What is your overview of technological developments in crane, hoist and material handling equipment sector in India, its market size, problems and future prospects? How the present recessionary conditions have affected its business plans, more so of Electromech?
Mr. Murthy:- Regarding the size of the market, there are no authentic study details and at best it’s only guesstimate to be around 5000 numbers. The industry had been quite dependant on the automotive and its ancillary industries. Only few companies like Electromech are in a position to cater to different types of industries like engineering, steel plants, construction and infrastructure etc.
We have identified areas, which are critical to future growth/ prospects for Electromech. Those are thrust areas for our R&D. In next 4 / 5 years, our focus will be on bringing more products and applications in our market. Our current product portfolio focuses on material handling for various industries and workshops whereas we are not really in process equipment cranes or mobile type of cranes yet. So those are going to be focus areas along with bringing more and more standardization across platforms.
In this recessionary period, considering bleak auto sector scenario and difficult times in engineering industry, it had been a Herculean task to sustain reasonable levels of operation and growth. So we do have some impact on our cash flow, however overall we don’t see any impact on our business plans as such. Some of our customers are delaying product delivery as they themselves are getting adjusted to changed market conditions, having said that, we had observed very minimal cancellations. Further, in last financial year, we had turnover of around 80 crores, this year we are expecting it to be in range of 140 to 150 crores. In fact, we are focusing on increasing production capabilities at Pirangut facilities and also completing its planned production facilities in Chennai, in addition we are pursuing inorganic growth opportunities to make most out of these times.
In addition, we expect focus on infrastructure development in India and expected recovery in auto and auto ancillary sector by next year will help build/enhance a very sizeable market for our products/ solutions. We are looking into, how best we can address those requirements with range of our service offerings.
Tell us something about Electromech’s manufacturing facilities, product range and technical prowess at its command to incorporate latest developments into its product range on a continuous basis to stay ahead in the business?
Mr. Tushar:- We have an excellent manufacturing set up at Pirangut, near Pune, India. The Pirangut factory is considered to be the single largest dedicated crane manufacturing facility in India. This facility is spread over 18 acres and has more than 18,000 sq. m of covered manufacturing area.
We set up this particular factory in 2004, since then every year we are increasing it bay by bay, so this manufacturing setup we are expanding continuously. In next three to four months, we are expanding it to double of existing size. In addition to this, we are also in process to set up a factory in Chennai for catering to the specific regional market. By this financial year end, we hope to do almost 600 plus cranes. In fact, we are proud to say that no other company in India manufactures as many cranes as we do.
Mr. Murthy: - Electromech has always taken pride in itself as being at the forefront in adopting newer technological advances in cranes and is considered as a pioneer in various fields by its peers. This factory is equipped with sate-of- the- art machinery and semi automated girder manufacturing fixtures. Constant development is being undertaken with the sole intention of maximizing the value delivered to the customer in terms of lower costs, higher reliability, higher safety and faster productivity.
With a view to bring in contemporary technology to the Indian crane market, Electromech has an exclusive tie up with ABUS Crane Systems, Germany for India. ABUS is one of the world’s largest manufacturers of industrial cranes and crane kits and has a wide range of standardized products that range from 150 kg to 100 MT. Electromech offers this premium range of products to a vast spectrum of discerning customers spread across industry verticals.
About Electromech product range–It manufactures wide range of equipments–This range includes, Single Girder Overhead Cranes (250 kg to 32 MT), Double Girder Overhead Cranes (1MT to up to 200 MT), Gantry/ Goliath Cranes (up to 100MT), Electric Wire Rope Hoists (1MT to 32 MT), Underslung Overhead Crane (250 kg to 10 MT), ABUS wall traveling cranes (up to 5 MT), Jib cranes (6300 kg), Shaft tunnel mucking Systems of various capacities and the Staker Cranes to utilize the warehouse space optimally.
Mr. Tushar:- Apart from these, we also cater to specific client requirements through customization, especially when it comes to equipments for construction industry or for steel industry or where there is lot of customization required.
Electromech’s growth during the period has been very impressive. What are the major growthmilestones in its journey starting from a single shed to the present premierposition? What do you attribute the success of the company to and where do you see the company in the coming 4-5 years from now delivering top-class products and services catering to wide range of client requirements in the domestic as well as export market?
During this journey, company has achieved ISO 9001-2000 certification in 2003 and an award for Export Excellence from engineering Export Promotional Council (EEPC) in 2005.
Electromech calls itself a solution provider rather than just a product manufacture. A crane is engineered equipment and one need to understand precisely what are the requirements of the client are? Why the client is putting up a crane? Does he really require a crane or is there any other equipment which can satisfy his requirement? So we go to the client to understand the requirements. We try to prepare a solution rather than just pulling out a catalog and saying that these are the products we sell. But, we understand the requirements and design and configure requirements specifically for client. So this is pre sales activity through which we go through and that’s the way we approach to our orders.
