07 Oct Demand for Road Construction Equipment’s To See a Sharp Rise in the Coming Few Years
The largest road network in the world is in India, spanning approximately 6.00 million kilometres. Nearly 65% of all goods and 90% of passenger traffic uses this road network. Over the years, the increase in road transportation has increased the connectivity between the cities, towns, and villages.
Today focus is on the development of road infrastructure. In the last five years, from 2016-21, the country showed an increase of 17% CAGR. Inspite of the lockdown due to pandemics; the government built 13327 km of roads on national highways during 2020-21 at an average of 37 km per day.
Targets for Road Infrastructure
Projects like National Infrastructure Pipeline (NIP) for the period 2019-2025 are the first of their kind where the plan is to provide world-class infrastructure to citizens.
The target under NIP is to develop 7300+ projects with a total outlay of Rupees 111 lac crores by 2025. The road infrastructure sector is expected to account for 18% of the total capital expenditure from 2019-25.
The government of India wants to build around 200,000 kilometers of roads and complete it by 2022 end. The projection is that in the next five years, the National Highway Authority of India (NHAI) will earn around 1 lac crore from toll tax annually.
Market outlook for road construction equipment
Road construction equipment plays a vital role in the growth of infrastructure. The road is an essential part of the infrastructure as it helps to connect the geographical territories. For constructing roads, many types of machinery and equipment are required based on their functions and operational use. For example, the Asphalt mixing plant plays a crucial role in advancing and maintaining the roads we see today. The Asphalt mixing plant is where the Asphalt concrete/ coated roadstone is produced by mixing aggregates, minerals, sand, fillers, and binders in the correct proportion and temperature. The mixture is kept in hot condition at the time of application to the site.
The asphalt mixing plant can be set up at the construction site itself. If they are situated remotely, the asphalts can be transported in storage containers
The pandemic slowed down the construction projects and activities in FY 2020. Even a Road construction equipment manufacturer was affected by the slump. However, the road construction sector is again showing demands and picking up pace with the targets till 2022 first and 2025 later to be fulfilled by the government. The ambitious road construction project is expected to increase the sales of road construction equipment by at least 25% in 2021-22 and a further 16% in 2022-23. This augurs well for Asphalt mixing plants as more demand will be there for increased production capacity.
In the future, one can expect maximum demand for road construction equipment as we hope to see a lot of investment made in the roads and highways sector.