Escorts: On a Roll
What growth opportunities do you envisage for the CE industry and the challenges therein?
The country is seeing unprecedented growth with push for infra development by the government. India currently has a huge infra deficit and needs close to $7 trillion in the next seven years. This would generate about $180-200 billion worth of business for the CE industry in the next 10 years. So, we are very optimistic of current & upcoming growth opportunities.
A big challenge for the government would be to mobilize funding for the projects. The government has taken proactive steps by introducing the Hybrid Annuity Scheme (HAM), easing FDI etc, to attract private sector participation in infra development. We feel, for sustainable funding of infrastructure, private funding would be essential.
Which sectors will be the demand drivers?
No doubt, the Roads, Highway & Irrigation sector is fueling demand for the CE sector and will be the largest consumer. But, interestingly, the housing sector has started showing signs of recovery, with the demand side getting stronger industrial expansion in new capacities is imperitive.
In Maharashtra and Andhra Pradesh, big tenders are being floated for irrigation projects requiring a lot of backhoes and other equipment. Besides, mining and ports, railways and urban development are also picking up pace for project implementation, so demand tailwind is expected to remain strong for equipment industry going forward.
How is the CE industry evolving with respect to incorporating technology and add-on features in the machines?
As engineering efficiencies & technological options are getting wider, you have efficient machines with lesser fuel/energy consumption, increased reliability & durability. The new emission norm applicable from September 2020 would disrupt the industry & would necessitate increased level of investments in new technology viz. Hybrid, Hydrogen cell & Electric.
Escorts being a global supplier is already geared-up to meet & exceed the emission standard as required. Last year, we launched the electric tractor, which is infact a global first electric tractor.
IoT has become essential part of all products, you can now monitor, control & upgrade or change the operating parameters of the product remotely or using your mobile phone.
Operator's comfort and safety, higher productivity, energy efficiency and machines availability are a given condition now. We are excited to be an active participant in this transformation journey where the entire product concept & usage stands at a point of radical change. Our R&D is working closely with domain experts for building next generation platforms.
In the existing product range, we are aggressively upgrading & expanding our product portfolios.
Our Vision 2022 is to be a dominant player in Material Handling Space and to realize this objective, we shall be launching 2-3 new products every year. These products have been developed keeping in mind the aspirations of our customers.
What does ECE's JV with Doosan Infracore of South Korea entail?
In the Earthmoving & Road Construction segment, we aspire to be a Challenger. Our recent exclusive association with Doosan Infracore is a step in this direction. This association is expected to help both Escorts & Doosan to increase their participation in Earthmoving segment.
As you may be aware, Escorts was instrumental in bringing Doosan forklifts to India more than 15 years back and is still involved in this business.
Doosan products are renowned for unrivaled performance, high fuel efficiency, and convenient control, for meeting the customers expectation on high productivity.
How is ECE strengthening its dealer base?
As the dealer viability is quite important, we are constantly upgrading our dealers' ability to serve our customers. Our criteria is to have a certain minimum amount of machines per dealer. We try and make our dealers more viable, for instance, when we have to open a new customer touchpoint, we ask our dealer to do it.
In many places where our dealer is not able to go, we are opening new Authorized Service Centers. We will soon be launching an initiative called Escorts Promise with credible service network available within close reach of our customers.
What additional value does ECE products and services bring its customers?
Value can be defined in certain ways: one is Product design, to address a certain application or pain point of the existing solution. Second is ensuring the product is up & running i.e. After-sales support, and third is incorporating the Customer Feedback in both. We are addressing all the three aspects of the customer's journey and this process will continue to evolve as customer demand changes.
Today's customer is more sensitive to performance, productivity, and life-cycle cost of the product. His buying decision is both value and price driven. Escorts believes in Value Innovation i.e. maximum value at lowest possible cost. We believe that this move will make us more relevant locally and help us build a global presence too. The Indian buyer is also looking at the safety and productivity aspects of the products. This is bound to result in manufacturers' incorporating the latest technology to design and develop robust and reliable products.
How important is Telematics for the machine owner/user?
Most OEMs are offering telematics as a standard feature, and so are we. But there are more than 100 parameters that you can control on the machine and all are not relevant currently. So, it's a pick and choose combination of options required by the customer. It's no point giving more than what is required.
What are ECEs plans for growing its export business?
Our growth in exports was around 30% last year, but we are not satisfied as the potential is huge. In the next 3-4 years, our aim is to increase the exports business to around 30% of the revenue. To realize this, we are developing products which will meet global standards.
NBM&CW July 2018
