Indian Material Handling Industry : Eying the future
If, as global industry soothsayers point out, industrialisation is set to post good growth over the coming years, there is every possibility that the material handling equipment industry will also take giant leaps ahead. According to a report published by Global Market Insights, the worldwide material handling equipment market size was over USD 110 billion in 2015 and growth is pegged at over 5 per cent CAGR estimation from 2016 to 2024. “Increasing penetration of advanced technologies, such as RFID, IoT, and voice picking, are expected to drive the material handling equipment market over the forecast time frame. The evolution in the technology to assist smooth warehouse and logistics operations in meeting customer demand is rapidly changing the business environment,” the report states.
India material handling equipment market share is anticipated to grow significantly from 2017 to 2024 due to an attractive economic landscape, and significant demand for goods movement. “The increase in manufacturing activities in the region will also augment sales. The need for safe working environments in industrial facilities, developments in areas such as wireless technologies, robotics, and flexible electronics will fuel the MEA material handling equipment market size. Furthermore, the expansion of various international firms in the region will drive demand,” the report predicts.
Growing automation capabilities in the manufacturing space will provide a fillip to the material handling equipment market size. Automation aids in reducing costs and delivering high-quality products. It eliminates the need for manpower to check-in, sort goods, or to move bins and totes containing materials. These automated systems scale up the operational needs and drive the business results by reducing errors, increasing pick rates, surging throughput and decreasing labour costs. For instance, automated guided vehicles (AGVs) are an automation solution for moving parts to and from the manufacturing facilities or conveying pallets for put-away in distribution centres. The logistics robotics market benefits from optimised work-flow procedures, high productivity levels and reduction of labour and operating costs.
India is expecting a CAGR of 10 per cent up to 2020 in the material handling sector. “A recent study reveals that the Indian MHE industry is expected to grow steadily. The improvement in the Indian economy will result in accelerated demand for goods movement and create opportunities for suppliers of goods handling products and services of all types. With the government’s ambitious ‘Make in India’ plan taking root, the industry is expecting to see good growth in manufacturing and consequently in logistics and distribution activities for the next few years,” the release states.
The need for MHE is directly related to the amount of cargo and freight traffic. With a wide production capacity base, India is perhaps the only developing country which is totally self-reliant in such highly sophisticated equipment. The total warehousing space requirement in India expected to grow at a CAGR of 9 per cent from 919 million sq. feet in 2014 to 1,439 million sq. feet by 2019. Manufacturing will continue to remain one of the biggest demand drivers of the warehousing sector with an annual requirement of 61 million sq. feet of incremental space between 2014 and 2019. With the government’s renewed focus on incentivising the manufacturing sector, the logistics market will reap the benefits in the coming years. As per industry experts, investment in warehouse can provide an opportunity of realising returns in the range of 12 per cent – 20 per cent per annum. Interestingly, Chennai is emerging as a key market for material handling equipment with a spurt in the number of warehouses and container freight stations in and around the city. This will, in turn, boost the demand for MHE like forklifts, pallet trucks, stackers, order pickers and reach trucks.
The growth, industry experts say, will come from the automotive industry. India is the world’s second-largest two-wheeler market, Asia’s third-largest passenger vehicle market, the world’s fifth-largest bus and truck market (by volume) and the world’s fourth-largest commercial vehicle markets. As such, cost competitiveness, increasing demand, easy financing schemes, new product offerings, infrastructure development and an enabling regulatory environment would be the key growth factors for the Indian MHE industry that is slated to grow in tune with the automotive and certain other sectors.