In Conversation... Mr. Jitender Aggarwal Director –AEIPL shares his experience and thoughts on future of this sector Aggcon Equipments International (P) Ltd is the leading supplier of construction equipments on rental/hire basis based in Faridabad Haryana since 2003. The organization has successfully provided services to many government, semi government, multinational and private organizations in and around India. What will be the main demand drivers in the equipment sector? The main demand drivers will be new projects pertaining to widening of roads, construction of new flyovers and underpasses .And, of course, Metro rail, Airports, Power Projects construction and mining equipment. Around 90 per cent of equipment sales are routed through funding from financial institutions. How has the recent hardening of interest rates affected the equipment market? Yes, that is true. However, it has a direct correlation with available projects in the market. Once we have more projects cleared on the table it will automatically help in easing out the financial crunch as well. Most customers insist on renting newer machines even if older machines are in good condition and still efficient. Most of the clients demand newer equipments on rent basis and the situation has not improved vis-à-vis older equipments. Thus, there is pressure on rental companies. Older equipments and machines, even if they comply with all safety standards, are preferred by only a few for deployment, that too at a lower price. What are the areas that AEIPL will be focussed on? 33 The products are purchased from renowned manufacturers and our services are appreciated for timely delivery, cost effectiveness and reliability. We expect robust demand in this segment over the next few years, considering the We expect latent untapped potential of lease-rentals in the Indian market. The new GST regime will have a liberating effect on robust this segment and will unleash this latent rentals’ demand in India. We see great opportunities with lot of projects demand in in Pow er, Refinery, Petrochemicals, Fertilizers, Metals , Minerals , Railways, Airports & Roads getting kick-started in this segment the coming year. Our focus would be to ensure participation in each of these sectors. Though our immediate focus over the next is to deploy our existing fleet on long term basis wherever we get opportunities, we are not averse for need based few years, or project based expansion. considering the latent What is the size of the equipment rental market in India? As a company, what is your own assessment? untapped potential of No definite statistics is available and it is difficult to arrive at the exact size. Besides, the views are hugely diverse. It lease-rentals could be about Rs.3000 crore rental per annum. This is a very rough estimate and includes fleet owned by project in the Indian owners, EPC companies & mechanical contractors. market. How much of the equipment rental segment is with the larger players vis-à-vis the medium The new and smaller players? GST regime Larger players definitely have an edge over medium and small equipment owners since the higher capacity will have a equipments owned by mostly large players earn 10-15 per cent more rental charges from the end-users. liberating With the huge shortage of skilled manpower nationwide, how do equipment rental effect on companies handle the situation? this segment and will A large number of equipment have been imported; both new machines and used second hand machines, whereas unleash this operators, technicians and engineers for maintenance of these equipments are in short supply in India. Equipment rental companies, in small and medium sector, outsource the services of operators, technicians and engineers at latent rentals’ a higher cost. Those equipment rental companies which have their own in-house maintenance facility are able to demand in www.ghmediabusiness.com sustain maintenance cost and train skilled manpower. India.