BAUER: Laying the Symbiotic Foundation
Please brief us about the Bauer Group and how it sees the Indian market as compared with the international one.
Bauer Group, which is headquartered in Schrobenhaeusen, Germany, has three main business verticals; Bauer Construction, Bauer Maschinen, and Bauer Resources. The group started as a foundation engineering specialist. Over the years, since the group was working on various kinds of innovations and new designs in foundation industry, they got into equipment manufacturing in 70's for making supplies to other major construction companies, and also in order to amortize high development cost by producing high volumes. Since then, they have grown multifold and have been operating all over the world through their daughter companies. Bauer believes in being "close to the customer" by providing safe and superior performance with continuous innovations in foundation business. The focus has always been to nurture and develop long-term relations. And when you look at the profile of our Indian customers, the picture is very similar. They have been associated with us for decades.
How do you plan to change the mindset of the people; since Indians are used to very basic equipment and Bauer's range is technologically very advanced? In-fact, the prices of your products are higher than what your Indian competitors are offering in the 'Premium' segment. So, how are you synergizing these business aspects in India, where price is the main concern?
We work with our customers' right from the planning stage to the execution stage for better results as we see a big opportunity in this for building better solutions. In here lies the biggest strength of Bauer Equipment - not only being a supplier of equipment, but also having the engineering knowledge of developing projects with our customers and the involved parties. Considering this, our price points would always be different from others, but all efforts are, and will be made to bring down costs without compromising on Safety, Productivity & incorporating latest technological advancements – Our "Values-line Range" of equipment – which has been specifically developed for Indian sub-continent is the best example of this thought process.
Coming to the fact that you are growing your market base in India and since projects are mushrooming in every nook and corner of the country including remote areas. How do you ensure that your clients get the right after sales assistance? Since your machines are used at the initial stages of the project, how do ensure the availability of spare parts across the country round-the-clock?
As equipment keep moving to different locations depending on the development of project, we have worked accordingly on literally all aspects for providing the maximum availability of equipment for our customers viz – Opening of workshop in Mumbai, availability of trained service engineers and parts/consumables in Mumbai, Chennai & Delhi, training customer's service staff, reconditioning capability of aggregates in Mumbai etc. We have also worked with our customers on training the Operators about various operational and functional issues which led to better utilisation of equipment. Our intent has always been to build up our facilities closest to the customer so that the lead time is minimal.
Apart from this, our sales team has been working closely with our customer on providing valuable insights on the new developments in the new and existing projects
Have you set up any workshop/re-manufacturing facility for repair and overhaul of machinery?
Last year have we opened a workshop in Navi Mumbai as part of our commitment towards the local market, which is manned by trained manpower and is stocked with necessary parts and consumables so as to improved availability of equipment in the field. We have also made investments in the workshop for repairing and re-conditioning of major aggregates, so that the customers don't have to always buy new ones or send them to Germany for repair and refurbishment. Further up gradations are under process looking at the requirements of the local market.
Do you provide your customers the option to buy back the machine?
The market has been in turmoil for the past one and half year. There have been cases where some customers have even moved out of this business due to tough market conditions. But thankfully, most of our customers are looking this as an opportunity and want to graduate to bigger machines because there are new opportunities and options opening up. They are exploring opportunities with us where they give the old machines back to us and we reciprocate by giving them higher and advanced machines. In fact, we are likely to close few deals wherein we might arrive at a suitable price and take back old machines from customers and give them new ones. These old machines will be further overhauled and refurbished, and sold back into the market with suitable warranties.
Indian operators are not that trained and rely on cultivated experience. Since, Bauer provides high-end equipment, how are you planning to create awareness at this front and train the operators?
Any equipment is as good as it is operated and maintained. But due to lack of trained manpower in India, there is always a continuous movement of trained people to other places due to opportunities. This leads to operation of good equipment by non-trained manpower, leading to poor productivity and damage to the equipment. This is the biggest challenge.
Whenever Bauer sells any equipment, as a part of the sales agreement, we provide four to six weeks training to the operators, technicians and supervisors about operation & maintenance aspects. Bauer also has an exclusive training centre in Germany, where customers can send their operators and technicians for a certified training course. We also get our certified trained operators from HO to Project sites for various training courses. In the same direction, we are trying to club couple of customers together to train their group of technicians & operators so that the training expenses get reduced.
Bauer's machine history goes back to 20 years in India and most of the contractors have been importing second hand Bauer machines since the new ones are very expensive. Even when the Delhi Metro Project was started, there was an abundance of second hand Bauer machines. Are you still importing and selling second hand machines?
Firstly, I would like to clarify that even second hand Bauer equipment sold by us are suitably refurbished & overhauled on safety and productivity parameters. They are sold in the market with necessary warranty terms.
For the last few years, as the market conditions were good, we were primarily focusing on selling new equipment, as customers had enough liquidity and opportunities. But last year, the market has shrunk to almost 25% of its size against the year prior to that, which has again slowed down the new purchases. So in present scenario, though our focus still is on selling new imported equipment, but as per the customer's requirement, we are even ready to explore the options of getting reconditioned equipment from our fleet available with us at various locations world-wide.
Are you looking for India specific machine where automation is less?
In order to have an access to larger number of customers in the local market, which has a demand of lower technical specifications, especially in terms of electronics and ease of operation, Bauer has already worked on the same & has developed an exclusive "Value line Range" for Indian market. At the same time, Indian customer will have an access to our "Premium line Range" also. Both the range are manufactured in Germany
How do you foresee the next five years with respect to the market condition?
This year has been a tough for most of the CE manufacturers especially for foundation equipment manufacturers. We do not anticipate too much change happening in the present scenario of foundation industry in short term, as there are too many equipment lying in the market for lack of work, or are available for sale due to non-payments for the works already executed. But the silver lining is that the newer projects which are being launched have considerable work where deeper & bigger diameter piles are being explored. This would give rise to a demand and introduction of higher end equipment which are not available in the market.
But on the long term, CE industry including foundation industry in India has a huge potential due to requirement of infrastructure development all across the country. After the correction of present demand-supply mismatch, there lays a huge potential for foundation equipment in roads, railways, metro, hydo, marine & urban infrastructure development projects in coming years.
NBM&CW March 2013
