Crushers Manufacturers Rework Marketing Strategy
The crushers manufacturers are reorienting their marketing strategies by identifying new demanding areas as market indications get rife on intensifying competition in near future, following continued lackluster demand from mining sector. P.P. Basistha finds out the details.
Yearning for light at the end of the tunnel, seems getting distant for tracked plant manufacturers as the lull demand phase will continue to remain ever since declining demand for tracked plants started in 2010 with the retrogression of economy setting in. The stillness of demand was contributed during 2011 due to slowdown in off take of iron ore from China apart from ban on illegal mining in Orissa. The mining restrictions on iron ore in Karnataka by the Supreme Court and by the local authorities added to the slowdown, resulting 50% reduction of tracked units.
The demand in 2012 is unlikely to perk up as the global and the domestic requirement may stay sluggish. However, on positive side, the recent reports on rebounding of steel demand in January and March quarter beginning from December led by increased off take of long products from primary producers like SAIL, JSW and Tata Steel may bring respite for the tracked plant suppliers to captive ores. The improved off take of steel products is due to the fact that the current quarter happens to be the last quarter of the terminal year of the 11th five year plan and the rise in off take is driven by the rush to complete the government projects before end of March. The revised GDP growth projections of the government which is now 6.9 percent, may also bring some cheer to the tracked plant manufacturers if the demand will remain in the coming fiscal.
NBM&CW's interaction with primary steel producers like SAIL, JSW and Tata Steel indicates that there is an adequate availability of installed tracked plants for the captive ores. What the producers think that the installed plant capacities will be sufficient enough in the short and mid-term to take on the moderate rising demand presently being witnessed.
However, the fresh demand of tracked units in mid and long-term is expected to be from recent development work of captive Chiria mines undertaken by SAIL, for the mega capacity addition of its flagship Bhilai Steel plant in Chhattisgarh, greenfield Kalinganagar steel plant of Tata Iron and Steel Company in Orissa will require tracked plants. The new unit of Jindals in Angul is expected to bring future demand of tracked units as well. The requirement from new facility of Balaji Ispat at Bokaro and Electro Steel casting's unit upcoming facility at Durgapur in West Bengal is also expected to go up. Expansion of Rourkela and Bokaro Steel plant of SAIL is expected to add up requirement of tracked units. The new facilities, in their initial stages are charted to come up during 2013-15. Notwithstanding, plant demand will be governed by the pace of iron ore allocation to the producers, which seems to move at a tardy pace.
Yearning for light at the end of the tunnel, seems getting distant for tracked plant manufacturers as the lull demand phase will continue to remain ever since declining demand for tracked plants started in 2010 with the retrogression of economy setting in. The stillness of demand was contributed during 2011 due to slowdown in off take of iron ore from China apart from ban on illegal mining in Orissa. The mining restrictions on iron ore in Karnataka by the Supreme Court and by the local authorities added to the slowdown, resulting 50% reduction of tracked units.
The demand in 2012 is unlikely to perk up as the global and the domestic requirement may stay sluggish. However, on positive side, the recent reports on rebounding of steel demand in January and March quarter beginning from December led by increased off take of long products from primary producers like SAIL, JSW and Tata Steel may bring respite for the tracked plant suppliers to captive ores. The improved off take of steel products is due to the fact that the current quarter happens to be the last quarter of the terminal year of the 11th five year plan and the rise in off take is driven by the rush to complete the government projects before end of March. The revised GDP growth projections of the government which is now 6.9 percent, may also bring some cheer to the tracked plant manufacturers if the demand will remain in the coming fiscal.
NBM&CW's interaction with primary steel producers like SAIL, JSW and Tata Steel indicates that there is an adequate availability of installed tracked plants for the captive ores. What the producers think that the installed plant capacities will be sufficient enough in the short and mid-term to take on the moderate rising demand presently being witnessed.
However, the fresh demand of tracked units in mid and long-term is expected to be from recent development work of captive Chiria mines undertaken by SAIL, for the mega capacity addition of its flagship Bhilai Steel plant in Chhattisgarh, greenfield Kalinganagar steel plant of Tata Iron and Steel Company in Orissa will require tracked plants. The new unit of Jindals in Angul is expected to bring future demand of tracked units as well. The requirement from new facility of Balaji Ispat at Bokaro and Electro Steel casting's unit upcoming facility at Durgapur in West Bengal is also expected to go up. Expansion of Rourkela and Bokaro Steel plant of SAIL is expected to add up requirement of tracked units. The new facilities, in their initial stages are charted to come up during 2013-15. Notwithstanding, plant demand will be governed by the pace of iron ore allocation to the producers, which seems to move at a tardy pace.
Increasing Competition!
