Special Report

Equipment Talk

January 2014
Move over 2013! This New Year holds enough promises to re-energise the Indian infra juggernaut.
Enough doom and gloom...it´s time to wake up to a new tomorrow and see the green shoots that have started appearing on the horizon across several core segments in the country. This ranges from clearances given to mega projects worth over Rs 4 lakh crore and re-energised power projects to the availability of more funds for finance and fast-improving mining prospects. As the infrastructure and construction fraternity gears up for the next phase of promising growth, MANAS R BASTIA presents the views and visions of a few captains of the industry.

´We are optimistic for the mid to long-term horizon.´
AM Muralidharan, President, Volvo India 

Market cycle: For the construction equipment market, there is a cycle every three years. But every time it comes back, it goes to a higher level. At this point, this cycle seems to have bottomed out and we only see it improving month over month.

Action plans: We are introducing more efficient products, added technology and imparting more training. All this is aimed to prepare for growth and give more solutions to our customers. We are also working to improve method specification, efficiency and speed of execution.

Customer focus: As part of our strategy, we will have industrial preference where our customers are; that was one of the reasons we invested Rs 90 crore in India. It was specifically for Indian customers and products. We also have opportunities around the world.

Way ahead: We are optimistic for the mid to long-term horizon; that is why we talk about commitment.

´There needs to be a transparent policy framework that will eliminate delays.´
P Ravi Shankar, CEO, Leyland Deere

Business focus: Our focus has been to establish our brand with a strong customer base across the country to act as our referral base. We have established customer touch points across India and are close to completing our goal of creating a loyal base in all four regions.

Future prospects: In the long term, we remain highly optimistic about the growth potential of the Indian infrastructure sector. There have been changes in government policies and we expect the overall market sentiment to improve after the elections. Expansion strategy: With the support of a strong customer base for our first product, we have unveiled our second product, the fuel-efficient 435E BHL, at EXCON 2013. Starting with the wheel loader, we will launch more products as the market progresses.

Message to policymakers: We need a transparent policy framework that will eliminate delays in land acquisition, environmental clearances and state or local body approvals.

´We are likely to invest in training and service centres this year.´

Anand Sundaresan, Vice Chairman and Managing Director, Schwing Stetter India

Shift in big buyers: Our top 10 customers in 2013 are completely different from those in 2012. The smaller companies have become bigger and big buyers. Recently, I met some municipal commissioners in cities such as Kolhapur and Pune where a lot of state and municipal projects are going on.

Product diversification: Although we have brought in some diversifications in our portfolio, we have kept our focus on concreting. In line with this, we have created a project department that is working closely with most of our customers. In the past three to four years, we have been doing quite well in the projects business. Rather than just being a supplier of equipment, we want to be a partner in progress.

Expansion plans: We have invested in our Chennai production facility to increase capacity. Further, we are likely to invest in training and service centres in some more locations this year.

´Developing policies towards sustainable infrastructure growth and development is an essential challenge.

Somnath Bhattacharjee, President and CEO, Material Handling Solutions and Equipment and Project Solutions Business, TIL Ltd

Towards sustainable growth: In the next five to 10 years, massive investments will be required in various infrastructure segments to meet India´s demand of population growth, increased economic activities and urbanisation.

Hence, developing policies towards sustainable infrastructure growth and development is an essential challenge for the society, industry and governments.

Future outlook: The current situation of slow progress and stalled projects in infrastructure sectors is likely to turn around with expeditious action on policy reforms and improved governance. Political stability at the Centre and harmonised state policies will be essential for sustainable progress.

Growth strategy: During the recent downturn, we have constantly focused on improving operational efficiency and protecting our revenue level. Simultaneously, we have accorded focus on new product development to maintain a balance between our short and long-term strategies. We have also expanded our product range to position ourselves as a full range player across all our business segments.

´We are continually developing new products and upgrades
R Muralidhar, Director, Global, Construction and Infrastructure Group, Caterpillar India

Projects underway: Our equipment is in operation across a majority of national, state highways and rural road networks, notably in Madhya Pradesh and Chhattisgarh. We also have a large presence in mining projects in the government and private sectors, besides growing numbers in building and infrastructure projects.

Business strategy: Our strategy in India is to deliver valued, quality products, services and solutions that provide the lowest total owning and operating lifecycle costs. Our availability vision is to be within a 100 km radius of customers. This is enabled by our unmatched customer support through our dealer network partners: TIPL in the North and East; and Gmmco in the South and West of India.

Product innovation: Given changing needs, we continually develop new products and upgrades. An example was the introduction of the new Cat« 950GC wheel loader at Excon 2013, which will be available to Indian customers in April 2014.

´We are seeing a shift in the market towards small size mixers.´
Neelesh Desai, National Sales Manager, BHS-Sonthofen (India)

Business outlook: Our construction business equipment portfolio mainly comprises ready-mix concrete and project sites; we do not see much improvement in the next few months. Of late, with people shying away from buying bigger plants, we have been selling a larger number of smaller mixers.

Supply chain alignment: As we sell more small-scale mixers, we have to plan production efforts accordingly. Also, small plants expect faster delivery. To address this, we are keeping in reserve some mixers for India in our China factory. At the same time, we are currently building our own warehouse in Hyderabad, which will be operational soon.

Manufacturing in India: Although the demand in India has not been very consistent so far, we are seeing a shift in the market towards smaller mixers. With some consistency in demand, we may consider an assembly line in India. However, this is in the discussion stage for now.

´By next year, we are planning forays into the Middle East, North America and Europe.´
Satheesh Srinivasa, Managing Director, Quest Informatics

Challenges ahead: Today, the challenge before construction equipment companies is to grow revenue. This is a good time for them to explore ways to streamline processes and become more efficient in after-sales. In this context, they look to our tools to enable them to implement systems. We ensure the best values through time-efficient, cost-efficient and quality processes.

Recent innovations: We develop, support and manage a portfolio of aftermarket products and services that include an integrated aftermarket ERP designed to seamlessly bring scalability across countries, regions and dealers/locations managing sales, service and parts inventory with customisable workflow. We have also deployed a comprehensive field service management (FSM) that enables companies to seamlessly sync field service operations.

Expansion plans: So far we have created the required collaterals and product lines for the Indian market with encouraging results. By next year, we are planning our aftermarket products foray into the Middle East, North America and Europe.

´We are providing a strategic advantage to our customers by bringing global solutions at our doorstep.´
Kennady V Kaippally, Country Manager, BU Mobile and Wind Solutions, Bonfiglioli

Business scenario: Opportunity for supply chain flexibility and the impact due to exchange rate escalation have renewed equipment manufacturers´ thrust for localisation. BTPL, a 100 per cent subsidiary of Bonfiglioli Italy, with its technological strength and local footprint is poised to benefit from this shift. By bringing global solutions at doorsteps, we are providing a strategic advantage to our customers.

Market outlook: We do not see much happening here in the short term. However, the enhanced investment forecast on the infrastructure sector, as per the Twelfth Five-Year Plan, will be a strong growth driver for the equipment industry in the coming years. As the market matures, we foresee general-application machines getting replaced by those offering special applications, following similar trend in advanced economies. Our hydrostatic drives cater to these special application equipment.

Capex plans: Bonfiglioli is fully committed to India. Our recent addition of RandD facility in India and introduction of slew of new products in the last two years underlines this approach. Our investments will be in tandem with such an outlook irrespective of the short term business climate.

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