JCB Geared to be a Multi Product Company

JCB Geared to be a Multi Product Company
"With the opening of the state–of–the–art new plants, JCB is geared to establish itself as a truly "multi product company." JCB India will be the Asia Hub and setting up the Pune plants is a step in that direction," says Mr. Vipin Sondhi, in an Interview with S.A.Faridi and SKK.

JCB is a fast becoming household name in the country with its machines at work in roads, construction sites, at rescue operation sites, garbage handling, and even in farm operations. Recently, the company launched 3 world–class machines. What are JCB’s future plans to strengthen this image through manufacture of more such versatile products through expansion to serve the national infrastructure and social needs?
JCB is the fastest growing construction equipment manufacturer in the country. We have always been credited with introducing new concepts in the construction equipment. In the late seventies, we introduced Backhoe to the Indian market and in the recent years we have introduced “Load all” in the market. Our investments in shape of setting up of two new plants in Pune and expansion project at Ballabgarh underlines our commitment to contribute in helping build India’s infrastructure.

Recently, JCB opened its new heavy line plants in Pune. What does it mean to widen JCB product portfolio, domestic market share and exports?
JCB Geared to be a Multi Product Company
The manufacturing facilities at Pune comprises two plants. Plant-1 is a component manufacturing and exportoriented which will cater to the needs of JCB factories both in overseas and partly in India (based on JCB's world-wide guidelines). Plant II is a heavy line manufacturing plant i.e. Excavators, Wheel Loading Shovel, and Compaction Equipment.

With the opening of these state–of– the–art new plants, JCB is geared to establish itself as a truly "multi product company." JCB India will be the Asia Hub and setting up the Pune plants is a step in that direction.

With advancement in technology, newer machines have come into construction sector. But skilled and unskilled professionals to handle these machines are becoming a rarity. What could be done at the macro and micro level to cope up with this situation? What are JCB's initiatives to tide over this problem at its end?
Construction equipment Industry is one of the largest employers. Industry estimates put the need for trained operators at 0.3 million by 2015. To bridge the requirement of trained manpower (technicians, operators), government and the industry need to join hands and work together to provide facilities and need based training to improve the skill level of manpower, it involves major investment in opening and upgrading our ITI and training institutes in rural and semi urban areas.

As industry leader JCB has been setting up operator training schools across the country. It is not only helping in generating employment but, also involved in skill enhancement as the operators get to know about the latest safety features, operation, and maintenance of the machine as well.

In a market like construction equipment where constant innovation and fierce competition are changing the rules of the game, what is the pricing policy at work at JCB to price its products right at the very first time. Does the company believe in the benefits of high volume, even at a lower per unit price, to build a wider customer base for its products and services?
India unlike the developed countries is still dominated by price focused and value focused customers. Even though the percentage of feature focused customers is increasing they will continue to be well below the world average of 50–60 percent. (Source: Mckinsey report). A sizeable number of customers are first time buyers and increased mechanisation is leading to increase in volumes. JCB is constantly providing customers with India specific products while conforming to world standards at best prices.

Construction equipment industry in the country has reached a stage where enabling policy provisions would help to put it on fast track. Is there a need to have an apex body of the industry to pursue such provisions at the policy and implementation level?
There are certain bodies like the CII – capital goods committee, CIDC, IECIAL, etc. which are involved in putting up the industry issues to the Government. This needs to be continued with greater emphasis so that the policies are framed keeping in mind the recommendations made by the industry.

What could be Wish List of the industry for the new Budget to take care of its problems relating to reforms in tax regime so as to rationalize the same?
The foremost thing which needs to be done is to rationalize the tax structure across the country. Manufacturing taxes across the country range between 21– 38 percent with an additional burden of sales tax up to 8 percent which is one of the highest in the world.

How do you look at a Forum like Excon to promote technology transfer, business and related collaboration? What was focus of JCB’s at this exposition in terms of new launches?
EXCON has become the showcase event for the construction equipment manufacturers in the country. New concepts are showcased by the original equipment manufacturers (OEMs). In addition to this, the conference organized on the sidelines allowed industry captains to discuss and share opportunities and threats faced by the industry. JCB also used this opportunity to showcase new products. In Excon 2007, we showcased the entire range with specific focus on our heavy range of equipment namely excavators and wheel loaders as well as the newly introduced soil compacters and asphalt rollers. We had a display of a dedicated parts and service area in the JCB pavilion where we promoted the usage and benefits of genuine parts and its impact on the longevity, productivity and performance of machines.

As the largest construction equipment manufacturer in India, we underlined our status as a one stop solution for all construction equipment needs.

What could be the impact of slump in the US construction market on the development of construction equipment market worldwide in general and on Indian construction equipment in particular?
The slowdown in the US construction equipment market has been offset by the growth of other markets. Even European and Latin American countries are projecting growth in double digits. On the other hand, the net impact of the crisis in US mortgage markets would be a contraction of credit by two trillion dollars in the global system. Infrastructure projects need large amounts of long-term debt that domestic markets cannot supply. If there is a problem with external borrowings, it is bound to have an adverse impact on infrastructure investment and capex plans. However, clarity is still to emerge.
NBM&CW January 2008
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