17.12.2007

ABG expands crane fleet

ABG Heavy Engineering of India, which recently announced it had purchase a 3,200 tonne capacity Terex Demag CC8800-1 Twin - is adding a further 40 cranes in the next three months to cater to the huge demand from the infrastructure sector. The group also plans to diversify into tower cranes and load stacker manufacturing after its first crawler crane debuts in the Indian market in July 2008.

Saket Agarwal, director, ABG Group, said the company currently has a fleet of 175 cranes in the range of 30 metric tonnes to 3,200 metric tonnes. "We had already placed orders for 40 more cranes and by the end of the fiscal year 2007-08 our fleet size will exceed 200 units," he said. The group has placed orders for a number of more cranes which it plans to add over the next two years but Agarwal did not disclose the numbers. He said the crane industry is cluttered and it is tough to estimate as to what is the growth rate of the crane business, or what is its total size. "It is totally need-based and we are growing with the demand," he said.

Agarwal, however, said the demand from sectors such as power and petroleum was very high and the industry is reeling under a huge backlog with a lead time of almost two years to procure a crane. "This is the reason why the company decided to diversify into crane manufacturing business and is planning to roll out several different kinds of crane from its manufacturing unit," he said.

The group will be manufacturing the cranes under its unlisted entity - ABG Cranes Ltd. He said US-based crane manufacturing Terex and two other foreign companies are interested in partnering with ABG Cranes Ltd. However, a decision in this regard will be taken in the three to four months, he said.

Agarwal said the company will roll out its first prototype of crawler crane by the end of May 2008. After which it will be subjected to rigorous testing procedures and once that is done, the company will start taking orders.

"After May 2008, it will take another two months before the marketing of the product starts. Once that is done, we will focus on manufacturing tower cranes and load stackers," he said. Tower cranes have huge demand in the country driven by the growth in the telecom, power transmission and wind energy sectors.

ABG has its manufacturing facility near Navi Mumbai where the company has acquired over 30 acres of land. For the crawler crane manufacturing facility, almost 25 per cent of the land has been used with a fabrication facility of 100 units per year. "Before we start manufacturing tower cranes and load stackers, fresh investments will have to be made at the plant," he said.

Agarwal said since nothing concrete has been decided, therefore it is tough to comment as to how much will the company be investing in the new plant for manufacturing the new products. He said the investments will be made over a period of six to eight months from now.