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.