After getting the order, there is a continuous interaction with the client, informing the client about status of its order, what are the things that one needs to take care at the site i.e. ensuring the things which can interfere and affect while erecting the crane etc…
When cranes are dispatched our team is there on the site to erect, to do commissioning and to hand over the crane.
So it is like a total solution approach which we prefer to have in our business and that is our philosophy, rather than saying we sell a product or a crane.
Mr. Murthy:- Electromech has been very impressive in last five years, from turnover of just 2.5 to 3 Crs in 2003, and now this year its likely to be around / up to 150 Crs is a huge leap. Its like every year, we had achieved 100% growth in all respects i.e. sales, production and the service team. We expect to continue with the same philosophy and ensure same level of growth.
What we are looking for in next 4/5 years, is not just the volume we need to be bring in but more products and associated applications.
We may acquire some companies which are doing well for both organic and inorganic growth of the company. There by bringing diversified lines, possibly in next few months, we will start looking into some other applications than our conventional products.
With technical strength at your disposal, Electromech renders a range of technical services in structural, mechanical and electrical field providing well engineered solutions. What is the range of services provided by the company?
Apart from supplying the equipments, it also focuses on providing after sales service. This is to ensure minimum impact on client’s shop floors as material handling is an unavoidable evil in every manufacturing process. So we have a dedicated team of engineers to take care of these requirements in terms of regular maintenance, inspections, preventive maintenance, breakdown and all kinds of maintenance. We also maintain some important stock items to address breakdown situations at client’s place.
Electromech also offers up gradation or modernization of equipments, which has become obsolete for various reasons.
One of the main stay of Electromech is we do undertake annual maintenance contract. Our specially trained people are there to provide these services to our clients.
We have offices in Lucknow, Ahemdabd, Delhi, Jamshedpur, Chennai, Bangalore and Mumbai. Through these regional offices we offer our products/solutions as well as after sales services.
Electromechhas a partnership with ABUS Crane Systems, the leading brand from Germany in crane and hoisting business. How these global developments in crane and hoist products have been absorbedand assimilatedat local manufacturing end? What is the level of indigenization and technical self–sufficiency obtained in the company as a result of this partnership?
Mr. Murthy: - We have a tie up with German crane manufacturer ABUS and we are their exclusive representative for India. Electromech offers this premium range of products to a vast spectrum of discerning customers spread over diverse industry verticals.
ABUS product range reflects standardized products which are mostly imported. Assimilation is an application point of view and our staff is trained by the ABUS to mach the skills.
Our R&D, its focus areas, wider product portfolio, capability to offer customized solutions and not just products out of catalog reflects self sufficiency and indianization that we have achieved in Electromech.
How proactive the company is to HRD so as to equip its workforce with new knowledge and skill to deliver business value to its clients as a part of service?
Mr. Murthy:- We have a very young and dynamic team, ready for challenges and motivated with associated growth prospects. This team is aligned with vision that we have for Electromech.
This team at helm of Electromech consists of qualified technocrats with collective experience of more than one hundred years in the industry. More than 250 motivated experts are engaged in the manufacturing of cranes, hoists and similar lifting equipments
Electromech invests in all needed training programs to sharpen the skills of its work force to meet its and its client’s requirements across industry verticals.
With continued focus on infrastructure development, what are the categories of major projects that will boost the demand for the productsmanufactured/serviced by Electromech as the market picks up following measures introduced by the Governmentto overcome demand slump accruing from recession? What kind of competition, the company foresees in the future and how it proposes to strengthen its marketing network?
Mr. Tushar:- Electromech supplies a lot of equipments, specially designed and manufactured for infrastructure space. In fact, one can name any company in infrastructure development and most likely you will find they are using our products / services, definitely we have been associated with all giants in the infrastructure space.
As of now, we are working on orders from Soma enterprises for their Jalanda - Panipat project. We are also catering to specific requirements from Tata BlueScope, Jamshedpur, and Tata motors, Lucknow for their world truck project. We are also supplying our products to Hansen Drives, Coimbtore. We have orders at hand from HCC. We are providing our products to Lanco for their power plant. This reflects breadth of industry verticals as well as geographic reach that we have achieved.
Mr. Murthy: - In addition, as we discussed earlier, we are largest crane manufacturer in India. This year, it self, we are manufacturing around 600 cranes for various customers. We are looking at doubling this capacity in next three to four months. Our focus is on expanding our product portfolio and cover segments where we are not present yet. This is in addition to exclusive tie up, we have with ABUS for its premium product range. So overall we are well equipped to meet requirements of Infrastructure space and opportunities that may be introduced by measures taken by Government to address recession.
We have set stiff targets for ourselves and internally we are focused on meeting those targets. We have set up various regional offices to enhance our marketing and after sales service network. We are looking at possible acquisitions to ensure inorganic growth. There are multinationals like Demag, Kone Cranes, have already established their offices in India and have established their manufacturing facilities in India to indigenize their equipment and be competitive, however, we believe, we are well equipped to meet challenges associated.