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7/29/2019 Construction Matl Bldg Hardware
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Construction Materials andBuilding HardwareSector (2022)
A Report
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Disclaimer for the Skill Gap Report:
NSDC engaged IMaCS (ICRA Management Consulting Services Limited) to prepare this report, which is based on independent researchand analysis done by IMaCS. This report is not based or derived from any other report or research paper. Any similarity with any otherpaper may purely be a co-incidence.
All rights reserved. All copyright in this report and related works is solely and exclusively owned by NSDC. The same may not bereproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether ornot transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party exceptwith the written approval of NSDC.
This report is for information purposes only. While due care has been taken during the compilation of this report to ensure that the information is accurate to the best of IMaCSs andNSDCs knowledge and belief, the content is no t to be construed in any manner whatsoever as a substitute for professional advice.
IMaCS and NSDC neither recommend nor endorse any specific products or services that may have been mentioned in this report and nor do they assume any liability or responsibi lityfor the outcome of decisions taken as a result of any reliance placed in this report.
Neither IMaCS nor NSDC shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidancetaken from any portion of this report.
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Human Resource and Skill
Requirements in the
Construction Materials
and
Building Hardware Sector
Study on mapping of human resource skill gaps in
India till 2022
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Human Resource and Skill Requirements in the Construction Materials and Building Hardware Sector
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Table of Contents
1. Environment Scanning and Competitiveness of Construction Materials and BuildingHardware sector .................................................................................................................................... 5
1.1. Overview of Construction Materials and Building Hardware ................................................ 51.2. Cement .................................................................................................................................... 61.3. Steel....................................................................................................................................... 121.4. Construction Equipment ....................................................................................................... 141.5. Demand Drivers of Construction Materials and Building Hardware Industry ..................... 171.6. Key Success Factors and Risk Factors .................................................................................. 181.7. Outlook for Construction Materials and Building Hardware Industry ................................. 21
2. Human Resource and Skill Requirements in the Construction Materials and BuildingHardware Sector ................................................................................................................................. 23
2.1. Current Employment in the Construction Materials and Building Hardware Sector in India23
2.2. Major Regions of Employment Concentration ..................................................................... 242.3. Functional Distribution of Human Resources in the Construction Materials and BuildingHardware Sector ................................................................................................................................ 272.4. Distribution of Human Resources by Education Levels in the Construction Materials andBuilding Hardware Sector ................................................................................................................. 292.5. Skill Requirements and Skill Gaps in the Construction Equipment Segment ...................... 312.6. Skill Requirements and Skill Gaps in the Cement Segment ................................................. 382.7. Skill Requirements and Skill Gaps in the Steel Segment ..................................................... 472.8. Emerging Trends in Skill Requirements ............................................................................... 552.9. Projected Human Resource Requirements in the Construction Materials and BuildingHardware Sector ................................................................................................................................ 582.10. Skill Pyramid .................................................................................................................... 612.11. Focus Areas for Skill Building .......................................................................................... 62
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List of Figures
Figure 1: Cement production in India (in Million Tonnes) ..................................................................... 7Figure 2: Domestic cement consumption in India (in Million Tonnes) .................................................. 7Figure 3: Installed capacity in India (in MT) and Capacity utilisation (%) ............................................ 8Figure 4: Production Share of Different Types of Cement for 2007-08 (in %) ...................................... 9Figure 5: Cement exports (in MT) and Export share in total production (%) ......................................... 9Figure 6: Region-wise production of Cement 2007-08 ...................................................................... 10Figure 7: End Usage Pattern for Cement .............................................................................................. 10Figure 8: Value chain for the cement industry ...................................................................................... 11Figure 9: Steel production in India (in MT) and share of world production (%) .................................. 12Figure 10: Apparent consumption of finished steel in India (in MT) ................................................... 13Figure 11: Consumption pattern by end-user industries, 2008-09 ........................................................ 13Figure 12: Share of the ECE Segments ................................................................................................. 16Figure 13: Method of equipment procurement ..................................................................................... 16Figure 14: Coverage in the Steel Segment ............................................................................................ 24Figure 15: Zone-wise distribution of personnel employed in the Cement Segment ............................. 25Figure 16: State-wise distribution of personnel employed in the Cement Segment ............................. 25Figure 17: Zone-wise distribution of personnel employed in the Steel Segment ................................. 26Figure 18: State-wise distribution of personnel employed in the Steel Segment .................................. 26Figure 19: Profile of people employed in the Construction Equipment Segment ................................ 31Figure 20: Profile of people employed in the Cement Segment ........................................................... 38Figure 21: Profile of people employed in the Steel Segment (Manufacture of finished products) ....... 47Figure 22: Skill Pyramid for the Construction Materials and Building Hardware Industry ................. 61
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List of Tables
Table 1: Investment in Roads, Rail, Civil Aviation, Marine Transport, Power Generation, Water
Supply & Irrigation etc. ........................................................................................................................ 21Table 2: Additional requirement of resources for execution of Planned Infrastructure Construction .. 21Table 3: Employment in Construction Materials and building Hardware - 2008 ................................. 23Table 4: Functional distribution of human resources in the Construction Equipment Segment ........... 27Table 5: Functional distribution of human resources in the Cement Segment ..................................... 28Table 6: Functional distribution of human resources in the Steel Segment (Manufacture of finished
products) ............................................................................................................................................... 28Table 7: Educational qualifications of personnel employed in the Construction Equipment Segment 29Table 8: Educational qualifications of personnel employed in the Steel Segment (Finished Products)
.............................................................................................................................................................. 30Table 9: Skill requirements and skill gaps in the Construction Equipment Segment ........................... 31Table 10: Skill requirements and skill gaps in the Cement Segment .................................................... 39Table 11: Skill requirements and skill gaps in the Steel Segment (Manufacture of finished products) 47Table 12: Projected Size of Construction Materials and Building Hardware Industry ......................... 58Table 13: Projected human resource requirements (in 000s) .............................................................. 58Table 14: Incremental human resource requirement in the Cement sector till 2022 Function-wise (in
000s) .................................................................................................................................................... 59Table 15: Incremental human resource requirement in the Steel sector till 2022 Function-wise (in
000s) .................................................................................................................................................... 59Table 16: Incremental human resource requirement in the Construction Equipment sector till 2022
Function-wise (in 000s) ....................................................................................................................... 60Table 17: Incremental human resource requirement in the Construction Materials and Building
Hardware sector till 2022 Function-wise (in 000s) .......................................................................... 60Table 18: Focus areas for Skill Building .............................................................................................. 62
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1.Environment Scanning and Competitiveness of ConstructionMaterials and Building Hardware sector
1.1.Overview of Construction Materials and Building HardwareConstruction investment accounts for nearly 52.4% of the Gross Fixed Capital Formation.
Investments in construction have a positive domino effect on supplier industries, thereby contributing
immensely to economic development.. Construction materials and equipment sector accounts for
approximately 8.6% of Indias GDP1and accounts for nearly two-third of the total construction
costs on an average. The share of construction materials in project costs ranges from 40-60% and the
corresponding cost for construction equipment ranges from 5 to 25%. Construction component
comprises nearly 60-80% of project cost of infrastructure projects like roads, housing etc. In projectslike power plants, industrial plants, etc. the share, though lower, is critical. Construction materials and
equipment sector comprises of various sub-industries such as:
Cement Steel Construction equipment Paints & Chemicals Petroleum products and resins Fixtures and fittings (including electrical wiring) Aggregates such as concrete and asphalt Timber Tiles and ceramics Aluminium, Glass & Plastics
Since most of the materials are either manufactured locally, in cottage or small scale industry, data
available for quantifying the exact nature of linkages with construction is not very accurate. On the
other hand, linkages of products such as paints and petro-products would again be difficult due to
their stronger linkages with other sectors. Whereas in case of cement and steel, almost 100% of
cement production is consumed in construction and about 40 - 60% of steel production goes into
construction. Thus in this report we will focus on only three major categories of construction material
and equipment industry, i.e. cement, steel, and construction equipment.
