According to data compiled by the Department of Transport Management (DoTM), registration of vehicles under the Crane/Dozer/Truck category crossed the 3,000-mark three years ago and stayed above it. In fiscal year 2008/09, 3,594 vehicles were registered all over the country in the category. Five years ago the figure was just 1,592.
“During the conflict period, there were hardly any construction and development projects. However, the pace of construction and development projects sped up with the end of insurgency, creating a whole new demand for heavy equipment,” Rabindra Man Shrestha, the managing director of Continental Trading Enterprises, which deals in machinery from Komatsu, the second largest manufacturer of construction and mining equipment, says.
The biggest impetus has been the boom in the housing and real estate sector.
“However, the state-funded projects have slowed as the fiscal budget has not been approved yet. Construction of hydropower projects have mostly stalled, clogging up further rise in demand,” he adds.
Interestingly, the top buyers in the past two years are not large construction companies or contractors but stone crushers and small groups of people with small companies that buy two or three equipment and rent it out.
“Although there are a few larger players, the market has mostly fragmented into smaller players. These rental companies make up the biggest chunk of our customers,” Sushil Shrestha, deputy general manager (DGM), Continental Trading´s Business Development and Corporate Marketing division, told myrepublica.com.
The road has become such a necessity that locals are now pitching in with the finance to get a road link between their farms and the market, Sandip Chachan, DGM of Morang Auto Works (MAW), which sells equipment from British company JCB´s Indian subsidiary, says. “People now want a road no matter what. So the number of these small projects has increased.”
The next big demand for such machine comes from stone crushers and construction material manufacturers. “Lately a lot of stone crushers have sprung up in the Tarai region targeting mostly the Indian market,” Chachan, says. Chachan claims that the MAW´s market has been growing at an average rate of 100 percent annually in the last two years.
Though the construction of large development projects have not taken pace this year, construction of foreign-funded small projects like 20 to 40 kilometer roads and irrigation projects are still going on at a brisk pace.
“The future is in mechanization. Municipalities are no longer using laborers to stack garbage, construction material manufacturers are using machines, and the trend point towards efficient equipment as it conserves time,” Chachan says.
The boom in the sale of construction materials has also helped boost small players like Auto-Electro-Mech Pvt Ltd, which deals in Terex Vectra manufactured in India. Satyaram Dhakhwa of the firm told myrepublica.com that the company now sells eight to ten such equipment a month, up from two to four a month a few years ago.
A lot of new players have also sprung up in the business lately. According to Chachan, people now go shopping for dealerships from small companies in China, India and other countries to tap the boom. And if the hydropower projects and other huge development works take off, the future is even brighter, dealers agree.
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