According to Mr. V. Subhash Babu, CEO, Nawa Engineers & Consultants, "the future demand for tracked plants will in fact be governed by the expansion in mining and cement sectors. Major demand is not forecasted in the hard rock quarrying (aggregate crushing). The tracked market is unlikely to grow at a faster pace due to slowdown in miningsectors. As a result of slowdown in mining, stiff competition is expected, as tracked plants producers will definitely move towards aggregate space which in turn could bring the products price under pressure. However, the distinct advantage tracked equipment offer in terms of its mobility will always place this product segment as an important one in the market."
The new development in the tracked market is likely to make conditions stiff for new business development by existing players in track segment. Product promotions be newer entrants will be stiffer as well. This will call for, market penetration through positioning of competitive products.
The competition is a vital element these days that needs to be carefully faced by manufacturers who are planning to enter into the tracked market, through competitively priced product offerings. This is more so because, the emerging competitions are at multiple fronts. Firstly, it will be among the existing moderately priced players; secondly, among the premium priced players, and thirdly, among the premium and moderate priced equipment manufacturers.
If forthcoming indications are to be believed, Terex Powerscreen, with a sizeable presence in mining, is aggressively reworking on its marketing strategy to tap the new emerging aggregate sector. Besides this, it is also planning to consolidate its presence in its mainstay mining business. Other tracked manufacturers are also working on similar plans. The mining sector contributed 70% of sales of tracked plants prior to the demand slump.
Sandvik is calculating to maintain its active presence in the emerging market situation. Swedish equipment manufacturing major will be providing complete solution to the construction industry based on their requirements. According to Mr. Raghavan Ramaswamy, Vice President, Sandvik Construction, India, "As compared to our competitors who are offering standard products, our focus will continue to remain on providing crushing and screening solutions which are specially made keeping in mind our customers' needs. Our aim is to help customers to improve their profitability. The economy is growing, our customers are growing, so we will need to grow with them. Providing tailor made products and services will allow customers to yield optimum output and have economic viability in owning and operating the equipment".
Elaborating on Sandvik products and services offering, he adds, "In order to broaden our market presence, we will continue to build on the design and operational expertise of our technical support team who are probably the best industry. This is the team that studies the requirements of customers, and provides solutions to deliver a custom made products to them. We offer advanced, rational solutions for any size-reduction challenges, stationary or mobile. Sandvik crushing and screening equipment are engineered for maximum productivity. We have a full product range of stationary plants, mobile units and fully tracked or wheeled for the semi-mobiles, that are compact, highly productive and offer the highest levels of performance. Though, we are fully aware of the emerging demand situation; taking cognizance of the same, our efforts will always be to continue to provide viable solution to customers for the mid and long- term."
Sandvik intends to retain its market presence by offering ownership, maintenance and operating contracts for its equipment, besides providing parts and service support through its warehouses across the country.
The new development in the tracked market is likely to make conditions stiff for new business development by existing players in track segment. Product promotions be newer entrants will be stiffer as well. This will call for, market penetration through positioning of competitive products.
The competition is a vital element these days that needs to be carefully faced by manufacturers who are planning to enter into the tracked market, through competitively priced product offerings. This is more so because, the emerging competitions are at multiple fronts. Firstly, it will be among the existing moderately priced players; secondly, among the premium priced players, and thirdly, among the premium and moderate priced equipment manufacturers.
If forthcoming indications are to be believed, Terex Powerscreen, with a sizeable presence in mining, is aggressively reworking on its marketing strategy to tap the new emerging aggregate sector. Besides this, it is also planning to consolidate its presence in its mainstay mining business. Other tracked manufacturers are also working on similar plans. The mining sector contributed 70% of sales of tracked plants prior to the demand slump.
Elaborating on Sandvik products and services offering, he adds, "In order to broaden our market presence, we will continue to build on the design and operational expertise of our technical support team who are probably the best industry. This is the team that studies the requirements of customers, and provides solutions to deliver a custom made products to them. We offer advanced, rational solutions for any size-reduction challenges, stationary or mobile. Sandvik crushing and screening equipment are engineered for maximum productivity. We have a full product range of stationary plants, mobile units and fully tracked or wheeled for the semi-mobiles, that are compact, highly productive and offer the highest levels of performance. Though, we are fully aware of the emerging demand situation; taking cognizance of the same, our efforts will always be to continue to provide viable solution to customers for the mid and long- term."
Sandvik intends to retain its market presence by offering ownership, maintenance and operating contracts for its equipment, besides providing parts and service support through its warehouses across the country.
Challenge of Market Retention
The expansion of footprint in tracked sector through economical products positioning has also been started by Gujarat Apollo Industries through its wide range of tracked plants offerings. The company is planning to make market presence through its new SR 3000/2, 250 TPH tracked mounted crushing and screening plant manufactured with German technology. Apollo is also planning to generate business through its new PR 1000 R track mounted crusher with grizzly feeder with 250TPH capacity and crawler mounted heavy duty screening plant SR 400R with 400 PHH capacity.
