ECEL–A leading Construction Equipment Provider in India

ECEL–Rising Like a Phoenix
ECEL's well diversified business operations, strong technical standing, ability to forge the right partnership with technologically rich global majors and sound management band width is sure to elevate it to the status of a key construction equipment player from its current status. The decision to set up state-of-the-art manufacturing facility at Ballabhgarh has been a very prudent one. Not only does the new facility treble its manufacturing capacity, it shall also provide the necessary band width to handle a diverse range of products, take quality standards to global levels, and provide better response to our customers through an inherent flexibility to change the product mix at very short notice. Our vision is to grow exponentially and hit a top line of Rs 2000 Cr and volumes of 15,000 units by 2011-12, through consolidation and value enhancement of our current offerings in one hand, and strategic forays into adjacent domains, on the other. We want to be seen as one of the top players in the industry, truly esteemed for innovation and value addition, says Mr. Kamal Bali, Chief Executive Officer Escorts Construction Equipment in his Interview with S.K.Khanna & S.A.Faridi.

Unfazed by current slump in the construction equipment market, ECEL has taken a bold decision to set up a modern manufacturing plant at Ballabgarh, Haryana. What are the fundamental economic and business considerations behind this move? How it will entrench ECEL’s position in the domestic market place?
Some of the verticals of the Indian ECE (Earthmoving & Construction Equipment) industry are probably undergoing a temporary slowdown in demand–thanks mainly to the prevailing bearish sentiment on account of a downturn in the global financial markets, input cost increase and higher interest rate regime. However, in India, nothing has changed in terms of the infrastructure building requirements and there are huge number of projects on and many more are in the offing. Clearly, there is no fundamental shift on the demand side in the medium to longer term. The next six to eight months may see a temporary postponement in demand (because of the factors that have been stated earlier), but since infrastructure is the basic platform for economic growth, we do not see any sign of India moving away from growth regime over the next five to seven years.

The decision to set up state-of-the-art manufacturing facility at Ballabhgarh has been a very prudent one. Not only does the new facility treble our manufacturing capacity, but also provide us the necessary bandwidth to handle a diverse range of products, take quality standards to global levels, and provide better response to our customers through an inherent flexibility to change the product mix at very short notice.

What would be the capacity of this new facility, major products line to be manufactured and the planned schedule of the plant to go on stream?
With the addition of our facility at Ballabhgarh, our production capacity would go up, in phases, to 15,000 units per annum. The new plant would cater to manufacturing of existing and new generation Hydraulic mobile Cranes, Truck mounted Cranes, Vibratory Compactors, Forklift Trucks and Backhoe Loaders.

With wider basket of products, what would be pricing policy at work to price its products right at the very first time. Does the company believe in the benefit of high volume, even at a lower per unit price to build a wider customer base for its products and services?
We, at Escorts, have always believed in and worked towards providing the maximum value and benefits to our customers. We are sure that our large base of existing and prospective customers will get greater value throughthe increasing bandwidth in our offerings as also because of innovative products and services which are on the angle.

ECEL has spearheaded important technological developments through its collaboration in earthmoving segment in contemporary range of cranes with overseas construction equipment majors. What have been recent collaborative arrangements to add muscles to ECEL technical and marketing strength?
ECEL has truly been at the forefront of innovation and technological leadership in the Indian ECE space, over the last three decades. Pioneering the introduction of Hydraulic Mobile Pick-n-Carry Cranes in 1971 where we continue to hold the global leadership position, we successfully pioneered the concept of Backhoe Loaders in the early 80’s together with a JV partner. Immediately thereafter, we introduced Vibratory Compactors and Slewing Cranes, followed by distribution of Crawler Excavators and Forklift Trucks.

In the new millennium, we have added a host of new offerings products including Articulated Boom Cranes together with FASSI GRU of Italy, Tower Cranes with ALPHA & HUATA, and Crawler Cranes up to 300 tonnes together with IHI of Japan, Motors Graders of Leeboy, US, and Power & Telecom Utility Equipment with Altec, USA.

This tradition will continue. . . soon, you will see a couple of newer introductions coming from ECEL stables.

ECEL has in place a sound network of countrywide dealership, after sales and customer support system. How is it being further strengthened in view of new products and services being added after expansion? How the introduction of renowned Lean Sigma system, introduced earlier, has induced efficiencies enterprises-wide including increasing customer loyalty/market share and growth in sales?
With an 88-location strong customer support networks, ECEL probably has the finest and one of the largest customer friendly networks in the country. We are working very closely with our network partners to further improve their reach and service levels. Improving service levels is an ongoing journey towards excellence and training is one of the keys to it. In addition to our Faridabad training center, we set up another training facility in Bangalore for imparting the skills for equipment operation and maintenance and sensitizing the personnel to changing customer expectations. The training facility is spread over 16 acres of land, and includes Workshops, Training Class-Rooms, demonstration sites, board & lodging facilities for 200 persons at a time. We also conduct training programmes for ITI boys and freelance operators to hone up their skills and make them employable.

What is the market share the company expects to garner in the next three-four years? Will you be ocusing on value sales or volume sales to lift market share?
Our vision is to grow exponentially and hit a top line of Rs 2000 Cr (1000 on the existing and 1000 on the happening products) and volumes of 15,000 units by 2011-12, by consolidation and value enhancement of our current offerings on one hand, and strategic forays into adjacent domains, on the other. We want to be seen as one of the top players in the industry, truly esteemed for innovation and value creation.

How the present pressure of rising input cost, wages is proposed to be handled by the company to enable it to maintain its product line price competitive on a sustainable basis?
No doubt, the input cost increased, particularly on account of steel, has been exceptional in the first half of the current fiscal. I believe steel has not seen this quantum of increase in the last two decades. We have taken and are taking a number of steps to contain the impact of this increase through value engineering and other innovative strategic cost reduction measures.

What are various measures at hand to deal with growing manpower crunch including systems placed at company’s end to improve skill of existing manpower, inducting new one as well as improving customer skill to handle equipment with operational efficiency. It is really a paradox that at customer’s end due to lack of training, equipment are not being utilized as per their potential?
We are completely aware of the manpower challenges and lack of training at customer’s end. Keeping this in focus, Escorts Construction Equipment Limited has initiated organized training programmes for the operator level manpower, at our training institutes in Bangalore and Faridabad. The facility, curriculum, methods, processes and skill certification for the training program has been accredited by CIDC (an organ of Planning Commission of India).