“(Increasing inflation) is putting pressure on our profitability because the cost increase in manufacturing is not getting passed fully at customer end”, says Arun Savanur, VP & Head, Construction Equipment Division, Greaves Cotton. “We are trying to offer the cutting edge technology products combined with value for money product tag which meets the Indian customer requirements.”
Established in 1859, Greaves Cotton is one of India's leading companies having competencies in various engineering solutions. Can you brief us about your construction equipment business?
Greaves Cotton is one among many Companies globally who can offer a complete range of Compaction and Concreting equipments under one roof. In compaction equipments, we manufacture upto 19 ton soil Compactors, 9 ton Asphalt compactors and 3 ton mini compactors under technical collaboration with BOMAG Gmbh, Germany. Apart from these we are also offering a wide range of road construction machineries like Pneumatic tire rollers, Milling machines, Asphalt pavers, Soil stabilizers etc which are directly imported from BOMAG, Germany.
In concreting equipments range, we offer Batching plants above 30 Cbm/hr, Transit Mixers up to 9 Cbm, Concrete Pump (both S Valve & Flat Gate Valve technologies). We can also offer tailor made solutions like a metro pump, boom pumps to meet the specific customer requirements.
We have recently ventured in to earth moving segments by introducing Motor Graders and Wheel loaders, which are getting well accepted in the market.
Which is that one sector has maximum demand for your construction equipment? What about recent demand and supply scenario?
After the global meltdown which made its impact in India during Mid 2008, Indian market is in a steady recovery path. Road construction and Civil construction segments were one of the badly affected segments during 2008-2009 and now it is showing signs of improvements, thanks to the various schemes announced by the central government in infrastructure projects. We are hopeful of reaching the peak levels of 2007 by 2011.
Presently all manufactures had realigned themselves to adjust with the low demand situation. Now demand and supply positions are just matching. It is expected that in near future demand of products may outstrip the supply making delivery period longer for products.
Tell us about your key products, manufacturing facilities, recent tie-ups and acquisitions.
At Greaves, we always strive to offer the best technology and quality products as per the global standards. In compaction equipments we have technological collaboration with BOMAG, who is world no.1 in their filed. In concreting equipments, we offer the latest technology products in batching plant (Twin shaft & pan mix) controlled by latest software as a standard scope. In concrete pumps we offer both superior technology and reliable machines through S valve and flat gate valve technologies which meets toughest performance standards in India. .
Any new construction equipment in pipeline?
Recently we have tied up with Mitsubishi Heavy industries, Japan for introducing their wide range of motor graders in India. These are one of the most reliable machines available globally and proven as per Indian working conditions. We are also offering a wide range of imported BOMAG equipments which are used in road construction like Milling machine, Asphalt pavers, soil stabilizers, refuse compactors etc.
It is almost one year since you have entered into the earth-moving segment. How did your company performed in this segment so far?
We have entered into earth moving segments by introducing Wheel loaders and motor graders from proven international manufacturers. The demands for these products are growing steadily and we have selected the products which are much suitable for Indian working conditions. These products are well accepted in the market and the demand is growing rapidly. We are sure by end 2011 we will be one of the prominent and preferred players in these product class.
What are your further expansion plans?
We have some serious plans to widen our earth moving equipment ranges. We are in discussions with few global players in this regards to launch & manufacture their products in India.
We are also in the process for expanding our current capacity to handle higher demand of products.
What are the key challenges being faced by CE manufacturers in India?
Not in any order, I feel the challenges are: Availability of operators; Skill levels of operator; and RTO rules & regulations.
Do you wish to suggest any change in Government’s policy that would help the construction equipment manufacturing sector to excel?
In our views, presently the Central and State governments are doing their best to improve the infrastructure development in India, which is a good sign. They should continue their focus on creation of world class Infrastructure assets. We still have a long way to cover in this area compared to many other developing economies.
Can you discuss the impacts of increasing inflation over the construction equipment business?
In a simple term, it is putting pressure on our profitability because the cost increase in manufacturing is not getting passed fully at customer end.
What are the strategies being followed by your company to counter this challenge?
At Greaves we are trying to offer the cutting edge technology products combined with value for money product tag which meets the Indian customer requirements. In addition, we are in the process of implementing many customer centric service offerings to have better customer bonding which will take us one step ahead of competition.