1 Planning Commission Working Group report on Construction for the 11th Five Year Plan
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1.2.CementCement is a basic construction material with virtually no substitutes; thus, the growth in the
construction industry has a direct relation with the production and consumption of cement. Currently
India is the world's second largest producer of cement after China with an installed capacity of over
200 million tonnes (MT). The cement industry accounts for approximately 1.2% of gross domestic
product (GDP) and is a significant contributor to the revenue collected by both the central and state
governments through excise and sales taxes.
The structure of the Indian cement industry is highly fragmented, which is a result of the low entry
barriers in the post de-control period and the ready availability of technology. However, cement plants
are capital intensive and require a capital investment of over Rs. 5,000-5,500 per tonne (t) of cement,
which translates into an investment of Rs. 5 billion for a 1 MTPA greenfield plant2. In the last few
years the industry has witnessed a number of mergers & acquisitions as a result the concentration at
the top is increasing. This concentration is mainly on account of the focus of the larger and the more
efficient units to consolidate their operations by restructuring their business and taking over relatively
weaker units.
The relative market share of large players in the cement industry has changed significantly over the
years. Consolidation of capacities has seen UltraTech, Grasim, India Cement and Gujarat Ambuja
(renamed as Ambuja Cements) emerge as the leading players apart from ACC, which has been the
market leader during the last several years. All the players have resorted to a combination of capacity
expansions as well as takeover of existing capacities for growth.
Indias cement production increased to 181.4 MT in 2008-09 compared to 168.32 MT during 2007-
08. The cement production has increased at a CAGR of 8.3% over the last ten years (1999-2009). The
compounded annual growth rate in production has been particularly high during the last five years
(9.2%) reflecting robust demand from the construction sector and high exports. However, the year on
year growth of 7.8% in 2008-09 was lower than 8.1% of 2007-08 and 9.8% of 2006-07. This
slowdown in growth during 2008-09 can be attributed to sharply lower exports to Iraq, and lower
consumption growth in some major marketsUttar Pradesh (UP), West Bengal (WB), Punjab, and
Kerala.
2 IMaCS Research & Analytics estimate
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Figure 1: Cement production in India (in Million Tonnes)
Source: IMaCS Research & Analytics compilation
The domestic cement consumption in India since 1999 is shown in the figure below. The
consumption has increased to 177.8 MT in 2008-09 at CAGR of 8.7% since 1999.
Figure 2: Domestic cement consumption in India (in Million Tonnes)
Source: IMaCS Research & Analytics compilation
The increased growth in cement consumption over the last few years has had a positive impact of the
capacity utilisation of cement producers. Capacity utilisation increased from 81% in 2003-04 to 94%
in 2006-07, and to 96% in 2007-08. However, capacity utilisation has declined in 2008-09 because of
significant additions in capacity during the year and a slowdown in demand
8294 94 102
111 118128
142156
168181
0
20
40
60
80
100
120
140
160
180
200
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
7788 90
99 108114 123
136149
164178
0
20
40
60
80
100
120
140
160
180
200
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
CAGR
8.3%
CAGR
8.7%
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Figure 3: Installed capacity in India (in MT) and Capacity utilisation (%)
Source: IMaCS Research & Analytics compilation
Indian cement production can be divided in four major categories:
Ordinary Portland Cement (OPC) comprises 95% clinker with the balance 5% comprisinggypsum and other materials
Portland Pozzolana Cement (PPC) comprises 80% clinker, 15% pozzolona, and 5%gypsum.
Portland Blast Furnace Slag (PBFS) comprises 45% clinker, 50% blast furnace slag, 5%gypsum
Others includes all other special categories such as sulphate resistant, IRST-40, etc.In FY2008, about 25.5% of the cement production during was Ordinary Portland Cement (OPC),
66.1% was Portland Pozzolana Cement (PPC), 8.1% was Portland Blast Furnace Slag Cement
(PBFS), and the remaining 0.4% was other special cements.
105 111121
135 140 144151 157
166 176
205
78% 85% 77% 76%80% 81% 84%
90%94% 96%
88%
0%
20%
40%
60%
80%
100%
120%
0
50
100
150
200
250
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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Figure 4: Production Share of Different Types of Cement for 2007-08 (in %)
Source: IMaCS Research & Analytics compilation
Figure 5: Cement exports (in MT) and Export share in total production (%)
Source: IMaCS Research & Analytics compilation, KSL Cement sector update May09
The Indian cement industry exported around 3.2 MT of cement during 2008-09, accounting for
around 1.8% of total production. As a result of increased overseas demand, cement exports increased
from 4.1 MT in 2004-05 to 6.0 MT during 2005-06. In 2006-07 exports declined marginally to 5.9
MT. However, as a result of higher growth in domestic demand coupled with sharp decline in exports
to Iraq cement exports have declined sharply during 2007-08 and 2008-09 to 3.7 MT and 3.2 MT
respectively.
PPC, 66.1%
OPC, 25.5%
PBFC, 8.1%
Others, 0.4%
3.2 3.4 3.5 3.44.1
6.0 5.9
3.73.2
3.4% 3.3% 3.1%2.9%
3.2%
4.2%
3.8%
2.2%
1.8%
0%
1%
1%
2%
2%
3%
3%
4%
4%
5%
-
1
2
3
4
5
6
7
2001 2002 2003 2004 2005 2006 2007 2008 2009
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In terms of regional concentration, the Southern region accounted for 32% of the total production
during 2007-08. Rajasthan alone accounted for 15.3% of the industrys production. The other States
with production concentration are AP (14.8%), MP (11.7%), TN (10.6%), Gujarat (9.1%),
Maharashtra (7.9%), and Karnataka (6.4%). These seven States together account for 76% of the
industry production in 2007-08.
Figure 6: Region-wise production of Cement 2007-08
Source: IMaCS Research & Analytics compilation
Figure 7: End Usage Pattern for Cement
Source: IMaCS Research & Analytics compilation
The value chain for the cement industry is provided in the following figure:
North, 22%
East, 14%
South, 32%
West, 17%
Central, 15%
Housing -50%
Infrastructure - 25%
Industrial /Commercial
- 25%
TotalCement
Production-100%
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Figure 8: Value chain for the cement industry
Source: IMaCS analysis; * Ready Mix Concrete
Indias annual per capita cement production of 0.15 tonnes in 2007-08 is significantly below the
world average of 0.4 tonnes and Chinas per capita production of 0.83 tonnes during 2006. Thus there
is significant potential of increase in cement consumption in India. It has also been observed that
cement consumption increases along with the rise in per capita income in developing countries.
Thereafter, once all the major developmental projects are in place and the country has a per capita
income comparable with that of the developed nations, the demand for cement stagnates/declines.
Accordingly, the per capita cement consumption also stagnates/declines.
Accordingly the installed capacity is expected to increase to 241 MT by 2009-103 from 205 MT in
2008-09. India's cement sector is expected to witness strong production and consumption growth of
9% during the medium-term in line with the economic growth because of the strong co-relation with
GDP growth and the increased activity in the construction sector.
