ElectroMech’s alliance with Stahl CraneSystems

ElectroMech recently tied up with Stahl CraneSystems, Germany, a world leader in EX cranes and components. Tushar Mehendale, Managing Director of ElectroMech, Thomas Kraus, Director of Stahl CraneSystems and Terry Fletcher, Project Manager, International Projects Management of Stahl CraneSystems interacted with Subhajit Roy. Excerpts.

ElectroMech has announced tie-up with Stahl CraneSystems GmbH. Mr. Thomas how significant is this alliance for your business?

Thomas Kraus (TK): This alliance is very significant for our business because we intend to start this the EX group business in India. The alliance with Electromech which is one of the India's leading players in the field of industrial cranes will give us a right platform to venture in Indian market.

How do you find this Indian market recent scenario?

TK: Quite a challenging market. We need to give huge emphasis on value for money and value for customers. As a whole we see tremendous potential in Indian market.

Which are the segments you are catering to?

Terry Fletcher (TF): Our business is mainly focused on the oil and gas industry. We are talking about hoisting equipment for hazardous areas exposed to the explosion like oil and gas, chemical, pharmaceutical, paintings sectors where there are chances of explosion. Material handling is needed in all industries and explosion protected equipments are essential to reduce the chances of explosion.

Do you think that this alliance with Electromech will help you to expand your business activities in other countries in Asia?

TK: Our partnership with Electromech is entirely focused in Indian market. We have subsidiaries all over the World to serve the other countries.

Mr. Tushar, how important is this tie-up from your business point of view?

Tushar Mehendale (TM): Electromech is in the business for past 30 years and today we are the largest manufacturer in the country in terms of volumes. We at Electromech provide solutions to the industry. Our focus is not just to sell our products but to provide solutions as per customers’ requirements.  We have a very big portfolio of industrial cranes which we sell into lot of industrial vertical.

But we always felt that there was a vacuum in our product range as we were not in a position to supply cranes used in hazardous areas i.e. the explosion protected range of cranes. To remove that vacuum, we were on the look-out for a good partner who is global leader and has good products in this particular field.

As Thomas mentioned STAHL was also on the look out for an established Indian partner who can help them gain foothold in the EX market in India. Now, both of us decided to tie up and this opens new avenues because with the help of STAHL’s explosion protected EX range of products we are able to cater new industrial verticals such as pharmaceuticals, chemicals and basically any area where there is a hazardous and inflammable environment.  We are quite optimistic about this tie-up with STAHL.

Mr. Terry, can you tell us about global business?

TF: STAHL is a company which existing for last 130 years and we have developed the business for standard and explosion protected lifting equipment continuously during our time. We know that our subsidiary companies all over the world and partner companies as well, we find that enough attention has not been paid to India so far which was much needed. Now, we want to improve approach to Indian market. The co-operation with Electromech will help us to penetrate in to rapidly developing Indian market which has a strong demand for our kind of products.

Mr. Thomas, why it took 130 years to start your venture in India?

TK: We have delivered a lot of cranes from our company in India through direct sales using international connection or through the use of EPC contractors who are working for big clients like Reliance. So we have been doing business in India for many years. Now we feel that time has come to optimize our business by manufacturing EX cranes here and have a partner who will be working extensively in the market and making contact with customers. We also work for enriching the knowledge of customers.  We do not sell merchandise products; rather we provide customized solutions as per our customers’ requirements. We believe in the philosophy of close co-operation with our customers because ‘closer it is, the better it works’.

Mr. Tushar, can you discuss about this alliance in details?

TM: As we mentioned earlier the idea of this alliance is to get the best of the both world. We make use of the STAHL’s world class products. Globally, STAHL products are considered as ‘Gold Standard’ for explosion protection range of products and also the benchmark when it comes to the entire EX range of equipment.

In India, as I have mentioned earlier we are the highly established and one of the leading players in our areas of business in the country. Today we have branches across the country. We have manufacturing facility with the capacity of manufacturing 2000 cranes. Our well spread out service network caters to the different industrial segments across the country.

This proved to be a win-win situation for all. Now, we get reliable partner in STAHL, STAHL gets reliable technology partner in ElectroMech who will help in supplying EX range of cranes to the customers in India. And ultimately the customers who want to procure world class products like STAHL will be benefitted. Henceforth they need not pay extra money for importing a product from abroad. Now, we are making our supply chain more efficient. We will be securing only the components from Germany where as we are going to do the structural fabrication and the entire crane assembly. This would allow us to bring down the logistics as well as labour costs and the cost benefit will be passed on to the customers. Subsequently Indian customers are also very happy because they will get the local support for their investment. We would also provide pre-sales services, during manufacturing execution of the project or after sales services as required. So at the end of the day it is win-win situation for customers, STAHL and Electromech. Actually it couldn’t have worked-out better than this. Now customers will have very efficient supply chain and very good vendors who are in position to supply high quality products.

Stahl’s EX range of products are of superior technology having a lot of additional features. STAHL designed systems are extremely safe for hazardous environment. As far as technology is concerned which is being used in EX range of products, no other Indian cranes manufacturers who manufacture the crane for hazardous area has such kind of technology. So in-turn we are providing much more supreme products in the market.

Are you expecting any kind of competition from Indian manufacturers?

TM: Currently, we will not be facing any competition from the Indian manufactures for the range products we are proposing to cater to the market. There are Indian manufacturers who are manufacturing the explosion range of products, but STAHL range of products comply with the stringent regulations which are in force in Europe.  These regulations are much more stringent than those applicable in the Indian market. As a result, these products are several degrees safer than those being offered by local Indian companies.

Furthermore, Stahl offers superior quality contemporary products than the products which are currently being manufactured in India (using almost 40 to 50 years old technology). So our products are highly reliable, extremely safe and the overall ownership costs of products for the clients are extremely low as compared to indigenously manufactured cranes.

How energy-efficient and cost effective these products are?

TM: The way these equipments are designed and manufactured, the power consumption is much lesser. We get to see power consumption of up to 15 to 20 % lesser than the conventional Indian cranes.  Given the quality of products, the overall value proposition to the customers is higher than what the Indian products are offering. Superior levels of uptime coupled with minimal maintenance and spare requirements along with extreme reliability and highest safety measures translate into a much higher value proposition than locally available EX cranes. Ultimately, safety can never be understated and human life can never be measured in terms of money.

Any further expansion plans?

TM: We have recently finished the capacity expansion and we are now in a position to produce 2000 cranes per year. We are also going to set-up a new manufacturing unit in Chennai. For Electromech, expansion is an ongoing process and we are continuously upgrading our sales and services network to reach out to closer to our customers.

And with inclusion EX range of products in to our product bouquet, we have now in a position to cater to many more industry segments than what we were catering earlier.

Do you wish to share your views on union budget 2010-11?

TM: It is really heartening to note the marked increase in the allocation to the power sector. India desperately needs more spending in this sector and the Finance Minister has delivered on this front. We are happy that India is firmly on the path of becoming self sufficient in its power requirements and as an equipment supplying company to several power projects, we are also excited at the prospects of additional business this move will generate. Indian infrastructure has always been a dark spot on the India growth story while the high rate of personal savings has been the bright spot of the Indian economy. The Finance Minister has cleverly used these facts and by providing tax breaks for individual investments in the infrastructure sector, he has tried to ensure sufficiency of funds for several key infrastructure projects. Again as before, being equipment suppliers to several infrastructure companies, this move also opens up newer avenues of growth in our business.