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JCB confident of revival

One of world’s largest construction equipment manufacturers, JCB India, is expecting a second straight year of decline in revenues this year but is confident that India will be the first market to spur a demand upturn by the end of this year, Sumant Banerji reports.

business Updated: Apr 07, 2009 23:12 IST
Sumant Banerji

One of world’s largest construction equipment manufacturers, JCB India, is expecting a second straight year of decline in revenues this year. But the company is confident that India will be the first market to spur a demand upturn by the end of this year.

“There has been an impact of the recession on us and our revenues have fallen from Rs 3,500 crore in 2007 to Rs 3,000 crore in 2008. This year too we expect a 15-20 per cent drop,” said Vipin Sondhi, managing director and CEO, JCB India.

“However, we are confident of a revival in the last quarter of 2009 and by first quarter of 2010, we would have turned the corner. There is a lot of thrust on infrastructure development and rural India will be the engines of our growth.”

JCB has an over 50 per cent marketshare in the domestic market, which is also its biggest market worldwide. The company has invested over Rs 850 crore towards expansion of its capacities in the last three years, none of which had been put off due to the downturn.

“We got the first indications of the slowdown back in April 2008, but that did not impact our expansion plans as infrastructure is an area which works in the long term,” Sondhi said. “We are braving the situation now but are prepared to take advantage when the upturn comes.”

The company recently doubled its capacity of backhoe loaders from 12,500 per annum to 25,000 per annum. The capacity will cater to the domestic market and exports as well.

“We have a cost advantage here in India vis a vis our other facilities in UK, US, China and Brazil and hence exports will be an important part of our future growth,” he added.

JCB exports backhoe loaders and other heavy line equipment to South East Asia and parts of Africa and intends to tap the Middle East market in future.