3 IMaCS Research & Analytics
Processing
Cement
RMC*
Clinker
Mortar
As halt
Concrete
Cementitious
Materials
(Mineral
Components)
Others
(Sand, Gravel,
Stone, Recycled
Aggregates)
Sourcing Manufacture
Transactional
Channels
Selling
Direct Sales
Traders
Wholesalers
Retailers
End Users
Contractors Masons/ Self
BuildersCivil Engineers
Aggregates
Cement and
Allied
ApplicationsHousing
Commercial/
Industrial
Infrastructure
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1.3.SteelThe Indian steel industry ranks fifth in the world with crude steel production of 55.1 MT in calendar
year 2008 up from 19.3 MT in 1994. The steel production has grown at a CAGR of 7.8% over the
same time frame. The share of India in global crude steel production has increased from 2.7% in 1994
to 4.1% in 2008.
Figure 9: Steel production in India (in MT) and share of world production (%)
Source: World Steel Association, IMaCS analysis
The structure of the Indian steel industry comprises of primary producers, secondary producers and
small scale stand-alone processors, with an estimated installed capacity of 57 MTPA, comprising
primary producers (20.7 MTPA), secondary producers (11.5 MTPA), and others (24.6 MTPA).
During 2007, there were an estimated 970 induction furnaces (IFs) working in the country in the
secondary sector with the maximum located in Punjab (119 units), Uttar Pradesh (107), Maharashtra
(73), Gujarat (62), Orissa (57), and West Bengal (43). There are also an estimated 39 working EAFs
in the secondary sector.
The apparent consumption of finished steel in India has increased from 25.1 MT in 1999-2000 to 54.7
MT in 2008-09 at a CAGR of 9%.
2.7%2.9%
3.2%3.1% 3.0% 3.1%
3.2% 3.2% 3.2%3.3%
3.1%
4.0% 4.0% 3.9%4.1%
0%
1%
1%
2%
2%
3%
3%
4%
4%
5%
0
10
20
30
40
50
60
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
India's Production (MT)
Share of World Production (%)
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Figure 10: Apparent consumption of finished steel in India (in MT)
Source: IMaCS Research & Analytics compilation
As shown in the figure above, the high growth in steel consumption during 2005-08 was primarily
because of above-normal growth in capital formation in two end-user segments namely construction
and machinery and equipment.
The construction sector accounted for around 45% of Indias steel consumption during FY2008. Other
major user sectors include machinery manufacturing and engineering (30%), steel units (18%)
comprising CR/GP/GC and tube units, automotive (4%), and consumer durables (2%).
Figure 11: Consumption pattern by end-user industries, 2008-09
Source: IMaCS Research & Analytics compilation
0
10
20
30
40
50
60
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Construction,
45%
Machinery &Equipment, 30
%
Steel & TubeUnits, 18%
Automotive,4%
ConsumerDurables, 3
%
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Construction is already the largest single steel-consuming sector, accounting for around 45% of
Indias steel demand. The construction sector and, in particular, project construction (relating to
development of infrastructure) is a crucial demand driver for the steel industry. This is because, not
only does construction expenditure drives demand for long products, such as bars and structurals; but
also boosts demand for flat products via water supply works, sanitation, and irrigation projects.
Project construction also needs transport facilities from the selling depots to the sites, so that the
higher demand for trucks and trailers can also indirectly boost the demand for steel.
Nearly 71% of construction sector consumption is accounted for by long products, primarily bars and
rods (55% of total consumption, but also structurals (13%), plates (12%), and GP/GC sheets (8%). For
the machinery manufacturing and engineering sector, bars and rods account for 40-42% of
consumption, followed by HR coils/skelps/sheets (20%), plates (11%), and structurals (11%). Steel
units primarily consume HR coils/skelps/sheets for further processing into CR products. CR
coils/sheets may be further processed into GP/GC sheets.
It is estimated that the growth in India's steel consumption will primarily be fuelled by demand for
construction projects worth Rs 45-50 trillion4.
The scope for raising the total consumption of steel is huge, given that per capita finished steel
consumption is only 44 kg compared to approximately 180 kg across the world and 320 kg in China.
The National Steel Policy has a target for taking steel production up to 110 MT by 201920.
Nonetheless, with the current rate of ongoing greenfield and brownfield projects, the Ministry of Steel
has projected Indias steel capacity is expected to touch 124.06 MT by 201112. India's steel capacity
is likely to be 293 MT by 2020. An investment worth Rs. 8.8 trillion is likely to go into the steel
sector by 20205.
1.4.Construction EquipmentIndias earthmoving and construction equipment (ECE) industry has enjoyed strong growth over the
last few years as a result of rapid economic development in the country. The organised construction
sector in India (e.g., roads, urban infrastructure) accounts for approximately 55% of the ECE industry;
mining, irrigation and other infrastructure segments (e.g., power, railways) account for the rest. A
massive wave of additional investments is likely in each of these end-use demand segments, which
augurs well for the sustained and strong growth of the ECE industry in India.
4 Credit Suisse Group study on Indian steel sector5 Press Release, Ministry of Steel, Government of India
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As per the study6
conducted by the Confederation of Indian Industry (CII) and the Indian
Earthmoving, Construction Industry Association Ltd. (IECIAL), the ECE industry has the potential to
grow fivefold from US $ 2.3 billion in 2007 to approximately US $12 - 13 billion by 2015, growing at
a CAGR of 24%. The study also estimates that the growth up to US $ 8 billion by 2015 is achievable
through normal industry evolution. However, new sets of proactive initiatives are needed to achieve
the full potential of US $ 12 to US $ 13 billion. The Indian ECE industry is also highly fragmented
with the top 6 of around 200 domestic manufacturers contributing to 60% of output.
Major players in this segment in India are:
JC Bamford Excavators (India) Ltd Bharat Earth Movers Ltd L&T Case, L&T Komatsu Ingersoll-Rand (India) Ltd Tractors India Ltd Godrej and Boyce Manufacturing Company Ltd Telcon Escorts Construction Equipment Ltd Action Construction Equipment Ltd Voltas
The key segments that constitute the ECE industry and their share in the total industry are:
1) Concrete equipment Concrete breaker, Paver finisher, concrete batching plants, concretepumps, concrete mixers, hot mix plants
2) Material Handling equipment Telescopic handlers, crawler cranes, mobile cranes, truckcranes, forklifts, pick and carry cranes, slew cranes, tower cranes, conveyors
3) Material Preparation equipment Crushing plants, Jaw crushers4) Tunnelling and Drilling equipment Rotary/DTH drilling, Hammer Track drills, boring
equipment, demolition equipment
5) Road construction equipment Compaction equipment, vibratory rollers, pavers6) Construction vehicles dumpers, articulated haulers7) Earth Moving equipment backhoe loaders, excavators, loaders, bulldozers, skid steer
loaders, wheeled loaders, motor graders, motor scrappers, dump trucks, wheel dozers,
draglines
6 ECE Vision 2015: Scaling new heights in the Indian Earth Moving and Construction Equipment Industry
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The share of these segments in the total industry is provided below:
Figure 12: Share of the ECE Segments
Source: IBEF
Earthmoving equipments constitute the biggest segment and excavators the largest product line within
the segment. The excavator market is estimated at US $ 1.4 billion. This sub segment has been
growing at a CAGR of 30% driven by the 22-60 tonne excavators. In the Earthmoving equipment
segment, excavators contribute 70% of the market, backhoes account for 6%, loaders to 15% and
other equipment to 9%.
There are three popular methods of procuring equipments as depicted in the figure below. Amongst
the three leasing is the most popular in India. Buying involves huge upfront payments and is thus
unpopular whereas equipment rental business is small in India compared to global standards,
accounting for about 7-8% of the construction equipment industry.
