Adding Value to Tower Cranes Sales
The new sales strategies are being evolved by tower crane manufacturers and distributors to tide over slowdown. P.P. Basistha takes a look.
The manufacturers of tower cranes are being left out with little options to take on the slow demand from the construction sector. According to industry estimates, the demand has been 15% less as compared to the corresponding period last year. The marketing cost of competitive products in the downturn has equally been affected due to rising steel and other raw material prices. Growing production and service costs have also restricted manufacturers and distributors to render economical products and service but that does not entirely take a toll on the business confidence. Both the manufacturers and distributors are working out long-term strategies adopting many technological innovations in their product lines and distributions to counter falling sales.
However, driving in the innovations in products and sales do not come easy for the manufacturers and distributors. This is especially when steel prices are high in both national and international markets added with firm prevalence domestic and Chinese inflation and high interest rates. Rising Chinese and domestic inflation and cost of steel have put the domestic manufacturers at pricing parity with the foreign products. All leaving little scope for manufacturers to offer cost competitive products and services.
Mr. Ram Babu Cheruve, Director, Conmech Auto Consultants Limited (CMAC), endorses the observation explaining, "Prices of tower cranes in India are being influenced by economic develop- ments in China. The initiatives that the Chinese government has taken to cool down industrial production, has impacted tower crane production as manufacturers are raising RMB at higher rates. Besides, labor and altogether production costs have gone up. The transportation costs also have firmed up owing to volatility in global oil prices, are compelling Chinese tower crane manufacturers to increase price of their products. The manufacturers have similar experience at home under rising inflation and commodity prices and strategy of government to raise interest rates."
The Indian tower cranes market is occupied by Chinese, Indian, US, and European manufacturers but sizeable share of the market is commanded by Chinese manufacturers owing to price competitive products offering.
So what are the promotional measures being worked out by principals and distributors to take on falling sales amidst rising cost of production? Mr. Ram Babu informs, "the design modification is a major strategy being worked out by Chinese manufacturers. From earlier welded box type, the mast sections of the cranes are now made angle type. The design changes have increased the cost and weight of the cranes, however the transportation costs have been brought down as the cranes with new design features require less number of containers for movement. Further, reengineering has been carried out to minimize working costs of the cranes." CMAC distributes Chinese manufactured cranes in India.
Mr. Ram Babu says, "To offer value to product sales, we are offering trained operators with the tower cranes, so as to provide maximum equipment uptime to the contractors. The operators are trained in our own training schools where they are updated on latest technologies. The training is imparted on working of electricals and functioning of variable frequency drives for preventive maintenance." He informs, "to provide financial support to contractors, we get 15% of the products amount financed through banks and 85% is provided by us." CMAC is in the process of setting up new parts depot in Delhi, Mumbai, Bengaluru and Vadodara to provide parts support for its tower cranes other than annual maintenance support.According to Mr. Rambabu," as a long-term strategy to neutralise theimpact brought by the volatility of global currenciesand now the depreciation of Indian currency against the dollar local manufcaturing should be encouraged."
Indigenous manufacturing is one of the most sought after solutions to remain price competitive by tower crane manufacaturers. ACE had its distribution tie up with Zoomlion Tower cranes of China for marketing the latter's products in India. However, ACE has been manufacturing its own indigenous tower cranes for the past one and half years at its Faridabad production facility in Haryana and has sold almost 130 indigenously manufactured tower cranes. ACE manufactures single model of 6 ton tower crane with 50 metre jib and 1.3 ton minimum lifting capacity at tip.
According to Mr. Arun Bishnoi, Country Head, Tower Cranes, ACE, "the masts of our tower cranes are manufactured of seamless steel tubes. The seamless design of the masts makes the cranes durable with extended life. Bending distortions do not take place in the masts when the cranes are dismantled and transported." He mentions, "presently steel for the tower cranes are being imported but we will shortly start getting it from Tata and Jindal to make completely indigenous product, which will make us price competitive as well." According to Mr. Bishnoi, "the domestic steel manufacturers are awaiting for production volumes to increase which will allow us to get volume discounts from them."
He says, "most of the parts and components in our tower cranes are of local origin. They can be sourced locally in case of replacement in turn, reducing downtime of the equipment. We have cut down on unnecessary technical sophistication in our cranes."
To maintain operational safety at site, ACE provides certified operators for its tower cranes and for big customers, it provides onsite training for operators. The company gets its products distributed through 16 dealers based across the country.
