via an app. “Anything that can help my customer do his job better is the technology we will work on,” said Bajaj.
Electric Tractor Tech To Construction Equipment Tech
Bajaj, on being asked if his company is planning to launch electric versions of the construction equipment any time soon, said that Escorts Construction Equipment has got the tech ready to do so. “We were the first ones to launch an electric tractor commercially. Those are being exported in very good numbers. We can bring the same tech empowering construction equipment at any moment,” he said.
The company, however, feels it's too early to launch electric construction equipment in India. “Infrastructure supporting electric construction equipment needs to be developed first. We will introduce electric construction equipment when the time is right,” Bajaj explained. He is of the view that consumers will find electric construction equipment promising as the running costs of the same will be much lower than their fuel counterparts.
Conclusion
Escorts reported a 25.5% decline in standalone net profit at INR 202 crore for Q4 FY22. The company had posted a net profit of INR 271.3 crore in the corresponding period last fiscal. The company has also shared estimated Capex figures of INR 400 crore primarily targeted towards manufacturing and new products creation.
Increasing its exports to 30,000 to 40,000 tractors per year during the next five years is one of the core focuses of the company. The company exports approximately 7,500 tractors every year.