Canadian auctioneer plans India foray

The NYSE-listed Canadian industrial equipment auctioneer Ritchie Bros Auctioneers is investing $20 million for its India foray. Set up in 1958, the company currently operates in about 110 locations across 25 countries with 39 auction sites.

As part of its India plans, Ritchie Bros is looking to set up multiple auction sites with the first one coming up at Hyderabad. The company, through unreserved public auctions, sells a broad range of used and unused industrial assets including equipment, trucks and other assets used in construction, transportation, agriculture, material handling, mining, forestry, petroleum and marine industries.

Guylain Turgeon, managing director, Ritchie Bros, said “With the usage of equipment in India recording a significant growth, we find enough market for auction of new and pre-owned equipment. We have a plan to significantly ramp up our operations in India over the next three to four years.”

Last year, the company reported revenues of about $3.5 billion with a profit of about $350 million.

The company’s first auction in India would be in Hyderabad on September 25, following which it would spread to five more locations — Delhi, Mumbai, Kolkata, Chennai and Bangalore.

In Hyderabad, the company has leased out a 20-acre space near the international airport and has pooled 230 equipment for sale. “There is already interest building up world over about the Hyderabad auction. We have enquiries coming in from locations like Dubai for participation in the auction,” Turgeon said.

The company is also setting up a refurbishing shop next to the auction site. “We will, however, not entirely refurbish all our equipments. We’ll be just looking at the machine’s colour and tyres etc and apart from this, the machine will be sold in as-is-where-is condition,” he said.

Ritchie is planning to operate the Hyderabad auction centre on a temporary basis. However, once its revenues go up to $20 million, the company would look at setting up a permanent auction centre.

“The global industrial auction market is as big as $100 billion and we have a share of about 3.5% in that. A majority of the market is still fragmented,” he said.

Indian used-equipment market is currently estimated at about Rs 2,500 crore. It is estimated that the asset purchases by the Indian construction, mining, shipping and transport industry would be about Rs 50,000 crore every year and a sizeable portion of it is expected to come up for auctions at the used equipment auction centres.

As an in-built model, Ritchie earns about 15% in the form of commissions from sellers and a marginal amount from buyers.