Localization of products specifically to address the domestic market has been one of our long-term strategies which Terex India. As per Mr. Martin Seibert, Director, Terex Cranes India, "we are importing the Terex brand of tower cranes for the Indian construction market from Europe. However, we have started making some critical steel parts at our facility at Hosur. While some parts are also being sourced from local vendors; we are matching them technically on the global specifications. Our strategy is for the demand volumes to pick up to undertake large scale local production." Terex sells tower cranes with lifting capacities of 8-32 tons and has sold its cranes for real estate and infrastructure projects.
"The brand value of Terex tower cranes is a result of exceptional product reliability and working safety. Sufficient maintenance trainingand timely parts support is another initiative to make our mark during the volatile times. Terex is trying to promote its high capacity tower cranes to enable us help build better infrastructure.
Innovative Customer Support
Sales slowdown is being tackled by innovative customer support strategies. According to Mr. Kapil. R. Ghai, Chairman & Managing Director, Ispat Infrastructure (India) Limited, "We have formed an after sales team under Anand Manufacturing & Marketing Company Limited (AMMCO) which is a fully owned subsidiary of Ispat Industries. It offers its service support by providing erection, operation, maintenance and dismantling the tower cranes for contractors. The core team for operation of the tower cranes at site is well trained by engineers from Jaso and from AMMCO itself. The training ensures safe operation of the cranes with fewer breakdowns." Ispat is the exclusive distributor of Danish manufactured Jaso tower cranes in India.
Mr. Ghai says, "pricing value is provided by Ispat for Jaso tower cranes, as we phonetically spell out the service details in clear terms with or without parts support, post the cranes are sold whereas some manufacturers and distributors always try to gain something through hidden charges for the products sold and services rendered."
Enhancing the availability of tower cranes through attractive pricing options is one of the recent marketing strategies of Ispat. According to Mr. Ghai, "we started our crane rental business May this year, big ticket customers, like Sharpoonji & Pallonji and L&T found it quite commercially lucrative to hire our tower cranes as they can give us back the cranes without maintaining extra inventory, especially in present scenario when maintaining a large fleet is a costly affair. Cranes provided on rent are well maintained by us; we have rented out a five year old crane to Sharpoonji."
The availability and pricing viability is provided by Ispat for tower crane users through its crane buyback services as well. Mr. Ghai informs, "The buyback services are provided both for Jaso and other tower cranes, we buy back the tower cranes from the contractors once the job is done. This service has evinced positive response from good number of small and medium contractors."
Distributors are banking upon the quality products that would offer value for money to customers and will keep strengthening their market presence during the downturn. According to Mr. R.B. Pandey, General Manager, Marketing, ABG Cranes, "we distribute premium Chinese Yangmao tower cranes which are higher on pricing but the contractors can have extended equipment uptime and durability through the cranes, as the steel used in the crane is of superior quality."
According to Mr. Neeraj Gaur, Manager Director, Fine Equipment Ltd, "Chinese manufactured SYM tower cranes marketed by us, stand on its design, with minimal breakdown and ensured adequate maintenance support through our sub dealers and service personnel."
Better return on margins to contractors is claimed to be ensured by Liebherr through its tower cranes. According to Mr. David Griffin, India´s Director of Sales and Service for Liebherr tower cranes, "nature of construction in India is changing fast. With advent of high-rise structures, more contractors are now turning towards tower cranes, in areas and cities that might not have required them in the past. Traditional ways of working are no longer enough for many of the new projects."
He says. "Contractors are now turning towards technology for speed, efficiency, and safety. Internal climbing tower cranes is ever more prevalent in India. Our cranes are able to fulfill all the desired requirements."
Liebherr tower cranes have been finding their application in high-rise construction projects in India. Indian contractor PSP Projects Pvt Ltd has recently purchased a Liebherr 71 EC-B 5 FR.tronic Flat-Top crane for use in constructing a 19-storey private hospital in Ahmedabad, Gujarat.
The crane, equipped with a 50-m boom and installed as an internal climbing crane, will be able to cover all areas of the 10,000 m2 site where lifting is required. According to information made available by Liebherr India, the 19 storey 450 bed hospital will have a height of 72m and will comprise two wings. The crane has been supplied based on the contractor's requirement of one unit to construct the entire project. According to Liebherr, the area for each floor is 4,000 m2. Supported by a 50-m jib, with the crane placed in the centre of the plot of the land the crane will be able to cover the entire site. The 71 EC-B 5 FR.tronic is a Flat-Top model designed for fast and easy assembling and dismantling. It has a maximum lift of 5t and a lift of 1t at the full length of the jib. End height under hook height is around 80 m.