Figure 13: Method of equipment procurement
Earth movingequipment,
57%
Tunelling anddrilling for
mining,5%
Concreteequipment,
12%
Materialpreparation,
7%
Roadconstructionequipment,
6%
Materialhandling,
13%
EquipmentProcurement
Buying
Leasing
Renting
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Human Resource and Skill Requirements in the Construction Materials and Building Hardware Sector
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The recent slwodown in the infratsructure and real estate sectors due to the gobal financial crisis has
directly impacted the construction equipment business. Stalling of projects and lack of project finance
has led to a decline in the demand for the construction equipment. As a result, major equipment
manufaturers are cutting production. The buying and leasing segments have also got impacted. Since
buying involves large upfront payments, new purchases have slumped due to lack of funds.
Equipment sales have gone down by 18 to 25%7. While equipment already leased out has remained
unaffected, the decline in the number of new projects has led to a significant fall in new leasing
contracts.
1.5.Demand Drivers of Construction Materials and Building HardwareIndustry
Government initiatives in the infrastructure sector, coupled with the housing sector boom and urban
development, continue being the main drivers of growth for the Indian construction materials and
building hardware industry.
Revival of individual housing demand Following are some of the primary drivers ofindividual housing demand
Efforts by the government to boost the demand for houses in the below Rs 20-lakhcategory in stimulus packages
Cooling-off of land prices and steel prices Increase in minimum support price (MSP) (wheat's MSP has risen to Rs 1,080 per
quintal in 2008-09 from Rs 750 per quintal in 2006- 07 while the figure for rice in the
corresponding period has jumped to Rs 850 per quintal from Rs 580 per quintal),
Increase in pay for workers under the flagship rural job guarantee scheme Implementation of debt waiver scheme Implementation of the Sixth Pay Commission
Huge infrastructure investment planned for Eleventh Five Year Plan (2007-12) amounting toRs. 20,561 billion is also expected to drive the demand for construction material and building
hardware.
7 Indian Infrastructure, Volume 11, No 6, January 2009
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1.6.Key Success Factors and Risk Factors1.6.1. Cement Industry
1.6.1.1.
Key Success Factors
Continuous technological upgrading and assimilation of latest technology - Presently, 93%of the total capacity in the industry is based on modern and environment-friendly dry process
technology and only 7% of the capacity is based on (old) wet and semi-dry process
technology. There is tremendous scope for waste heat recovery in cement plants.
Wide range of products - India is producing different varieties of cement such as OrdinaryPortland Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag
Cement (PBFC), Oil Well Cement, Rapid Hardening Portland Cement, etc. Production ofthese varieties of cement conform to the BIS Specifications. Between April to November
2008, 25% of all cement produced was OPC, 67% was PPC and 8% was PBFC.
1.6.1.2. Key Risk Factors High Transportation Cost is affecting the competitiveness of the cement industry. Freight
accounts for 17% of the production cost. Road is the preferred mode for transportation for
distances less than 250 km. However, industry is heavily dependent on roads for longer
distances too as the railway infrastructure is not adequate.
Cement industry is highly capital intensive industry and nearly 55-60% of the inputs arecontrolled by the government.
There is regional imbalance in the distribution of cement industry. Limestone availability inpockets has led to uneven capacity additions.
Coal availability and quality.
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1.6.2. Steel Industry1.6.2.1. Key Success Factors
Level of integration and captive facilities: Integration and captive resources are the need ofthe hour in steel industry. Wide disparities in costs have emerged between integrated players
with their own raw material sources and those that purchase from outside sources
Product Mix: Higher realisations and margins are associated with Flat products (especiallyCR products). Accordingly, there is an increasing share of value added products in the
product mix of the leading players
Branding: Branding has started playing an important role in the steel business. Not only doesbranding enhance customer acceptance and loyalty, it also allows steel companies to charge a
premium on branded steel. In the construction and general engineering segments, efforts have
been made to innovate and improve product quality, develop premium brands and provide
technical support to enhance the value experience of the customers
Cost Competitiveness: Steel is a commodity business with significant volatility in prices.Also, globally it is a relatively low margin business. Accordingly, it is important for players
to be cost competitive so as to be in a position to withstand all phases of the steel cycle.
Sources of cost competitiveness include: abundant, superior, and low cost access to iron ore,
access to low cost coking coal, operational and process cost control measures, and proximity
to major importing countries in South-East Asia
Location of Steel Plant:For steel projects, proximity to sources of raw materials is a criticalfactor in plant location, since each tonne of steel produced requires around 4 tonnes of raw
material to be transported
Marketing Alliances: Tie-ups with bulk consumers (such as automobile Original EquipmentManufacturers) mitigates demand risk and accordingly ensures product off take and high level
of capacity utilisations.
1.6.2.2. Key Risk Factors Availability of raw materials and other inputs: The iron ore resources in the country are
depleting, compounded by the rapid growth of exports. High grade coking coal needed by the
industry is in short supply leading to hardening of prices globally. Although non-coking coal
reserves in the country are adequate, the production of the raw material is constrained by low
investment.
Price volatility: Price volatility of raw material as well as final output is a major risk affectingsteel industry
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Cooling-off of demand: International demand for steel has taken a hit due to several factorssuch as global meltdown, increasing steel prices, etc.
1.6.1. Construction Equipment1.6.1.1. Key Success Factors
Ability to introduce India specific products that include low-priced multipurpose equipmentto attract new customers and to increase mechanisation in important areas adding features to
products that make suitable for use in India and launching new applications and products for
missing applications
Ability to capture exports opportunities in areas such as engineering and design services thatleverage the India's technical prowess
Quality, delivery and pricing of after-sales service Ability to provide end-to-end services including equipment selection, financing, maintenance,
training and repairs
Introduction of newer services such as rentals and financings to catalyse latent demandparticularly from rural areas and small towns
Strengthening of dealer and channel network to address buyer fragmentation following thetrend of sub-contracting and geographic expansion of demand
1.6.1.2. Key Risk Factors Competition from low-cost producers: The success of products from other low cost producers
in a number of other sectors in India and the success of imported Chinese wheeled loaders in
the domestic market (market share of 12% already) indicate the risk of possible share loss for
uncompetitive domestic manufacturers
Tax burden and anomalies: India has one of the highest indirect taxes on constructionequipment
Dependence on import for certain critical components Volatility of steel prices impacting production costs
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1.7.Outlook for Construction Materials and Building Hardware IndustryThe Planning Commission Report of the Working Group on Construction for the 11 th Five
Year Plan (2007-12) lists the following identified planned expenditure and the effect on the
various sub-segments of the construction materials and building hardware industry.
Table 1: Investment in Roads, Rail, Civil Aviation, Marine Transport, Power Generation, Water
Supply & Irrigation etc.8
S. No. Category Amount (Rs. crore)
1 Private investment in Roads 34,000
2 Express way development (Modernisation /
Upgrading of Highways) 220,000
3 Railways (Public) 180,000
4 Railways (Private) 120,000
5 Civil Aviation 40,000
6 Ports (Private) 50,000
7 Freight Corridor 22,000
8 Power Generation 420,000
9 JNNURM 60,000
10 Housing 150,000
11 Others 160,000
12 Total 14,56,000
Source: Planning Commission Working Group Report on Construction for the 11th Five Year Plan
A gross estimate of the requirements of resources based on the above investment requirement is
presented below:
Table 2: Additional requirement of resources for execution of Planned Infrastructure Construction
S. No. Category Details1 Total Investment Rs. 14,56,000 crore
2 Moderating Factor (weighted average for
the construction industry) 62%
3 Effective additional investment in
construction Rs. 900,000 Cr
4 Monetary requirements :-
8 This is only partial list and does not account for other sectoral work specially from Private Sector (Industry andothers)
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S. No. Category Details
4.a Construction material Rs. 495,000 Cr
4.b Construction equipment Rs. 180,000 Cr
4.c Manpower Rs. 108,000 Cr
5 Detailed requirements:-
5.a Materials (major)
5.a.(i) Cement 381 million tonnes
5.a.(ii) Steel 150 million tonnes
5.b Manpower 92 million man years
5.b.(i) Engineers 3.72 million man years
5.b.(ii) Technicians 4.32 million man years
5.b.(iii) Support staff 3.65 million man years5.b.(iv) Skilled workers 23.35 million man years
5.b.(v) Unskilled/semiskilled workers 56.96 million man years
Source: Planning Commission Working Group Report on Construction for the 11th Five Year Plan
These resources would be required under the 11th Five Year Plan for the above mentioned
investments. It is, therefore essential, that necessary measures be taken to prepare the industry to meet
this challenge.
