Godrej and Boyce, the flagship company of the Godrej Group, announced that its business Godrej RenTRUST is targeting a growth of 23% YoY in providing rental solutions for complex material handling needs. The business has surpassed the pre-pandemic level revenues and is growing steadily. Godrej RenTRUST is the only Indian rental solutions provider that manufactures and provides Indian origin material handling equipment to its clients, thereby encouraging the government’s push for self-reliance with its ‘vocal-for-local’ operation strategy. The current industry value is approximately ₹600-650 crore with an addressable market of ₹200-250 crore for the business.
This is against the backdrop of industries focusing on outsourcing complex and high-end material handling work. As the e-commerce sector in tier - 3 & 4 markets grows, so does the demand for warehousing equipment. Companies across industries, especially project-based firms, are moving towards renting equipment and outsourcing material handling requirements to expand their operations and focus on other core competencies. To address this need, Godrej RenTRUST has added more than 1,000 material handling equipment to its rental fleet. The business customises end-to-end rental solutions such as equipment and maintenance, skilled operators, administration and value-added solutions for their clients.
Commenting on this, Anil Lingayat, Executive VP and Business Head, Godrej Material Handling, says, “Today’s complex material handling environment requires industry expertise to increase productivity, optimise costs and deliver quick results for customers. Godrej RenTRUST has become a leading organised player owning 23% of the market share among rental players and offering a decade of experience to its clients in delivering rental solutions for their material handling requirements pan-India. Our mid-term goal for FY25 is to target about 2,500 material handling equipment in our rental fleet.”
Going forward, we look forward to partnering with Indian as well as global players to provide the best end-to-end material handling rental solutions,” he adds. Fuelled by the heavy reliance of companies on the rental industry for their seasonal demand, heavy loads and unexpected rise in their respective markets, the industry players offering rental solutions for material handling equipment have witnessed a major boom as the pandemic has hastened the process for essential services.
Material handling industry overview
According to a report published by Grand View Research, the global material handling equipment market size was valued at $26.3 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 7.4% from 2021 to 2028. Apart from the uncertainties created by the pandemic, favourable government initiatives are now supporting new infrastructure development worldwide, creating growth opportunities in the market for material handling equipment over the forecast period. Economies such as India, China and Southeast Asia are attracting foreign investments promoting infrastructure and industrial development, subsequently creating avenues for growth. The development of public infrastructure includes airports, rail networks, seaports and power plants, among others. Meanwhile, although the demand for industrial applications witnessed a minor setback in 2020, unprecedented growth in the e-commerce sector helped upkeep market growth through the pandemic. Healthy demand for delivery and distribution of grocery items amidst the lockdown came as a respite for market growth. In addition to the OEMs, the pandemic has driven several supply chains firms to explore tools that aid in making informed decisions with AI implementation to analyse large amounts of data they generate periodically.
A combination of data-driven insights and hindsight will help build a resilient supply chain supported by advances in equipment technology. The development of the One Belt One Route initiative by China, also known as the Belt & Road Initiative, is also expected to be lucrative for the materials handling equipment industry. The initiative to connect a network of rail and road routes from China to Europe via the Middle East will provide growth opportunities. Similarly other initiatives will bode well for the material handling equipment industry over the next few years. The 2021 Automation Solutions Survey Study stated that the pandemic triggered the demand for a fully automated solution in the manufacturing sector, with companies increasing investments in automated solutions over the next few years. Further, companies project to upgrade their conveyor and sorting systems in the next two years. However, due to the pandemic, several medium-sized businesses have altered plans to purchase or modernise new equipment. The industrial trucks segment dominated the market and accounted for the largest revenue share of over 30% in 2020 and is estimated to witness steady growth over the forecast period.
These trucks are a preferred choice due to their wide area of application in an industrial setting. Transport of heavy containers or crates in several end-use markets is undertaken using industrial trucks, thereby contributing to a larger market share. As logistic companies move towards adopting sustainable products, the demand for battery-operated trucks will gain traction over the forecast period. Although the pandemic hindered sales in 2020, the market may reach the pre-pandemic levels by the end of 2022, registering a CAGR exceeding 7% over the next seven years. The automated storage and retrieval system segment accounted for a significant revenue share of 28.2% in 2020. This growth is attributed to warehouses enforcing social distancing amid the pandemic. These systems were preferred during the period as they promoted efficiency and aligned with the social distancing norms. Over the forecast period, investments in automated equipment will increase, creating lucrative opportunities in the market for material handling equipment. The automated storage-retrieval systems segment is estimated to register CAGR exceeding 8 from 2021 to 2028, slightly higher than the global average.
Courtesy: Godrej RenTRUST