According to certain schools of economics, stagflation is a natural phenomenon of any developing economy. The phenomenon works beyond the bounds of the general accepted theory that supply is generally governed by demand in matured economies according to which, product pricing is linked to demand. On contrary, in stagflation production costs are high due to spiraling commodity costs while demand is low. This could be due to role of intermediaries in supply chain as one of the reasons. Sustained retrogression in demand due to host of factors, primarily ban on mining, tardy awarding of infrastructure projects in between rising manufacturing costs, seems to have made crushing and screening equipment manufacturers during past few years get well versed with the theory of stagflation (steel being the prime raw material for making the plants and consumables). Though getting acclimatized to the evolving dynamics of market is good as it makes business planning more efficient. Notwithstanding, it makes marketing more stiffer than ever before, even when the days were sunny when quarry, operators used to look at lower operating costs per ton ensured by strong technical support.
The apprehension seems not to be unfounded. Despite clocking growth of 12-15% in 2012 in its construction equipment business from India, Sandvik prefers not to remain complacent on its laurels. The Swedish entity has targeted higher 20% growth in 2013 through construction equipment business even as competition is bound to get stiffer.
The customer support and business growth will be through continued introduction of newer and higher capacity products targeting all the crushing stages. Sandvik is looking to add strength to its sales through marketing of its acquired ‘Rammer’ brand of hydraulic rock breakers for primary breaking. Sandvik which acquired ‘Rammer’ brand of hydraulic rock breakers earlier made an official re-launch of the products during 2012 in Mumbai. According to Mr. Raghavan, Rammer breakers available in varied range, will be well compatible to various classes of excavators.
In a bid to expand market, Sandvik will also look to tap 500-600 the segment beyond mass selling 200-300 tph class units in the country. The company recently launched 1000 tph, Vibro-Cone crushers, and has planned huge capital investment in coming years to strengthen its manufacturing facilities in India to ramp up production.
Margin RealisationIntroduction of newer products is one the major, ‘tried and positively tested’ business initiatives for better margin realization with the decision making echelons at the corporate boardrooms of the crushing and screening equipment manufacturing firms. The initiative is likely to be further well accepted for stationery and tyre mounted unit manufacturers as they go on to feel the rising heat from tracked plant producers. The intensity of competition is likely to get stronger from tracked plant makers as they continue to divert their attention to the aggregate sector largely owing to slowdown in mining. Enquiries have revealed that well crafted business plans are being formulated by tracked plant makers to target the aggregate sector.
Puzzolana also boasts of its wide portfolio for aggregate, iron ore, coal crushing and screening requirements. Mr. Venkataramana informs, “We have 12 models of jaw crushers, capacities ranging from 100 to 750 tph. Hydraulic gyratory cone crushers – 4 models of 200 - 450 tph, hydraulic cone crushers – 16 models 60-450 tph, vertical shaft impactors - 6 models – 75- 450 tph, centre shaft vibrating screens – 22 models – 120 - 400tph with 2 to 4 deck options.”
He adds, “for better revenue realization to our customers, followed by prolonged research we have introduced new products and product customization.” He says, “as one of the major product customizations, we have developed and successfully launched the Super fine cone crusher in floating shaft design operating at 6-8mm close side setting and at reasonable speed to produce 0-18 mm product for road contractors. The cone crusher can be placed in two places of the existing 200 tph three stage plant and produce 100% (-) 10mm product of 175tph, when required with a provision to produce all other products.” Mr. Venkatarama informs “through our in house foundry, we can control the composition of wear parts to suit the particular application.” With + 1800 numbers of crushing and screening units working at various locations, product customization is vital for the South based company to retain its position with the customers. This is as because sizeable parts of the business for Puzzolana comes from its existing customers.