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2.Human Resource and Skill Requirements in the ConstructionMaterials and Building Hardware Sector
2.1. Current Employment in the Construction Materials and BuildingHardware Sector in India
As described earlier, the three major constituents of the Construction Materials and Building
Hardware Sector are the segments of cement, steel and construction equipment. Of these, the steel
segment employs the maximum proportion of people, followed by the cement segment and then the
construction equipment segment.
The total employment across these three sectors is as follows:
Table 3: Employment in Construction Materials and building Hardware - 2008
Sector Employment (in million) % of Total
Cement 0.14 12%
Steel 0.50 44%
Construction Equipment 0.50 44%
Total 1.14 100%
Source: Cement Manufacturers Association of India, ASI, IMaCS analysis
Note:
While the steel sector employment above indicates the employment across all constituents of the steel
value chain, we are concerned with the manufacture of finished products such as plates, bars and rods
that are ultimately used in construction activities. Thus the sections below will focus on employment
in the manufacturing / processing of finished products and not on the manufacture of liquid steel.
Thus, the part of the value chain covered by us in the Steel Segment is as shown in the following
figure:
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Figure 14: Coverage in the Steel Segment
2.2. Major Regions of Employment ConcentrationThe zone-wise and State-wise distribution of personnel employed in the Cement and the Steel
segments is analysed below.
As regards the Cement Segment, it is seen that production (and thus the employment) is concentratedin the West and the South zone; these zones together account for about 65% of the total cement
production of the country, and would thus employ personnel in the same proportion. The zone-wise
distribution9 is as follows:
9 The zones are defined as:North: Jammu & Kashmir, Punjab, Haryana, Himachal Pradesh, Uttar Pradesh, Uttarakhand, DelhiSouth: Tamil Nadu, Andhra Pradesh, Kerala, KarnatakaEast: Bihar, Jharkhand, Orissa, West Bengal, SikkimWest: Maharashtra, Gujarat, Goa, RajasthanCentral: Madhya Pradesh, Chhattisgarh
North East: Assam, Mizoram, Manipur, Meghalaya, Tripura, Arunachal Pradesh, Nagaland
MiningRaw
MaterialProcessing
Manufactureof Iron
Manufactureof Liquid
Steel
Casting formanufacture
of semi-finished
products(billets, bloo
ms, etc.)
Hot rollingfor
manufactureof finishedproducts
(flat / roundsteel
products)
Cold rollingfor products
such ascoated /paintedsheets /
coils/ strips
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Human
As rega
Rajasth
total ce
follows:
esource and
Figure 15
ds the distri
n, Andhra
ent produc
Figure 16
Ce1
K
Chh
Himac
Skill Require
Zone-wise
Source:
ution of pe
radesh, Ma
ion of the c
State-wise
Source:
tral%
Nort10
Maharashtra7.9%
arnataka6.4%
attisgarh5.9%
hal Pradesh3.6%
ents in the
distribution
IMaCS Rese
sonnel emp
hya Prades
untry, and t
distribution
IMaCS Rese
East7%
Gujarat9.1%
Others14.6%
onstruction
of personn
rch and Ana
loyed in the
and Tamil
us the emp
of personn
rch and Ana
Sou32
North1
Ta1
aterials and
l employed
ytics, IMaCS
Cement Seg
adu, toget
oyment. Th
l employed
ytics, IMaCS
th
East
Rajasth15.3
il Nadu0.6%
Building Har
n the Ceme
analysis
ment across
er account f
State-wise
n the Ceme
analysis
West32%
an
Andhra14.
Madhya Pra11.7%
dware Sector
Page
nt Segment
states, it is s
or over 50%
distribution
t Segment
Pradesh.8%
esh
25 of 63
een that
of the
is as
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Human
In the S
personn
As rega
Jharkha
employ
esource and
teel Segmen
el engaged i
Figure 1
rds the distr
d, West B
ent in the s
Figure 1
Ta
U
Skill Require
t, it is seen
the segme
7: Zone-wis
ibution of p
engal, Cha
egment. Th
8: State-wis
South
20.5%
North14.7%
Andhra Prad8.6%
Punjab4.8%
Gujarat4.5%
il Nadu.5%
arnataka3.4%
tar Pradesh2.8%
Maharasht2.3%
H2
ents in the
hat the East
t. The zone
distributio
Source: ASI
ersonnel em
tisgarh, an
State-wise
distributio
West11.5%
esh
ra
ryana.3%
Madhya Pr2.3%
onstruction
zone alone
wise distrib
of person
4-05 data, I
ployed in th
Orissa to
istribution
of person
No
Orissa11.4%
adesh
Others8.5%
aterials and
accounts for
tion is as f
el employe
aCS analysi
e Steel Seg
gether acco
s as follows
el employe
rth East0.8%
Jhar17.
C
Building Har
over 50%
llows:
in the Stee
ent across
nt for ov
:
in the Stee
E52
hand%
West
14.
attisgarh13.3%
dware Sector
Page
f the total n
Segment
states, it is
r 55% of
Segment
ast.5%
engal
%
26 of 63
mber of
seen that
the total
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2.3. Functional Distribution of Human Resources in the ConstructionMaterials and Building Hardware Sector
During our interaction with the industry as part of our Primary Research, we analysed the proportion
of workforce at various functional levels across the Construction Materials and Building Hardware
Sector. The inputs received from the industry, supplemented by analysis by IMaCS, are as presented
in the following sections.
2.3.1. Functional Distribution of Human Resources in the ConstructionEquipment Segment
As in other manufacturing companies, construction equipment companies engage most
personnel in the manufacturing / operations function, followed by personnel in the customer support
function.
The details are covered in the following table:
Table 4: Functional distribution of human resources in the Construction Equipment Segment
Function Distribution
Manufacturing / Operations 60-65%
Sales / Marketing 8-10%
Customer Support 10-15%
Research and Development 1-2%
Support functions (HR, Finance, etc.) 10-12%
Source: Primary Research and IMaCS analysis
2.3.2. Functional Distribution of Human Resources in the Cement SegmentMost personnel in the cement industry are engaged in the manufacturing / operations function,
followed by personnel in the mining and the R&D functions to an equal extent.
The details are covered in the following table:
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Table 5: Functional distribution of human resources in the Cement Segment
Function Distribution
Manufacturing / Operations10 60-70%
Mining 12-15%
Marketing / Sales 10-12%
Research and Development 2-3%
Support functions (HR, Finance, etc.) 6-8%
Source: Primary Research and IMaCS analysis
2.3.3. Functional Distribution of Human Resources in the Steel Segment(Manufacturing of finished products)
As indicated earlier, our focus for the Steel Segment is on the personnel employed in the casting and
hot rolling operations. Thus, the distribution of personnel engaged in these core operations of casting
and hot rolling (on the shop-floor) as well as the proportion of personnel engaged in the sales /
marketing of finished products is as below. Others in the table below includes personnel engaged in
all other operations at steel units, such as mining, raw material processing, iron manufacturing, liquidsteel manufacturing and cold rolling, across all functions (i.e. manufacturing, procurement, R&D,
support functions, etc.).
