"Caterpillar® continues to be active in India on a number of fronts. The country represents a tremendous opportunity for Caterpillar, with increasing focus on infrastructure investment and on urgent need for efficiency and higher productivity. Excon is a great stage to display our world-class machines along with many road construction and utility equipment. Also on display will be customers support offerings that Caterpillar and our dealers (GMMCO & TIPL) can deliver. We will be showcasing our product support solutions, rental & used equipment solutions, and Cat Connected Worksite offerings apart from a Cat merchandise stall," informs Mr. Ajay Shankar, Country Head, Caterpillar in an interview with S. K. Khanna.
In the present slowdown spell in India, CE companies are under great pressure; how is Caterpillar with its strong fundamental meeting the challenge through its innovative managerial, technical, and financial measures?
India represents a tremendous opportunity for Caterpillar, with increasing focus on infrastructure investment and an urgent need for efficiency and higher productivity. Some projects may be slowed or delayed due to the current economic circumstances, but our long-term commitment to serving our customers and growing our business is strong. Caterpillar is investing in the Asia Pacific Region, with offices and factories located in over 10 Asia Pacific countries including the Company's regional headquarters in Singapore. Our employees and suppliers have done a great job taking care of our customers, but we have to be prepared for recovery in the developed world beyond 2013-14 and continuing growth in emerging markets. Caterpillar focuses on partnering with the customer, through dealers, to help them understand the options available, and the capability of the machines. What we offer are integrated solutions, right from the kind of purchase that is possible [outright buy, finance option or rental] to the support services needed. Furthermore, technology additions such as machine control and guidance system has clearly demonstrated greater productivity and increased the efficiency of the customer.
Please take us through Caterpillar products development activities, ramping up of operations across the product lines and new products populated in the Indian market during the last 1-2 years.
Caterpillar continues to be active in India on a number of fronts. Some of the significant developments over the past two years includes Caterpillar investing in a $62 million expansion in 2011 of its existing off-highway truck manufacturing facility in Thiruvallur, Chennai. At Excon [Nov 2011], Caterpillar launched the 770G and 772G off-highway trucks which were manufactured at Thiruvallur and are targeted at the Quarry and Mining segments across India. Perkins is scheduled to start manufacturing its 4000 Series engines in Aurangabad, India, following Caterpillar decision to invest $150m in a new plant. In April 2012, Caterpillar launched the company's new backhoe loader manufacturing facility in Thiruvallur, Chennai. Most recently we launched the Cat 320 D2 which is an upgraded version of its predecessor 320D.
How is one of Caterpillar's flagship programmes-REMAN progressing? What is the current status of your efforts with various stakeholders and government bodies in identifying a viable plan to scale up remanufacturing activities?
Caterpillar's commitment to sustainable development, and the Company's expertise in manufacturing technololgy and processes, promise a bright future in this area for Cat Reman. As the world leader in remanufacturing, Cat Reman is finding new ways to reduce, reuse, recycle and reclaim materials which once would have been considered waste. Remanufactured goods have the same appearance, performance and life expectancy of new products and carry the same warranty as new parts. The only practical difference to the consumer is that remanufactured parts cost approximately half as much as new parts.
The government of India approved the import of Reman parts in the third quarter of 2012 and Reman imports started in October 2012. We expect Reman part sales to grow in the coming years as customers realize the value in using them. One significant area of opportunity is the mining industry which is already seeing good usage in this segment.
A word about Cat Connected Worksite initiative. How does it ensure higher productivity, better equipment availability and other related benefits to the users?
We understand that productivity and the Customer's bottom line depends on moving material accurately, quickly, and safely. CAT® CONNECT SOLUTION is a solution with site positioning systems, construction asset management services, powerful wireless and Internet-based site communications infrastructure. With the use of this technology, contractors can gain greater insight into their operations, enabling them to lower operating costs and improve accuracy, safety and productivity. This will offer them a significant competitive edge in the market.
AccuGradeTM Productivity solution which supports both 2D (Dimensional) and 3D (Dimensional - GPS based solution) is our primary offering within the CAT CONNECT SOLUTION space and is available on Track Type Tractors, Excavators, Motor Graders and Compactors. The AccuGrade Grade Control System brings to the customer an increase in productivity by up to 40% while reducing their site costs dramatically [savings in fuel consumed were in the range of 40-45%]. The revolutionary Caterpillar solution is factory integrated, sensor-independent, and features a suite of products, which includes cross slope, sonic, laser, GPS, and ATS technology.
There appears to be some forward movement in fast tracking road, port, and airport, metro and mining projects in the country. Inventories of equipment and placement of orders are being finalized.Equipment orders by CIL alone may amount to billions of dollars. Many CE companies are in this race, including Caterpillar. Do you think that this will lift some gloom in the CE market till it breathes easy?
We anticipate tremendous growth opportunities primarily driven by infrastructure needs in India and across the Asia Pacific region. According to Business Monitor International (BMI) the FY2012/13 growth forecast is 6.0 per cent for the Indian construction sector. This has been attributed to non-conducive monetary conditions, policy inertia and lacklustre infrastructure activity which have continued to dampen construction activity for the rest of FY2012/13. However, the outlook for the construction sector beyond FY2012/13 is getting better. Not only are monetary conditions likely to improve for construction companies in FY2013/14, but the government is also making pertinent efforts to remove bottlenecks that are delaying infrastructure projects in India. The current forecast is for real growth for India's construction sector to reach 7.6 per cent in FY2013/14.
What are Caterpillar's plans to participate in the CE market event-Excon 2013, New products and services likely to be unveiled at this mega event?
The message for the Excon 2013 is "Built For It". From our Caterpillar dealer network to the services offered by Caterpillar Financial Services, along with our employees and stakeholders who go the extra mile, to our machines and engines that stand the test of time, Excon is an excellent opportunity to tell the Caterpillar story. Whatever the job, we're up for it, and whatever the challenge, you're ready for it. Together, we're built for it. Excon is a great stage to illustrate this point.
Our world class machines would be on display along with many road construction and utility equipment. Also on display will be Customer Support offerings that Caterpillar and our Dealers (Gmmco & TIPL) can deliver. We will be showcasing our Product support solutions, Rental & Used equipment solutions, and Cat Connected Worksite offerings apart from a Cat merchandise stall.