Puzzolana has launched new crusher “Sander” for the production of sand (0-4.75mm) with control on percentage of <150 microns in the manufactured sand. Mr. Venkataramana says, “there are plants operating near Pune producing 3000 tons of output through 300tph plant in 10-12 hours.There has been Introduction of new feeder breakers for soft ores crushing from 1000mm to (-) 200mm. Twin Roll sizer for (-) 200mm crushing to (-) 50mm.” Puzzolana’s new launch also involves surface miner for continuous mining of coal.
Business retention through effective customer support is vital for Puzzolana. Mr. Venkataramana informs, “We have in place wide and tailor made support services much in sync with our products. This comprises management of spare & wears parts, maintenance contracts covering the parts availability, supervisory services, training, on cost per ton of production basis, operation & maintenance contract, life cycle support of the main equipment of the plant through extended warranties.
Working on operating cost minimization is also a strategy for Puzzolana towards making products cost-competitive while maintaining market presence. According to Mr. Venkataramana, “we make plans for annual purchase and bulk direct purchase from OEM suppliers. Manufacturing efficiencies are being incorporated by advancing our machining facilities for faster deliveries. Other initiatives include, enhanced introduction of automation in our manufacturing line through incorporation of cutting and welding techniques in fabrication.”
Valued SalesExclusivity in product placement backed by adoption of advanced technologies is another major initiative towards better margin realization. The strategy seems to hold basis as quarry operators continue to look for minimal production costs amidst higher output. Manufacturers having well entrenched captive demand pockets and market network are looking to maintain sales based on the plan.
Proman Infrastructure Services has chosen to embark on the strategy by entering into strategic foreign technical collaborations with foreign crushing and screening manufacturers. The broader idea behind the strategy is to have a brand image positioning legitimized by strong product placement.
He adds,“We also have technical collaborations with M/s Finedoor, United Kingdom for manufacturing screens and grizzly feeders in India. Our technical tie-up also lies with M/s Aggregate Equipment Industries, US for the unique Ortner for the removal of fines from the product available from crushers.”
PROMAN has recently launched Vertical Shaft Grinder (VSG) in technical tie-up with REMco of U. S. for producing plaster and concrete sand in combination with Midwestern Screens (also from the U.S) through dry process. According to Mr.Raghavan, “VSG offers 35% power savings and offers the unique feature of grinding and producing finer grade plaster or concrete sand as per the customized requirements. PROMAN-REMco VSG machines are high-speed grinders that can be custom-engineered to the specific requirements.” Newer products from PROMAN through collaboration with Ortner of the US also involves sand washing plants to produce sand.
According to Mr. Raghavan, PROMAN is setting up a new facility that will become operational by February 2013 enabling it to expand production. It supports its customers on a region-wise basis for Tamil Nadu, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Uttar Pradesh and Andhra Pradesh. He says, “Our back up teams are geared to approach and support our customers in as short a span of time as 24 hours across the length and breadth of the country. Our well-trained service engineers team also service installations abroad.” PROMAN’s manufacturing facility is located in Bangalore.
Mr. Raghavan mentions, “Each region is supported by an Area Service Manager along with a team of engineers involved in erection, installation, commissioning and troubleshooting. The engineers also impart training to the customer’s team of operators.” PROMAN also provides turnkey crushing solutions in greenfield projects alongside innovative crushing solutions retrofitted in existing plants.
Notwithstanding, one of the best tools to face the competitive market still remains to have an expanded portfolio supported by adequate stocks, so as to ensure timely deliveries, restraining the customer resort brand substitution. The strategy holds importance as the market continues to get increasingly service oriented.
The multi various marketing initiatives of manufacturers to boost up sales can be characterized as growing maturity of the crushing and screening market. However, product placement which is accepted as key to success in marketing have can be made solid in these trying times by plant manufacturers through increasingly focusing on total solutions support beyond supplying standard products. This can be ensured by acknowledging the finer requirements of quarry owners as the market tends to get increasingly service oriented. Efficient sales promotion ensuring timely reach and support can be made through mix of dealers and direct sales by manufacturers. Focus on aftermarket business can be good revenue drivers as well.