The details of functional distribution are as below:
Table 6: Functional distribution of human resources in the Steel Segment (Manufacture of
finished products)
Function Distribution
Production, QA, R&D11 40-45%
Technical Services / IndustrialEngineering
25-30%
Purchase, Logistics, Stores 10-12%
Support functions (HR, Finance, etc.) 12-15%
Source: Primary Research and IMaCS analysis
10 Includes personnel in cement plant construction as well as cement manufacturing11 Minimal number of R&D personnel
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2.4. Distribution of Human Resources by Education Levels in theConstruction Materials and Building Hardware Sector
As a part of our Primary Research, we also analysed the education-wise composition of personnel
employed in the Construction Materials and Building Hardware sector. The inputs received from the
industry, supplemented by analysis by IMaCS, are as presented in the following sections.
2.4.1. Distribution of human resources by education levels in the ConstructionEquipment Segment
Majority of the personnel employed in the Construction Equipment Segment have an engineering
background and are graduate engineers, diploma engineers or ITI-qualified. Personnel in the
manufacturing / operations function primarily need to have this background; also, personnel in thissector who are employed in the sales / marketing / customer support functions also need to technically
know and understand the product and thus need to have an engineering background.
The details are covered in the following table. This includes Operators of Construction Equipment,
apart from those engaged in shop-floor of Equipment Manufacturing.
Table 7: Educational qualifications of personnel employed in the Construction Equipment
Segment
Function Distribution
Ph. D / CA / MBA /MTech etc.
5-8%
Graduate Engineers 8-12%
Diploma Engineers 10-15%
ITI and other vocationalcourses
10-15%
Graduates
(BA/BSc/BCom/others) 5-8%
Workers/Operators (withqualification of 12thstandard and below) this includes Operators ofEquipment
40%-50%
Source: Primary Research and IMaCS analysis
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2.4.2. Distribution of human resources by education levels in the Steel Segment(Finished Products)
Majority of the personnel employed in the casting and hot rolling operations have an engineering
background and are graduate engineers, diploma engineers or ITIs. The segment also employs a
considerable proportion of personnel who have studied till 12th
or below, and these primarily
constitute the unskilled workforce in manufacturing.
The details are covered in the following table:
Table 8: Educational qualifications of personnel employed in the Steel Segment (Finished
Products)
Function Distribution
Ph. D / M Tech 1%
CA/MBA 1%
Graduate Engineers 10%-11%
Diploma Engineers 15%
ITI and other vocationalcourses
15%
Graduates
(BA/BSc/BCom/others)
3%-5%
Workers (12th standardand below)
50%-55%
Source: Primary Research and IMaCS analysis
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2.5. Skill Requirements and Skill Gaps in the Construction EquipmentSegment
2.5.1. Profile of people employedThe following figures illustrate the profile of people employed in the Construction Equipment
Segment across various categories.
Figure 19: Profile of people employed in the Construction Equipment Segment
Source: Primary Research and IMaCS analysis
2.5.2. Skill requirements and skill gapsThe following table presents the skill requirements and gaps across various functions and
hierarchical/reporting levels in the Construction Equipment Segment. The skills required as well as
the current skill gaps as similar to those in manufacturing setups in other industries such as the
automotive industry.
Table 9: Skill requirements and skill gaps in the Construction Equipment Segment
Function /
RoleLevel Skills required Skill gaps
Manufacturing
/ Operations
Shop in-
charge
Ability to keep abreast of thetrends in the real estate and
infrastructure construction space
Inadequate ability to keepcomplete track of changes
/ trends in the real estate /
ITI's / below 12th with /without experience; some
diploma engineers
Diploma engineers with3-4 years experience;
some graduate engineers
Graduate engineers / PostGraduate (PG) with 7 to 8
years experience; somediploma engineers with 10
to 12 years experience
Manager
Supervisor
Workmen Workmen
Supervisor
Workmen
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Function /
RoleLevel Skills required Skill gaps
that will correspondingly influence
the need for constructionequipment in India
Ability to keep abreast of globaltrends in the construction
equipment space for example, the
move towards integrated
construction equipment, ergonomic
construction equipment, etc.
Ability to ensure reliability ofconstruction equipment
manufactured
Ability to coordinate withcounterparts abroad, emulate
manufacturing best practices, and
help adapt the products
manufactured abroad to Indian
specifications
Ability to clearly communicatewith and ensure coordination
between various functions, such as
R&D, Sales, etc.
Ability to ensure high quality atminimum costs
Ability to understand variedcustomer needs and manufacture
products to suit these needs
accordingly
Ability to ensure a system-drivenapproach to manufacturing as
against a makeshift approach and
ensure that quality systems are in
place
infrastructure construction
space in IndiaInadequate ability to
liaison with the various
functions
Inadequate knowledgeacross all facets of the
companys business and
the financial/commercial
impact of their decisions
on the companys
business
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Function /
RoleLevel Skills required Skill gaps
Supervisor Ability to understand the varioussegments / product types within theconstruction equipment segment
(e.g. earth moving equipment,
material preparation equipment,
tunnelling & drilling equipment,
road construction equipment, etc.)
and guide workmen on product
lines accordingly
Ability to understand how theconstruction equipment will be
used on the field
Ability to support the manufactureof construction equipment by
performing manufacturing
engineering, process improvement,
production planning, purchasing,
and other technical functions
which are necessary for the team to
meet its customer needs
Ability to coordinate with suppliersfor outsourced components
Ability to be abreast of latestmanufacturing techniques and
quality tools such as six sigma,
kaizen, quality circles, JIT, TQM,
TPM etc. and actively participate
in the implementation of the same
on the shop-floor
Ability to allocate suitable work toworkmen based on their skill levels
Ability to ensure pre-emptivemaintenance and troubleshooting
Inadequate ability tomanufacture productskeeping the customer
requirements / end usage
requirements in mind
Inadequate interpersonalskills, leading to
inadequate ability to
resolve conflicts that may
arise between workmen
Inadequate understandingof quality concepts such
as Six Sigma, JIT, TQM,
Kaizen, 5-S
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Function /
RoleLevel Skills required Skill gaps
initiatives on the shop-floor to
minimise shop downtimeUnderstanding of latest production
techniques such as lean
manufacturing
Ability to ensure that dailyproduction line targets are met
Ability to manage the availableresources workmen, raw
materials, consumables, etc.
Ability to ensure productivity byemploying efficient processes and
maintaining coordination on line
Workman /
Operator
Knowledge, consciousness and theability to apply safety measures on
the shop-floor
Ability to carry out basic troubleshooting / autonomous
maintenance of machines in case
of breakdown
Ability to understand qualityconcepts and techniques being
followed by the company
Ability to maintain discipline at theshop floor, punctuality and regular
attendance at the workplace
Ability to work on more than oneproduction process
Ability to highlight aberrations indaily production processes
Basic literacy, analytical abilityand the ability to understand and
follow shop floor instructions
Insufficient understandingof discipline, industrial
rules, work related
procedures
Inadequate ability to carryout basic trouble shooting
of production machines in
case of breakdown
Inadequate understandingof the end-use of the
customer
Inadequate orientationtowards quality
production
Inadequate understandingof how the work being
done fits into the big
picture
Tendency to form unionsand disrupt regular
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Function /
RoleLevel Skills required Skill gaps
Ability to minimise wastage of rawmaterials and consumables,maximise production and
understand the corresponding
impact on cost, quality and time
Ability to adhere to requiredquality levels of production
Ability to understand and followinstructions from supervisors, shop
heads, plant head etc.