A Liebherr 90 EC-B 6 FR.tronic Flat-Top tower crane has been recently purchased by Godrej & Boyce Manufacturing Co Ltd for long-term use on developing a parcel of land on the outskirts of Mumbai. According to Liebherr sources, the crane has been brought for a long-term commercial and residential project being developed on land in the Mumbai suburb of Vikhroli. The equipment will be used to construct four residential towers, comprising 28 storeys in height, and two 32 storeys. The crane is being used to build two blocks simultaneously. 50 m jib of the crane will facilitate the contractor to carry out all the necessary lifting. The crane is being used for eight hours a day, six days a week, with two operators trained by Liebherr working in shifts.
According to Liebherr, the 90 EC-B 6 FR.tronic is a Flat-Top crane with a compact head that incorporates the hoist gear, the slewing gear, the central switchgear and the complete ball slewing ring support. Quick-release fastenings make pinning the jib and counter-jib an easy operation. The crane has a maximum lift of 6 t, and can lift 1.4 t at the full length of the jib.
Tower cranes has also been supplied by Liebherr to Man Infra to build the 80-storey twin towers of Orchid Heights in Mumbai. A Liebherr 200 EC-H 10 FR.tronic tower crane is being used by contractor Man Infra construction to construct India's second tallest residential building, Orchid Heights, at Jacob Circle in Mumbai claims Liebherr. 200 EC-H 10 comes with a 60 m jib. It has a maximum lifting capacity of 10 t, and at the end of the boom the crane can lift 2.4 t.
The twin towers of Orchid Heights will both reach a height over 300 metres and have 80 floors when they are completed in 2013. At present, the tallest building in Mumbai and in India is Imperial Towers, at 249 m and 60 storeys.
Mr. Griffin says, "the projects where we have supplied our tower cranes are being executed smoothly. Execution of projects for the contractors has been possible due to efficient cooperation between different sections of both companies, including sales, service and project representatives from Liebherr." He mentions," we are working closely with contractors for delivering maximum productivity through the equipment."
Customer support through enhanced equipment and spare parts availability is being provided by Manitowoc. Mr. Ashwani Mattoo, National Sales Manager for tower cranes, Manitowoc Cranes India says, "we will add a few more dealers in our sales network during the present fiscal year."
The company has consolidated its market presence in India by offering cost benefits to its customers. Mr. Mattoo says, "Through indigenous production at our Pune plant, we have been able to bring down the cost of our tower cranes. Local production has provided us with economies of scale. We managed to control our fixed production costs as well, and have passed on this cost savings to our customers." Manitowoc manufactures structures of its tower cranes in Pune, while mechanical and electronic components are imported. The US crane manufacturing major produces its 5-16 tons hammer head tower cranes in India. Cranes above 25 tons capacity are imported.
Escorts Construction Equipment Limited (ECEL) will offer value through Comansa Jie a part of Linden Comansa, Spain company a range of flat top tower cranes to Indian construction sector. The company has entered into an exclusive marketing tie up for promoting Comansa's flat top tower cranes in India early this year.
Mr. Sheetal Malik, GM, Sales- Construction Cranes, ECEL says "the cranes being premium in market positioning are promoted for niche project application involving power, industrial projects and high- rise building construction."
Mr. Malik says, "the premium positioning of the cranes is because of its competitive technical features. The features provide high equipment uptime and safe operation." He elaborates, "there are many distinctive features of the cranes such as a unique design to change from 4 fall to 2 fall and vise versa and its removable jacking cage provision. With a single jacking cage available, heights of other Comansa cranes can be increased or decreased at an industrial job site and this provision leads to cost savings. However, Comansa Jie cranes require less jacking as the mast size is 5.5 mtrs and thereby giving a better productivity and more safe operation. The other most significant feature of the equipment lies in its self-dismantling mechanism. Being a Flat Top Tower Crane, the Jib of the cranes can be dismantled piece by piece at ease without bringing the crane down on the ground. The dismantling can be carried out by Comansa's own patented aerial jib removal system."
Mr. Malik informs "All Comansa Jie cranes are manufactured strictly adhering to stringent DIN standards and Comansa Jie Tower Cranes can be offered upto a free standing height of 100 metres as the philosophy of Comansa is that they are not the equipment supplier but instead they are solution providers." ECEL ever since its recent marketing collaboration with Comansa has sold 12 units in India. This includes, 4 units of 18 tons, 7 units of 12 tons and 1 unit of 8 tons. Among the units sold has been to L&T for its Rajpura thermal power plant for construction of 210 metre height cooling tower, highest in India. Units have been brought by BGR Energy Systems Limited for construction of cooling towers at Kalisindh plant in Rajasthan and Marwa in Chattisgarh. Kalisindh plant will have two cooling towers with 142 metres of diameter on base and height of 200 metres.
ECEL distributes Comansa Jie and Linden Comansa flattop tower cranes in India with a maximum lifting capacities ranging from 5-64 tons. The equipment are sourced from Comansa Jie facility in China and flagship facility in Spain depending on the requirement of customers.
