Mr. Asit A Patel
"We constantly update us on the global technological trends for our range of equipment. As R&D is a never ending process at Apollo, we continuously make improvements based on customer feedback. We have added crushing and mining equipment productline with German technology to our product range. This has been well received. Soon we will be offering compactors with Italian technology. Apollo is moving towards being a one stop shop for the road construction industry," says Mr. Asit A Patel, Managing Director, Gujarat Apollo Industries Ltd. in an interview with S.A.Faridi.

Your company is known for transferring advanced technolo- gies in road construction sector. Please tell us a few significant hi-tech additions made in Asphalt plants, paver finishers, compaction equipment, crushing & screening machines and allied products  which have gone a long way  to ensure not only quality  products and reliability  but also have met  country’s eco-friendly and energy conservation imperatives.
Apollo is cognizant and we keep updating us to various global technological trends for its range of equipment. With a huge customer base, Apollo is also clear on the technologies that the customer is looking for both from the performance and the commercial points of view. So over the years, we have been using this knowledge to offer the relevant technology that lends itself admirably to the customers' needs from all the angles.

Apollo introduced Batch type asphalt plants

Specific upgradation on the plants has been on three major areas:
  • Improved process control – Apollo introduced Batch type asphalt plants in India with Japanese technology. With in house R&D, the process controls have been upgraded to match the best in the world.
  • Improved equipment management systems to enable the customer to have all the required data on the equipment performance through world-class control systems that include SCADA, a remote access system.
  • Energy efficient-counter-flow drum technology with heat recovery system and fully modulating burner resulting in perhaps the lowest fuel consumption in its class.
  • High efficiency pollution control system
On the paving equipment side, the upgradation has been on world-class hydraulics, controls and sen- sors for accurate grade and slope.

What is the market share within the country and abroad, the company enjoys today and its market projection of its share in the next three–four years? What kind of competition the company foresees in the future for higher growth?
Batch type Asphalt plants
In India our market share is product specific. It ranges from 65–25%. We enjoy a high market share in Batch type Asphalt plants and Paver Finishers – Sensor as well as mechanical. In foreign markets, the market share is country specific and ranges from 10 to 20%.

The competition will get more intense both on the technology and price fronts, in the days to come. But we are ready for it. We practice a market driven approach and believe in being close to the customers. We always have the proverbial ear to the ground which helps in offering the products matching the exacting standards of the customers.

R&D is an ongoing process at Apollo. We continuously make improvements based on customer feedback. In the case of new products, Apollo has always believed in availing world-class technology either through technology transfer or JV route. With this, Apollo offers state-of-the-art equipment that suits the tough working conditions in India.

We are confident that the value for money products combined with a customer centric approach will help us in improving our domestic market share to a range of 30–70% in the next 3–4 years.

How the present pressure of rising input costs, wages is proposed to be handled by the company to enable it to maintain its product line price competitiveness on a sustainable basis?
Rising input costs and wages on one side and market driven competitive pricing on the other side is a phenomenon in existence for 3-4 years. So far we have been successful in striking a balance between the two factors through a combination of value engineering, economies of scale and operational efficiency. Our approach for the future will be on similar lines. In instances where this striking a balance is not possible, our customers have the understanding to share the burden.

What are various measures at hand to deal with growing manpower crunch including systems placed in the company to improve skill of existing manpower, inducting new ones as well as improving customer skill to handle equipment for operational efficiency?
We have continuous training programs both with and without, to hone the skills of existing manpower. We follow good HR practices; hence our attrition rate is very low. People in the industry are aware of good employer-employee relationship at Apollo, so we do not face any difficulty in employing talent from outside when the need arises.

We have invested in high end software tools like ERP, CRM and a host of custom made software to improve the efficiency and knowledge management of the employees.

As the company proceeds ahead–how would equipment availability and customer support systems be strengthened by the company with new marketing initiatives like expansion of its dealership and outlets network?
We anticipate that the road construction equipment market to have an annual growth of 08-10% for the next 5 years. We have expanded our manufacturing capabilities to match this kind of growth. We are rather proud of the fact that Apollo offers the shortest lead time for deliveries in the range of equipment in which it is present. We do not see any problem in maintaining that record.

We sell equipment direct to customers through our sales offices (12 as on date) spread across India. All our sales offices have a team of service persons and stock spare parts for providing prompt after sales service.

In certain geographical locations like North India, we have exclusive dealers for selling our spare parts and provide post-warranty service support. We are now in the process of adding such dealers in the western and central parts of India.

We also provide intensive training to the personnel of the customers, enabling them to maintain the equipment well. This training is in two parts:
  1. Training at our plant.
  2. Training at the customer’s site.
We deploy our service personnel for longer duration of time to operate and maintain the equipment, on need basis.

Buying equipment with upfront payment is becoming difficult. Are there any plans at company’s end to tie-up with financial institutions, and banks to provide relief to the dealers and others for the purchase of equipment?
Our observation is to the contrary. Today, we have more number of players in the equipment finance business than what it was 4-5 years ago. What is more, public sector banks are also providing equipment finance to our customers. Apollo has good working relationship with all the financial institutions and our equipment is on the approved list of all such institutions. At this point in time, our customers do not face difficulty in tying up finance for the purchase of our equipment.

In future, should such a situation arise, we are open for tie-ups if that would be of benefit to our customers.

What has been the business performance of the company in the past two years and what is the target for future growth? How is the company well positioned to grab the emerging opportunities in the infrastructure sector?

Year Net Sales
(Rs. Crores)
EBITA
(Rs. Crores)
2008-09 169.91 35.66
2009-10 205.00 44.84
We expect a CAGR of 10-12% for the next 5 years.

We have added crushing and mining equipment productline with German technology to our product range. This has been well received. Soon we will be offering compactors with Italian technology.

Apollo is moving towards being a "one stop shop" for the road construction industry. We believe that this along with our commitment to offer the best value for money products and excellent after sales service, will help us in retaining the leadership position.
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