Ability to read and understandengineering drawings
Ability to conform to workschedules and complete the
assigned work on time
working
Sales /
Marketing
Senior
Sales
Executive
Ability to ensure availability ofequipment at the point of sales /
point of distribution for equipment
that is being imported and sold in
the Indian market
Ability to order machines in timefrom foreign counterparts based on
the delivery schedule to customers
in India and ensure delivery of the
ordered machines to customers
through dealers or directly
Ability to manage key accounts,such as corporate accounts,
Government accounts, etc.
Ability to drive rental/leasingagreements with customers
Ability to handle remarketing /refurbished equipment sales
Inadequate ability toliaison with counterparts
abroad and order
machines in time so as to
ensure availability of
equipment at the
customers end as per the
sales plan
Inadequate understandingof the Indian real estate /
infrastructure segments
that drive the need for
construction equipment
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Function /
RoleLevel Skills required Skill gaps
Ability to interact with dealers andresolve issues faced by them, ifany
Ability to drive sales in the areaand meet sales targets
Ability to coordinate training ofcustomers personnel on how to use
the construction equipment
Ability to coordinate withfinancing companies and facilitate
financing of the construction
equipment for the client
Ability to provide direction andleadership to junior sales
executives
Junior
Sales
Executive
Knowledge of the working ofvarious categories of construction
equipment being traded /
manufactured by the company
Ability to train contractors /developers, etc. for usage of the
construction equipment
Ability to regularly interact withdealers and highlight issues faced,
if any
Ability to understand overallcustomer requirements and how
these are being addressed by
product specifications
Ability to evaluate competitors andprovide competitive differentiation
i.e. the ability to compare own
products with competitors products
Inadequate ability to trackcompetitions moves
Tendency to try and sellindividual products and
not solutions to address
multiple needs
Inadequate ability to dealwith Government
procedures
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Function /
RoleLevel Skills required Skill gaps
and prove own products to be
superior and appropriate to theneeds of the contractor / developer
Good verbal and non-verbalcommunication skills to be able to
effectively communicate with
diverse agencies
Source: Primary Research and IMaCS analysis
2.5.3. Skills required in the ecosystem of Construction Equipment IndustryThe above table illustrated the skills required in the Construction Equipment Industry from an
equipment manufacturing perspective. Apart from the above, the following skills are in demand from
the perspective of the ecosystem in which the Construction Equipment Industry operates, primarily
driven by the Construction Industry:
Construction Equipment Operators users of Construction Equipment Construction Equipment Maintenance at on-site, servicing repairs and machinery After-sales support among dealers and suppliers.
Given the nature of operations, it is also required to build skills in the areas of Occupational Health
and Safety standards.
It is expected that the following skilled personnel will be in demand:
Crane operators Mobile crane operators
High-rise crane operators Hoist operators Dumper operators Fork lift truck operators Aerial Ropeway operators.
It should be noted that the above skill sets are over and above that of shop floor/equipment
manufacturing, and these skills are required to train users of Construction Equipment in
operation and maintenance.
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2.6. Skill Requirements and Skill Gaps in the Cement Segment2.6.1. Profile of people employed
The following figures illustrate the profile of people employed in the Cement Segment across variouscategories.
Figure 20: Profile of people employed in the Cement Segment
Source: Primary Research and IMaCS analysis
2.6.2. Skill requirements and skill gapsThe following table presents the skill requirements and gaps across various functions and
hierarchical/reporting levels in the Cement Segment.
ITIs / below 12th / with /without experience
Diploma engineers with 3-4yrs experience; PG orgraduates in in
geology, geochemistry,
industrial etc with 4-5 yrsexperience
Grad engg / PG's with 7-8yrs experience / diploma
engg with 10-12 yrsexperience / PG in
geology, geochemistry,
industrial etc with 7-8 yrsexperience
Manager
Supervisor
Workmen Workmen
Supervisor
Workmen
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Table 10: Skill requirements and skill gaps in the Cement Segment
Function /
RoleLevel Skills required Skill gaps
Mining Mines
manager /
Mine
Planning /
Mine
Development
Ability to lead the initiativesfor acquiring limestone blocks
e.g. preparation of necessary
applications, following up with
the relevant authorities,
obtaining all clearances and
permissions as may be
required, etc.
Ability to undertakeexploration and prepare
feasibility reports based on the
field study and confirmations
obtained by various methods
Ability to supply adequatequantity and appropriate
quality of limestone to the
plant within the budgeted cost
Ability to liaison withdepartments such as R&D and
production and all relevant
Government departments,
whenever required
Ability to be highly consciousof environment / safety norms
and requirements and enforce
the same
Ability to provide usefulfeedback on the performance
of construction equipment
procured for mining operations
Ability to allocate requiredpersonnel and machines such
Inadequate ability to liaisonand deal with Governmental
agencies
Inadequate ability to followup the status of applications
submitted
Inadequate ability tocoordinate / assign work to
junior mining engineers
Inadequate ability to liaisonwith the manufacturing /
operations department
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Function /
RoleLevel Skills required Skill gaps
as excavators, dumpers, pay
loaders, dozers, drills, rockbreakers, etc. in different
locations of mines
Ability to maintain allstatutory records as per mines
rules
Ability to allocate work tojunior mining engineers
Ability to undertake overallsupervision of the safety of
workmen, machines etc
Knowledge of the corporatemining lease process
Ability to plan drilling andblasting rounds to obtain
optimum blasts
Supervisor Ability to undertakeexploration in allocated blocks
Detailed knowledge of variousdrilling & blasting methods
Ability to understand minecharacteristic and mining
impact on the environment
Ability to be knowledgeableabout the latest mining
technology and machines
e.g. latest blasting techniques,
use of microprocessors for
fault detection, etc.
Ability to monitor groundvibrations due to blasting
Ability to understand
Inadequate ability tointerpret geological data
Statutory requirements statethe need for technically
qualified personnel to be
employed in this role but
such technically qualified
personnel do not have
adequate domain
knowledge or hands-on
experience in supervising
mine operations
Inadequate knowledge oflatest technological
innovations in India /
abroad
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Function /
RoleLevel Skills required Skill gaps
reclamation and rehabilitation
with respect to miningAbility to undertake
maintenance and planning of
material handling equipment
Inadequate ability to ensurediscipline and thus theimplementation of safety
norms at mines especially
for underground mines
Workman /
Operator
Ability to operate miningequipment Conventional
Mining Equipment/Specialised
Mining Equipment/Bucket
Wheel Excavators and ensure
highest levels of efficiency and
productivity of mining
equipment
Ability to follow safetyinstructions this is especially
critical for underground mines
which need higher safety to be
followed as compared to open
mines
Ability to be sensitive toenvironmental parameters such
as impact on the forest,
deforestation that may happen,
afforestation that is needed,
impact on the water level,
waste management, topsoil
management, reject handling,
dust control, etc.
