Rental Players Are Under Pressure To Upgrade Their Fleet Composition

Rental Players Are Under Pressure To Upgrade Their Fleet Composition. For a rental player fleet addition and deletion is a continuous process.

Navi Mumbai, India (prHWY.com) February 15, 2013 - For a rental player fleet addition and deletion is a continuous process, says Himadri Sankar Bhattacharjya, Chief Executive Officer, Quippo Construction Equipment Ltd in an interview with EPC World.

What is your overview of the Indian equipment rental market? The growth of equipment industry is linked to the infrastructure development of the country. Looking at the present infrastructure development happening in the country, what is the current growth rate of the equipment rental business?

Ideally speaking the rental industry has not flourished in India as it should have, especially in comparison to the international market. This is mainly due to absence of the major organized rental players, like QUIPPO, in the industry. Though international scenario witnesses a share of nearly 50% to rental out the total equipment market, it is roughly between 7 to 10% only in India.

Currently, there is a sluggishness prevailing in the infrastructure market due to global economic slowdown and various socio political issues faced by the government, leading to delay in major projects in India. However, we are fairly hopeful that, the 2013 would reflect an upward turn with the regained momentum of the delayed/held up infra projects and in turn facilitate growth in the equipment utilization as well as rental market.

Project developers will surely opt to rent rather than invest huge capex, which could otherwise be channelized in their core business. Moreover, investing into high value equipments which is subject to wear & tear does not look lucrative, more so in a short term usage.
As such rental is the only solution
a) To bridge the gap of assets
b) To manage large sites with multiple usage of machinery
c) Handle multiple sites across large geographical spread

Can you elaborate on the benefits of hiring equipment vis-a-vis purchasing it?
Procurement and management of the infrastructure equipments requires undivided attention which is obviously not their core area, rather these jobs should be left to the specialist like QUIPPO. The advantage of this proposition is immense. Construction companies save hugely in CAPEX for their core business areas. Apart from repair, maintenance and storage the liability of manpower resources engaged for fleet management can be shifted to the rental partners. A prime concern on interstate movement of equipment with its complexities of taxations and cost implication is also taken over by rental companies. Much of these get smoothened where companies like Quippo with a PAN India presence comes to their support even in remotest of locations. The construction companies can also remain unaffected from the factors like machine obsolesce, loss in disposal and deprecation.

What are the operational challenges faced in managing and servicing a huge fleet of equipment?
It is really an arduous task to manage and service huge fleet of equipment and that too when they are of different makes models and specifications. In this fast changing world, equipment manufacturers are also facing lot of challenge to make their product different from others, so as to have a better edge in the market. So every day you would find lot of new products with advanced technology being introduced in the market. As a equipment service provider, we are facing challenges not only w.r.t continuous upgradation of our fleet, to match the market demand but also to develop the skill sets of our operations and technical/maintenance team for these equipments. Again considering the tight money market and deteriorating R.O.I. one cannot afford to maintain identified people for different set of equipments. Hence, multi-skilling capabilities in operations and maintenance team are the only solution to survive in the market. Again retaining the good team is also a big challenge which can be better addressed by companies like us.

Can you throw light on the Equipment Banking concept and how has this concept made way amongst the corporate?
Equipment banking is a unique model developed by 'Quippo' which allows equipment owners to generate income even from their idle and surplus equipment.

Quippo's equipment bank enables different construction companies' project developers, EPC majors or even individual equipment owners to deposit their idle equipment with us which will be deployed on rent. This will not only generate revenue for idle equipment, but also take away the liabilities of storage and security.

Though the equipment is deposited in our bank, the depositors are the sole owner of the equipment at any point of time.

OEMs can avail this banking option by depositing their surplus equipment with us. This gives opportunity not only to generate revenue but to promote their existing/ newly launched products as well. They get a first hand performance report for their equipment and an added advantage of winning customer confidence. Quippo has already been catering this unique proposition to some of the niche clientele and gained substantial market confidence.

What is the current fleet size and what is the fleet addition programme?
Presently Quippo is managing around 1000 equipment across the country. Here we would like to reiterate that, equipment manufacturers are under an immense pressure to continuously upgrade their products in order to get a big market share. New products with advanced technologies are being launched on a regular basis. As a result, to cater to the market needs, rental players are also under pressure to upgrade their fleet composition. Therefore, for a rental player fleet addition and deletion is a continuous process of fleet updation whereby depending on the fleet age, usage, market demand and condition existing fleet is moved under disposal category and new fleets are added in the pipeline, keeping in view the market demand, utilization, viability and rental returns.

What are the value added services offered by the company?
Quippo's experience on multi terrain and multi discipline projects can always add value to the customers. Our extensive geographical exposure allows us to guide customer not only on the site conditions prevailing in any terrain but also assist them in choosing the right machines and applicability. Further as a holistic equipment service provider Quippo's service basket provides additional services like Equipment Banking, Fleet Management Services, Valuation of Equipment, Auctioning and Sale of Used Equipment, Equipment Training.

Above all, we give a choice to the Customer to handpick the choice of services that are best suited/ required by them.

How according to you will bC India 2013 help give an importance to the Indian construction equipment industry? Do you plan to introduce new services during the event?
Events like bC India 2013 are informative platforms for the equipment manufacturers, Equipment users and suppliers of spares and consumables to come on a single platform and understand, analyze, discuss debate and pick what is right/ usable to them. Quippo already has a basket full of services to offer to the various players in the construction arena. We believe in mastering the concept of various services we offer rather than placing a full basket of services with incomplete knowledge/ information.

Does bC India actually help you give your clients better idea?
We participated in bC India 2010 and also regularly feature in events like these and we majorly focus on spreading awareness of the rental and associated services so as to provide rental industry its due place and attention that it deserves.

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Tag Words: equipment banking, fleet management services, valuation of equipment

Categories: Construction

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