Zeng Guang
LiuGong India's operation has been the company's most successful overseas venture ever since its establishment in 2007. The Indian operations of the Chinese's construction equipment's conglomerate having its production facility at Pithampur in Indore reported 70% sales growth in 2016 as compared to 2015 and 85% growth in sales revenue during the same period as compared to the previous year. Looking forward the strategy to carry out local production in enhanced volumes as per its global expansion strategy, Liugong will expand its product line in India. Mr. Zeng Guang spoke to P.P. Basistha on the sidelines of the global dealers' conference on the company's expansion plans in India and the challenges:

Based on your strategy to carry out enhanced regional manufacturing and strengthening regional headquarters, what will be your strategy in India?
India is one of the prime manufacturing and sales hubs for the company. The Indian operations contributed to almost 7% of the company's sales revenue in 2016. We will continue to strengthen our Indian operations, to enable faster decision making. Commensurately, we will also strengthen local manufacturing by identifying suitable vendors. To undertake local manufacturing, we have now a dedicated team of 20 engineers in place. Presently, we are manufacturing motor graders and wheel loaders with high levels of localization. To expand our product portfolio, we will start production of 21 tons excavators from 2017 onwards in India.

What are the challenges in localization mainly in the selection process of vendors?
The vendors are available but they are mainly devoted to bigger and established OEMs in India as they assure them fixed volumes. This makes selection process of vendors challenging for us. Further, there is challenge of deficient supply chain in terms of logistics. However, with increased focus on localization and with our equipment sales attaining in India critical mass, we expect to counter this challenge for successful component sourcing.

Are you planning to produce bigger size equipment in India?
At present volumes are very less in bigger size equipments. If demand increases we will take a call based on market trend.

Do you have any plan to export your equipment from India to neighboring countries?
Yes, we have exported some volumes to Sri Lanka, Middle East, and Bangladesh already and will keep exporting if volumes go up.

NBM&CW December 2016