Speaking of the new products, Mr. Snehal Dave, Senior Manager Marketing, says, "the new equipment equipped with advanced technologies, will provide total competitive ownership costs to the owners, backed by sound service support of Apollo through its 13 branches across the country. For enhanced promotion of the tacked plants in mining and aggregate sector, we have started a new crushing division that will promote the equipment in aggregate sector, iron ore and in limestone mining sector. It will also provide training to customers."
Not to be left behind, expansion and consolidation of market presence, Puzzolana Machinery Fabricators is also coming with new offerings. According to Mr. V. Venkataramana, Vice President, "we are introducing the 50/60 tons crawler crushers for North east region. The tracked machines will have diesel - electricdrive systems. Besides, we are also coming up with wheeled plants of up to 300tph. The advantage offered by our wheeled plants, will be its requirements of minimum concrete blocks for civil foundation, resulting in reduction of erection times."
To preserve its presence in new tracked business, Mr. Venkataramana said, "we are training our dealers,engineersin identification of troubleshooting & servicing. Besides this, we are also deputingin regular intervals service teams to ensure thatrequired inventories are at the remote sites of customers and enhancing capacities of our stock points. Further, we are developing dealers for exclusive parts and service support." Puzzolana has 12 stock yards across the country to provide parts support to major customers.
Mr. Venkataramana said, "we expect the new mining products to sizably contribute to our top and bottom lines in the mid and long-run. However, we are concerned about the present slowdown in the mining sector due to government's ban and restricted liquidity for equipment purchase. To neutralize the impact, we are looking for various options to make the equipment affordable for customers who are looking for financing options, renting and leasing out of equipment backed by sizeable customer service support. To provide maximum equipment uptime, we are in the process of strengthening our existing supply chain network from our mother warehouse to the user points. In accordance with environmental guidelines to minimize pollution in mining sites, we have provided ultra fine dust collection features in our surface miners and water sprinkling system."
The fact that the aggregate and quarry sector will continue to be potential demand area for wheel and stationary plants holds good for manufacturers' business, as they can expect volumes to grow. Business is expected to come mainly from road construction, given the government's intention to spend large sums during the 12th plan period. Demand is expected to come from core infrastructure projects consisting of hydro power projects based on the power capacity addition target of the government. However, growth will not be excluded from good amount of competition. This is as because, going by the trend witnessed over the span of last five years, emerging demand space will further continue to be thronged by entry of new Indian and multinational entrants both offering track, wheel and stationary solutions. Entry of new entrants will call for proactive business strategies by existing players to protect their turf.
To preserve its presence in new tracked business, Mr. Venkataramana said, "we are training our dealers,engineersin identification of troubleshooting & servicing. Besides this, we are also deputingin regular intervals service teams to ensure thatrequired inventories are at the remote sites of customers and enhancing capacities of our stock points. Further, we are developing dealers for exclusive parts and service support." Puzzolana has 12 stock yards across the country to provide parts support to major customers.
Mr. Venkataramana said, "we expect the new mining products to sizably contribute to our top and bottom lines in the mid and long-run. However, we are concerned about the present slowdown in the mining sector due to government's ban and restricted liquidity for equipment purchase. To neutralize the impact, we are looking for various options to make the equipment affordable for customers who are looking for financing options, renting and leasing out of equipment backed by sizeable customer service support. To provide maximum equipment uptime, we are in the process of strengthening our existing supply chain network from our mother warehouse to the user points. In accordance with environmental guidelines to minimize pollution in mining sites, we have provided ultra fine dust collection features in our surface miners and water sprinkling system."
The fact that the aggregate and quarry sector will continue to be potential demand area for wheel and stationary plants holds good for manufacturers' business, as they can expect volumes to grow. Business is expected to come mainly from road construction, given the government's intention to spend large sums during the 12th plan period. Demand is expected to come from core infrastructure projects consisting of hydro power projects based on the power capacity addition target of the government. However, growth will not be excluded from good amount of competition. This is as because, going by the trend witnessed over the span of last five years, emerging demand space will further continue to be thronged by entry of new Indian and multinational entrants both offering track, wheel and stationary solutions. Entry of new entrants will call for proactive business strategies by existing players to protect their turf.
Defending Markets
Mr. Shekhar informs Terex's plants comply with the varied requirements of the aggregate sector. He elaborates, "our Wheel Plants come with an onboard four deck screen on the cone chassis as well as on the VSI chassis. This allows the customers to take out four clean products from the screen in addition to the GSB product if required. Our wheel jaw plants also come with hydraulic CSS adjustment mechanism which allows easy change of CSS without any manual work. Our jaw crushers are also having one of the largest feed intake sizes in its class with a feed opening of 762mm. This avoids frequent chocking of the jaw crusher chamber due to oversize boulders and reduces downtime."
