Ballabgarh, Haryana: Betting on rising demand from the second fastest growing major global economy, JCB India Ltd has expanded capacity at a backhoe manufacturing facility near New Delhi, making it the world’s largest.
Backhoe is an excavator with a bucket on the end of an arm, generally used in housing and highway projects.
The increase in capacity allows JCB India, a wholly owned unit of UK-based JC Bamford Excavators Ltd, to make as many as 100 backhoes a day, up from 50 previously, by investing Rs300 crore.
Betting big: JCB India chief executive officer Vipin Sondhi. Rajkumar / Mint
Last year, JCB India sold 12,000, or 75%, of the backhoes sold in the country. Present here since 1979, JCB makes up as much as one-fourth of the its parent’s revenue in 2008.
Matthew Taylor, chief executive, JC Bamford expects that to double in five to 10 years. The Indian unit is already the biggest construction equipment firm in the country.
JC Bamford is the world’s third largest maker of construction equipment behind US-based Caterpillar Inc. and Japan’s Komatsu Ltd, and had global revenues in 2007 of at least £2.25 billion (Rs16,492 crore now). Sales for 2008 were not immediately available.
Like all construction equipment makers, JCB India, too, has been hit by slowing construction growth. Sales shrunk by 20% in 2008 here and Vipin Sondhi, its India chief executive, expects it to fall by 15% in 2009.
East and central India are the only areas that have bucked the trend and seen a 20% increase in sales, he added.
JCB believes construction spending will rise significantly once the elections are over, as all political parties list infrastructure as a priority.
In the last three years, it has invested Rs550 crore at two facilities in Pune that make products such as excavators, soil compactors and loaders.
JCB is also looking to develop India as an export base for components and finished products. Exports to Africa, eastern Europe and Russia now account for a little under 10% of revenues of its unit here.