Joseph Cyril Bamford India Sees Revenues Flat

Joseph Cyril Bamford (JCB) India, the country’s leading construction equipment manufacturer, sees flat revenues this calendar year due to a slackening of growth in realty and a spurt in input costs.
Over the last four years, the company’s yearly growth has been at an average of 30%. JCB India’s topline increased from Rs 2,100 crore in 2006 to Rs 3,200 crore the next year.
But the firm doesn’t see its revenue growing this year, said Vipin Sondhi, managing director and chief executive, JCB India. “This is because of a combination of a slowdown in the real estate sector and a rise in costs of oil, steel and even in interest rates,” he added. Sondhi, however, added that despite the hike, steel is cheaper in India when compared with the global market.
“JCB will now source 70% more from India than it did earlier,” he said. One of JCB’s two plants in Pune is involved in manufacturing components, 50% of which is exported to the mother plant in the UK.
Asked when he expects the real estate sector to recover from the slump, Sondhi said that would depend on interest rates, which in turn depend on inflation. “I see a turnaround only in the first quarter of the next year,” he said. Sondhi, however, is bullish on the market here.
India is one of the most important markets for JCB as it contributed 24% to its global revenues in 2007. In addition to exporting components, JCB India exports finished equipment. “Last year, we exported 205 tracked excavators manufactured at our Pune plant to dealers in Southeast Asia,” said Sondhi.
JCB also manufactures, among other things, tractors and diesel engines. In India, the firm currently offers 14 products out of its global portfolio of 220.
JCB wants to develop indigenous products suited to Indian conditions but no concrete plans have been firmed up yet. Sondhi said, “Though the made-in-India brand is not exactly the strongest when it comes to heavy engineering, we hope to change that.”
Last year, JCB India invested Rs 800 crore in manufacturing and currently has three plants, two in Talegaon, Pune and one in Ballabgarh, Haryana.

One Comment

  1. Posted September 8, 2008 at 11:35 pm | Permalink

    Increasing interest rates and rising construction costs are changing the mood of many aspiring homebuyers, because of which real estate developers are changing their strategy to keep their business going. They are now switching either to so-called affordable housing projects or high-end customers, who mostly buy cash down or with limited amount of borrowing. Many developers are opting for low-cost housing – the latest to come on board is Bangalore-based Puravankara Projects, which is planning to build 65,500 low-cost flats in five southern cities over the next five years. Realty major, Omaxe is building 1 lakh houses across cities in northern India – the flats would be priced between Rs 1,000 and Rs 1,100 per square foot. “Most large developers have now woken up to the fact that affordable housing projects have the fastest absorption rates and are focusing on this,” said Mr. Anuj Puri, chairman of realty consultancy company, Jones Lang LaSalle Meghraj.For more view-

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