To strengthen its presence in aggregate market, Terex will continue to monetize its present sales and service support. According to Mr. Shekhar, "we are fully committed to provide world class after sales service support to all our customers. We have distributors across India for Terex Materials Processing brand with their respective parts warehouses spread across India to support the customers with local service and parts support. In addition, Terex has its own team of service and parts engineers who support our dealers and customers. We have a well stocked parts warehouse at our Hosur plant where we stock all critical parts. We also conduct regular training programs both at dealer premises and customer site to train the manpower. There are various classroom training programs arranged at our Hosur Plant throughout the year."
He further says, "our plants are ideally suited to work in Indian conditions as because the complete task of designing, manufacturing and commissioning of the crushing units is done internally keeping the Indian conditions and customers in mind. Depending upon the desired aggregates output of the customer, metallurgy is provided to the plants to minimize wear and tear. Besides these, requisite design changes are carried out to arrest any space constraints that the job site may have. We also provide customized conveying solutions at our units." He claims that the units operate on lesser power which reduces operating costs. With any technical fault detection, the machine transmits an SMS to its customers and Propel personnel for undertaking necessary preventive measures.
According to Mr. Kumar, "Propel crushers are known for its highest productivity with lowest operating cost and also are popular for its aggregate cubicity. It is most compatible for Ready-Mix Concrete (RMC) companies which claim 5 to 10% reduction in cement consumption because of the aggregate cubicity produced by our crusher."
Propel provides customers support through its network of five dealers based in Delhi, Mumbai, Kolkata and Coimbatore and four regional offices across the country. The company plans to tap eastern market of West Bengal and Orissa. North, West and South markets will also be under surveillance. "We would tap road and commercial projects. Aggregate producers will also be our focused area as part of our marketing plan," mentions Mr. Kumar.
NAWA will strengthen its presence in aggregate equipment sector by extending its already mature product offerings and by taking higher capacity positioning in 2012. According to Mr. I. Chandrashekhar Rao, Project Researcher & Consultant, Nawa Engineers & Consultants Private Limited, "we will continue to focus on our existing range of wheel and stationary plants for the aggregate sector in FY 2012-13. However, based on new fast emerging areas in the aggregate sector, pertaining to road projects, core and industrial projects and expanding urban infrastructure, we will offer an extended products range. This will involve offering our 160-780 TPH SRM 'Dura Cone' crushers made by Nawa under exclusive global technology purchase agreement from the famed Louis Johnson of US. Based on the new requirement of orders from the aggregate sector, marketing focus will also be maintained on our 190-330 TPH gyratory cone crushers and 70 -200 TPH roller bearing (RBC) cone crushers." Mr. Rao says, "since aggregates are the main staple and starting requirement for diverse infrastructure projects, our intention will be to provide plants for each specific requirements." Nawa has a complete range of jaw crushers under 60-800 TPH. NAWA's ever popular VSI's are available in the capacity range of 150-400 TPH. According to Mr. Rao, "with wider plants offerings, we will be looking for sizeable presence in emerging road construction projects. The new FY should be good for NAWA and Crushing and Screening sector as a whole. According to government's estimates around 39 crore tonnes of Aggregates are needed by 2012-13 in the road sector."
Tapping aggregate sector may sound ideal business initiative by tracked plant manufacturers in view of curtailed sales from mining sector. However, bigger business development into a new territory will have its own set of challenges. This is given the fact that existing wheeled and static plant manufacturers have a sizeable hold on the country's aggregate and quarry market. Promoting track business for wheel plant manufacturers will be easier given their known and captive customer base and support network as compared to tracked plants producers having presence in mining pockets.
To suit to the new application demand area, the tracked plants manufacturers will have to rework on their marketing and servicing strategies. Challenge is expected to be greater given the service support track plants working at aggregate sites, will now require on two accounts. First, given the engineering of tracked plants comprising power packs, tracks, hydraulics, filters, electricals, the equipment will need continuous support for contractors for higher availability. Secondly, the reorganizing of service network will be another fresh challenging task. Giving the fact that while working for road projects, different units will work in spread out areas in one or in many regions. This is as compared to the earlier situation in mining projects in areas like Barbil in Orissa or Bellary in Karnataka where given population of plants used to work in clusters, making it logistically easier for companies to offer service support.
The new spate of developments in mining and aggregate sector has set a new marketing precedent by the crushing equipment manufacturers. It will be now interesting to see, how the actual future demand equation unfolds in the coming years and how manufacturers are able to acclimatize to the emerging new situation through their products and services support.
NBM&CW March 2012