Inadequate knowledge ofoperating mining
equipment, leading to
higher downtimes of such
highly expensive equipment
and thus lower returns on
investment on the
equipment
Inadequate sensitivity toenvironmental impacts of
mining
Ability to understand andrigorously follow safety
norms at mines
Manufacturing
/ Operations
Shop / plant
in-charge
Ability to identify use ofalternate materials / industrial
wastes / by-products in cement
manufacture
Ability to facilitate smooth
Inadequate ability to leadnew plant erection
initiatives / expansion
initiatives, leading to delays
in new plant erections
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Function /
RoleLevel Skills required Skill gaps
erection of new cement plants
as required and lead cementproduction initiatives
Ability to undertake erection /commissioning of equipment
in the plant and also handle
expansion related work
Ability to ensure availabilityand reliability of the plant to
meet production and cost
targets without compromising
on the health of capital
equipment employed
Ability to review the cementplants process water / run-off
plans and ensure compliance to
environmental requirements
Ability to select alternate fuelsand feed stocks
Ability to maintain properinventory records and ensure
optimum inventory levels in
the plant
Ability to work as a technicalfacilitator for vendors
Ability to convert theproduction plan into monthly-
weekly-daily production
schedule
Knowledge of commercialaspects of cement business
including obtaining required
raw materials
Inadequate ability to keeptrack of international trendsin the cement industry so as
to adopt best practices
Inadequate ability tocoordinate between
departments / functions
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Function /
RoleLevel Skills required Skill gaps
Proficiency in projectplanning, procurement,erection, commissioning of
plants, obtaining all clearances
and permissions, as may be
required
Supervisor Ability to work with increasinglevel of automation in the
cement manufacturing process
for example automated
sampling techniques, control
of manufacturing processes,
loading, unloading, spillages
from control rooms, etc.
Ability to identify and initiatevarious energy conservation
measures
Ability to oversee operation ofcontrols in the control room so
as to ensure the required
production
Ability to organize regularcalibration of all process
instruments and lab
instruments
Ability to maintain sensors,transducers, control panels and
keep them in operating
condition at all times
Ability to ensure proper andsafe storage of materials
Ability to work with cementprocesses, grinding and pyro
Inadequate ability tomanage workmen and
maintain discipline
Inadequate technicalknowledge, such as
knowledge of kiln
operations
Inadequate ability toundertake and ensure
preventive maintenance
Inadequate openness toworking with new
technologies
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Function /
RoleLevel Skills required Skill gaps
processing, kiln and mills
operation, process optimizationand refractory management
Ability to maintain variouselements of cement plants,
such as rotary kilns, mills,
pneumatic / hydraulic systems
etc.
Workman /
Operator
Knowledge of the chemicalprocesses in cement
manufacture
Ability to understand differentclinker production processes
Ability to operate controls inthe control room without error
and ensure the required
production
Knowledge of modern quality /process improvement practices
including working and
implementation knowledge of
TPM, Quality Circle, Kaizen
Activities etc.
Ability to handle all basicfunction of quality control
Ability to handle PLC systemsKnowledge of cement packing
processes and use of packing
machinery
Ability to undertake operationand maintenance of pollution
control equipment
Inadequate ability tounderstand the
technicalities of work being
done
Inadequate knowledge ofquality tools / latest
manufacturing techniques
Inadequate orientationtowards safety /
environmental protection
Inadequate ability topractice safety measures
when using equipment
Research and Senior design Ability to identify multiple Inadequate ability to
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Function /
RoleLevel Skills required Skill gaps
Development engineer means for energy conservation
and thus reducing energy costsAbility to bring about
innovations in production
methods so as to optimise
production costs
Ability to decide theproportions of limestone,
gypsum, flyash, etc. to be used
in the production process
based on the quality of the
input materials, so as to attain
the same quality of end
product
Ability to plan designing of themines by using latest software
packages
Ability to undertake technicaland market evaluations in
consultation with sales /
marketing personnel, to
determine the suitability of
resource recovery
opportunities available to the
cement plant
Ability to identify recyclingopportunities
Ability to undertake long termmine planning and designing
Ability to evaluate variousfuels for cement kilns
Ability to determine rawmaterials specifications and
identify diverse energy
conservation means andthus help reduce energy
costs
Inadequate ability tooptimize production
processes so as to optimize
costs
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Function /
RoleLevel Skills required Skill gaps
blending ratios
Junior design
engineer
Ability to understand impacton worker health and safety,
environment and conformance
to regulatory requirements
Ability to maintain lab / fieldtest reports, statistical records
and documentation of the
testing process
Ability to analyze metalemission data from cement
kilns and incinerators burning
hazardous waste
Ability to performcomprehensive laboratory tests
and field sampling, of cement
kiln dust and cement clinkerstored and generated at the
cement plant(s)
Inadequate orientationtowards safety and
environmental parameters
Inadequate ability tomaintain records
Source: Primary Research and IMaCS analysis
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2.7. Skill Requirements and Skill Gaps in the Steel Segment2.7.1. Profile of people employed
The following figures illustrate the profile of people employed in the Steel Segment across variouscategories.
Figure 21: Profile of people employed in the Steel Segment (Manufacture of finished products)
Source: Primary Research and IMaCS analysis
2.7.2. Skill requirements and skill gapsThe following table presents the skill requirements and gaps across various functions and
hierarchical/reporting levels in the Steel Segment.
Table 11: Skill requirements and skill gaps in the Steel Segment (Manufacture of finished
products)
Function /
RoleLevel Skills required Skill gaps
Production,
QA, R&D
Section in-
charge
Ability to undertake manufactureof bars, pipes, wire and wire
products from billets, building
beams and columns from
blooms, and flat-rolled products
such as sheets, strip and plates
Inadequate ability to ensuremaximum mill availability /
uptime
Inadequate ability tocoordinate between
supervisors / shift-in-charges
ITIs / below 12th with /without experience
Diploma engineers with 3-4 yrs experience; Some
ITI-trained personnel withexperience
Grad engg / PGs with 7-8yrs experience / diploma
engg with 10-12 yrsexperience + metallurgy
background
Manager
Supervisor
Workmen Workmen
Supervisor
Workmen
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Function /
RoleLevel Skills required Skill gaps
from slabs
Ability to oversee the completemanagement of the rolling mills
Detailed knowledge of themetallurgical properties of steel
as well as the transformations the
steel goes through during the hot
rolling process
Detailed knowledge of therolling process and the ability to
guide supervisors and workmen
on technical parameters
Ability to be actively involved insourcing of equipment when
required
Ability to undertake craneoperations from loading /
unloading / transfer of finished
goods, etc.
Ability to ensure maximum millavailability / uptime
Ability to ensure that the shape,chemical and mechanical
properties of the final product are
as per client specifications
Inadequate ability tocoordinate between multipleagencies such as logistics
personnel, logistics providers,
technical services, etc.
Supervisor /
shift-in-
charge
Ability to operate controls andmonitor output screens linked to
the production equipment so as
to ensure that production is being
done as per the required
parameters e.g. the ability to
ensure that the % reduction per
pass does not exceed the
Inadequate ability totroubleshoot and ensure
machine up-time
Inadequate ability tocoordinate among diverse
agencies
Inadequate ability to monitor/ use controls / guide
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Function /
RoleLevel Skills required Skill gaps
prescribed limits is critical to
ensuring optimal load on themachine
Ability to ensure properconveyor operation for moving
WIP products between stations,
moving finished products, etc.
Ability to conduct in-processinspection to check if parameters
such as surface specifications, rib
quality, section weight, diameter
etc. are as per final requirements
Ability to assist in conductingtensile tests, bend tests to ensure
that production processes are
working as per requirement
Ability to ensure exactlyreproducible product quality on
the production line
Ability to plan and implementpreventive maintenance
schedules for machines so as to
reduce machine downtime
Ability to troubleshoot andensure maximum machine up-
time in the case of a breakdown
Ability to manage and scheduledaily and weekly production
Ability to enforce key safetymeasures on the shop-floor and
ensure an accident-free
environment, especially given
the high temperature
workmen for the same
Availability of personnel witha metallurgy educational
background is a concern
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Function /
RoleLevel Skills required Skill gaps
environment / products being
worked onAbility to undertake mechanical
testing of raw materials and
finished products
Workman /
Operator
Ability to monitor machineparameters and use the required
controls
Ability to cut small samples fromthe final bar / rod for testing /
QA
Ability to operate cranes / hoi