KYB-Conmat Partnership: A Complete Business Make-over Drive

Buoyed by its recent tie-up with KYB of Japan, concrete equipment manufacturer, Conmat is going for a complete overhaul of its business process to enhance its market presence backed by advanced product positioning. P. P. Basistha finds out during his recent visit to the company’s manufacturing facilities in Vadodara, Gujarat.

Mr. Premraj Keshyep, MD, KYB-Conmat is a very busy man. Not quite hard to decipher the reason for his gusto. It is the recent partnership forged between KYB of Japan and Conmat, as he mentions pointing out to one close eyed Japanese Dharma at company’s front office, "We have now set targets to meet, and will mark the other eye open, once the targets are achieved". The on-going preparedness for achieving the targets are evident as one enters the swanky manufacturing facility at Por in Vadodara with trailer trucks loaded with concrete batching plants, painted fresh heading for the market, neatly paved road surface of the plant teeming with workers.

Mr. Premraj says, "We achieved 30% improved sales during 2013-14 as compared to 2012, even when overall demand remained hugely subdued. The feat could be achieved because of our new business plan that has made the strategy for growth till 2020 under the partnership. In accordance with the plan, taken up in a phased manner, we are continuously evaluating our performance and looking to eliminate the deterring factors at our end in way of sales. The company has targeted 7-8 per cent market share in transit mixers during 2014-15."

The partnership has brought in necessary value to Conmat as it provides necessary cash reserves to take on the volatile market. Furthermore, it has allowed it to technically upgrade its manufacturing systems through better backward integration by strengthening its research and development for rolling out products, attuned to Indian job site requirements. Significantly, the alliance has paved the way for Conmat’s preparedness during improved business cycles.

"We have infused Rs. 15 crore for our brownfield expansion by inducting state-of-the-art technologies for creating advanced products based on lean manufacturing and quality control systems involving 5S, Kaizen and Poka-yoke." The fresh investment will enhance production of transit mixers by 500 units during 2014-15 that will be further leveraged to 1500 units in 2015-16 from adjoining Greenfield facility, for which land has been acquired. The new facility will increase builtup space to 1,00,000 sqft from 50,000 at present. While space for complete set-up including R&D facilities will move up to 4,00,000 sqft from 2,50,000, both the facilities will be used for exporting the transit mixers to global market along with serving the domestic markets.

Channelized Investments & Product Bankability

Capital infusion out of the partnership is being directed towards strengthening sales and services set-up. "A major paradigm shift in approach is being undertaken towards appointing new dealers away from the earlier approach where our dealers used to be commission agents. Distributors are being appointed on their ability to add value in sales and services and timely spare parts support backed by their own warehouse set-up, thereby ensuring complete customer satisfaction." KYB-Conmat has targeted to appoint twenty-five dealers across the country. Further, to strengthen its services, it will be adding more service engineers to support the dealers.

Mr. Premraj adds further, "We are looking beyond our traditional Western, Central, North Western and South Western India markets and will also plan to grow horizontally by targeting newer potential markets of Odisha, West Bengal, Chhattisgarh, Uttar Pradesh, and Bihar. We have also strengthened our sales and service set-up in New Delhi. Plans are also underway to set up a new warehouse at a strategic location in the country for timely parts availability."

"We have sold 10 new variants of MR 60 transit mixers to various contractors involved in ready mix concrete business, dam construction and canal irrigation projects driven by slave engine as part of field trials and the response has been encouraging so far. We have been targeting sales towards niche markets like concrete roads, and dams requiring higher discharge levels of concrete," mentions Mr. Premraj.

Mr. Premraj argues, "Compared to competitive transit mixers available in the market, MR 60 cum transit mixers have lower slump and higher discharge performance and can be used for slip-form concrete paving. The transit mixers come with higher safety during transit due to anti-clockwise drum rotation for left side travel in India. Lower centre of gravity for better stability on rough roads."

He claims, "The most competitive technical feature of the mixer is its high speed and discharge performance due to its unique blade design. High precision C-shaped spirals are formed by accurate forming dies, maintaining uniform low resistance flow, hence lower power consumption. C-shaped spirals enhance agitating performance so that concrete could be worked during delays. The drums have low filling levels due to high geometric and water line volumes improving mixing performance." KYB-Conmat has plans to introduce mixers driven by power take-off engines in near future. The company is in talks with various chassis manufacturers for the same. MR 60 is made available on Tata, Leyland, and AMW chassis.

Given an array of concrete equipment product line including mobile and stationary concrete batching plants, new range of trailer mounted concrete pumps, KYB-Conmat may look forward for its transit mixers sales to grow, given its market network and captive customer base created through prolonged market exposure. However, timely product availability and services will be vital to neutralize brand substitution by the customers.