Customer Retention is VitalBut how do manufacturers promote cranes in such a situation when demand volumes are indeed low? Mr. S.K. Malve, Director Technical, Anupam Industries Limited says, "customers have a better choice to acquire Anupam-Alfa tower cranes due to competitive cost and advanced technical features, comprising high tensile imported steel, German electrical and all EUROPE make drives." He explains, "buying our tower cranes during the lull period would certainly be profitable for the customers. This is because the construction market will definitely improve going by its cyclic nature. Our new tower cranes with an extended service life of over 15 years, will be the best equipment for customers to use them in future projects."
Mr. Malve informs, stating that the extended life of our tower cranes are ensured owing to theAngle design of the masts. The design disallows deformation during erection, dismantling and transportation from one project site to another.
Anupam Industries will shortly launchContainer Handling Cranes in India which will be made under technical collaboration with Mitsubishi of Japan. Anupam has sold34 tower cranes with lifting capacities ranging from 5-6 tons ever since it entered into a tie up with Alfa. The company sells its tower cranes through its four regional offices.
Manufacturers are developing business plans to counter the slowdown with advanced, locally made products backed by competitive price support. Mr. Vikram Mehta, Spartan says that we have recently started manufacturing the latest technology flattop tower cranes at our China's new production facility in Guangzhou."
The new plant is manufacturing various models of Tower Cranes, from 6 ton to 50 ton capacity of Stationary, Inner Climbing and Luffing crane models. Significantly, Mr. Mehta informs, "Producing the cranes ourselves will make Spartan price competitive and most importantly we will control the quality. There is tough price competition on assurance of timely deliveries to contractors as everyone is trying to make sales and have margins amidst falling demand. We will try to maintain a ready stock of 5-6 cranes at our Mumbai plant which can be delivered immediately on order." The manufacturing of cranes and maintaining inventory are also being done by Spartan with future projection for sunny days when there will be substantial growth in demand of cranes in India.
The other new world class manufacturing facility at Atgaon (on the Mumbai-Nasik highway) has started production of Rack & Pinion Passenger Hoists – Single and twin cages of 1, 1.5 and 2 ton capacity. Also with the technology from Wickham Hoist, UK, we have got great success in our Multifunction Material Hoist. The company has got great response of these hoist from leading builders and contractors like L&T, DLF, Ahluwalia Contracts, Man Infra, B.L.Kashyap, Omaxe Infra, Amrapali to name a few.
Mr. Mehta says, "In the current situation, retention of business and getting repeat orders is really important for us. We have hired consultants to make an elaborate Customer Service Strategy as a part of 5 years detailed Business Plan to strengthen our customer service processes. Hence Spartan has recently installed the worlds best CRM (Customer Relationship Management) software from Oracle at its back and front office to serve and delight its valued customers.
He elaborates, "The Customer Service department is a back office set up which undertakes complete monitoring of the product in delivery till commissioning. It also takes customers, feedback after delivery of the equipment at the site. We have also appointed Product Heads to monitor the erection of the equipment in accordance with a planned progress chart. These product heads also audit the equipment erection and train the operators at site."
Further speaking about starting a separate customer delight department, Mr Mehta says "Arguably, we are the first construction equipment manufacturing company to have a Customer Delight department. This team is in constant touch with the customers, once the equipment are commissioned. We follow a system of formats & procedures, where we constantly evaluate customer satisfaction & work towards achieving 100% score. Our Customer Delight team also conducts various training programmes on-site for clients project team and labourers about the equipment's usage & maintenance. We organise free PMC's (Preventive Maintenance Camps) for all our top customers periodically and also take AMC's (Annual Maintenance Contracts) for complete equipment efficiency and maintenance. Our commitment towards customer extends from Satisfaction till he is Delighted, thereby building Trust & Faith in us and our equipment."
"Spartan has opened its offices all over India and does not work through any dealers. This ensure we are directly in touch with the customers to serve their needs better. Also we stock all fast moving spare parts in our regional offices and each office has a Service head with minimum 4-6 engineers," says Mr. Mehta.
He adds, "Spartan is aggressively hiring the Best Talent in the industry and spending a lot of its time in training its employees so that it achieves 50% growth every year to achieve its Vision of being the largest, best and the most preferred choice of the customers." The positive fall out, the slow demand had on tower crane manufacturers and distributors has led to business innovations attaining a new dimension both on technology and service. It augurs the industry's and contractor's expectations which will lead to greater cooperation among the two when demand goes up and the former will increasingly be able to customize its products and services for the latter. As the tower cranes will remain an integral part of every project on the basis of high utility it delivers.
NBM&CW December 2011
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