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Home arrow Engineering, Technology, Research and Development arrow German cos looking to tap India's Construction & Mining Equipment market
German cos looking to tap India's Construction & Mining Equipment market Print E-mail
Tuesday, 08 December 2009
Increased interest from German companies to setup manufacturing units in India.

The German Construction Machinery, Building Material Machinery and Mining Machinery Manufactures supplied equipments worth around 300 Million Euros(approx Rs. 1950 crores) to India in 2008.

"We find increased number of German companies looking to India as a potential market. We find reputed German companies like Hunger International, Argo-Hytos, Wirtgen, Putzmeister, Bosch Rexroth  who have already setup manufacturing facilities in India or would be setting up in the near future or expanding their facilities," said Rajesh Nath, managing director of VDMA India (German Engineering Federation).

In order to better address the market demand, a large number of Construction Machinery, Building Material Machinery and Mining Machinery Manufactures are expected to step up their sourcing activities from India in the near future.

"We feel there would be increased interest of German manufacturers to setup manufacturing or assembly units in India. However due to global recession some investment plans have been postponed. With global economy expected to recover by 2nd Quarter of 2010, we are hopeful that 2011 would see a spate of investments. Using global sourcing network, we find German companies looking at sourcing components, castings etc from India not only in Construction Machinery sector but also in other engineering sectors," added Mr. Nath.

"Although cost of production in India is substantially lower, however taking productivity and losses due to quality into account, there would still be a cost advantage of about 15-18 %," he said.

This time India is the partner country for Bauma, the biggest trade expo for building materials, mining machines and construction vehicles and equipment, which will be held in Munich in April 2010. "There are 38 companies having confirmed participation. Another 20 odd companies are on the waiting list. However at this stage the chances of getting space appears bleak as the Show is totally booked," Mr. Rajesh Nath said.

In the current five-year plan (to 2012), around 22.73 trillion INR (330 billion euros) is being invested in the expansion of the road and rail network, construction of new sea ports and airports and in improving energy and water supplies. The level of investment in the building & construction industry in India in 2008 was around 8.94 trillion INR (130 billion euro). It's growth rate from 1998 to 2008 was around 140 percent.

India's new mining policy is expected to attract more private investors and the proportion of mining in gross domestic product is expected to increase from 2% to 5%. This will generate an estimated US$ 250 million foreign direct investment in the country in the next five years. India has an estimated 350 billion tonnes of coal reserves, 750 million tonnes of crude oil and 1075 billion cubic metres of natural gas reserves. Coal India is the largest coal producer worldwide. It extracted 403 million tonnes in 2008.

 
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