Britain's JCB bets on new India factories to push global sales

Top Stories

»	India’s tech and durables sector sees 13 pc value growth in festive season
»	Apple iPhone exports from India hit record Rs 60,000 crore in April-Oct
»	India's smartphone market to exit 2024 with single-digit annual growth
»	Digital transfers of funds for public services up 56 pc in 2024: RBI Deputy Guv
»	Sensex slips below 78,000, investors lose over Rs 6 lakh crore

SME Times News Bureau | 17 Nov, 2014
Britain-based JC Bramford (JCB), a leading global earthmoving and construction equipment company, has opened its fourth and fifth plants in India with an investment of Rs.500 crore (about USD 80 million), touted as its largest outside its home country.

JCB has pinned its hopes on India, investing in the new 115-acre complex spread over one million square feet.

"The only market I am optimistic about is India," Graeme Macdonald, chief executive of JC Bamford excavators, told media at the inauguration of the company's largest factory outside Britain at Jaipur last week.

JCB claims a commanding 75 percent share of the Indian construction equipment market, though sales declined 5.62 percent from Rs.5,862 crore in 2013-14 as construction slowed and economic growth lagged.

"It is a testimony to our faith in the market that we started these factories at the height of the economic slowdown in May 2013," explained Vipin Sondhi, managing director, JCB India.

The new facilities, which will produce telescopic handler 'loadalls' and skid steers, hope to piggyback on the infrastructure push started by the new government and Prime Minister Narendra Modi's 'Make in India' campaign.

Equipment made in India is exported globally and the prime minister's initiative is one that the new plants will aid. The global construction market is expected to rise to $20 billion, according to a report by analyst firm AT Kearney.

"One-fifth of our revenue globally is from India, and 50 percent of what we sell in Malaysia is made in India," said Macdonald, adding emerging economies in Southeast Asia and the Middle East will aid exports from the plants in India.

"The skid steer is excellent for carrying goods in cramped urban spaces," added Sondhi, "and will help in carting goods in crowded streets and aid in solid waste clearance for a Swacch Bharat".

JCB hopes that these two machines will push global sales for the company. The ambitious plans of the Indian government, from industrial corridors to smart cities and new highways, will fuel demand for construction equipment that the manufacturer expects will use more of its bright yellow machines.

"Every minute, 30 people move from rural to urban areas, India will construct more in the next three decades than in the last 5,000 years and they will all use machines made in JCB factories" said Amitabh Kant, secretary, Department of Industrial Policy and Promotion.

"The key challenge is for India to grow at 9-10 percent year after year, and this challenge cannot be met without the manufacturing industry growing at 13 or 14 percent," added Kant.

JCB has just built its 200,000th machine at the Jaipur plant in 2014, four years after it reached the 100,000 milestone that came 30 years after India operations started from Ballabhgarh, Haryana, in 1979.

Looking for a share of the much bigger power generation market, JCB has also started producing industrial diesel generators.

"It is a natural extension of the construction market where we are the market leader, and we are already exporting generators out of India," said Sondhi.

Safety equipment will also drive sales.

"We sold 100,000 pairs of work shoes, in only our second year of manufacture in 2014," said Sondhi. "We will add more items for the safety equipment market in the coming year."