"Sandvik is one of the world’s most accomplished suppliers of crushing and drilling equipment and solutions to the mining and construction industries. Sandvik’s offering is one of the market’s most advanced and complete products range and a solution approach that contributes to increasing our customers’ profitability. Our partnership concept basically means that our customers will always find us available to discuss their challenges and what keeps them awake at night. We analyze and solve the problems together. This approach will lead to improved productivity, lower cost and better profitability. ‘Serving’ is our guiding motto. We will continue to make investments in India to keep growing with our customers," says Mr. Simon Meester, President, Sales Unit Sandvik Mining and Construction, India, in an interview with S.A.Faridi.
Current calendar year is about to be wrapped up; what are the emerging business trends? Based on company’s strong economic and technical fundamentals, what would define company’s revenue growth in next two years?
The growth driver is infrastructure such as Road, Bridges, Highways, Expressways etc. Sandvik equipment (crushers, screens, drill rigs, breakers, etc.) are engineered for maximum productivity. Because of India’s rapid growth and need to urbanize, there has been lot of urban infrastructure projects that took off simultaneously in recent years and much more is yet to come. These gave rise to the demand in the market for equipment both from major and small players. For crushers and screens, we offer advanced, rational solutions for any size-reduction challenge, stationary or mobile. We have established ourselves as market leaders in Hydraulic Top hammer and DTH drills. In order to maintain our market lead, we listened to our customers and put into practice many new solutions, leading to lower operating costs, fuel economy, reliability in operation and easy maintenance, combined with improved operator Health & Safety. We have upgraded existing plants, and provide complete solutions and deliver turn-key installations. We also supply key components and a wide range of consumables. Our customers are under continuous time and cost pressure. Our aim is to help them to improve their profitability and to help them to satisfy their customers.
How much does Indian operation help Sandvik’s international business and its contribution to Sandvik’s global top-line?
India had established itself as the world’s second-fastest growing economy. Though India is still an emerging market and growing for the short-term but it will be a dominant global market for the long-term. In the next few years, the Indian market will move beyond the emerging market size and will definitely be an important player in the global economy. So, India’s contribution to the company’s global top-line sales will significantly increase year on year basis.
From time to time, the company improvises equipment rangeand customizes the sameto local market. What has been the market response to some of these product launched recently such as new impact crushers, three way split screen, drill rigs and range of new breakers and others in terms of serving customers felt needs and proving their utility?
Sandvik is one of the world’s most accomplished suppliers of crushing and drilling equipment and solutions to the mining and construction industries. The challenge to lower the cost per ton or meter requires a thorough understanding of the customer’s process, combined with the best products. Our high level of availability and in-depth knowledge of customer processes gives us a substantial competitive advantage. Sandvik’s offering is one of the market’s most advanced and complete products ranges and a solution approach that contributes to increasing our customers’ profitability. Our partnership concept basically means that our customers will always find us available to discuss their challenges and what keeps them awake at night. We analyze and solve the problems together. This approach will lead to improved productivity, lower cost and better profitability. ‘Serving’ is our guiding motto.
What are the systems in place for synthesizing inputs from company’s R&D set up, customers’ response and its well established market network on product development and customization?
We are an engineering company and consequently spent significant sums on R&D. Kindly refer to the publically stated figures of the group as to the precise global percentages. Our focus is on designing and producing equipment which are productive, efficient, safe to operate and reliable. This is being of the utmost importance, the most evident trend in recent times is the move towards mechanization, electronics and standardization of quality norms. This comes hand in hand with enhanced productivity and enhanced output. Our Customers are constantly pushed to deliver higher quality work, faster, and our machines help them doing exactly that.
With emerging opportunities in the construction and mining sector; how is the company equippedto roll in further new generation products and services to part take in this growing sector? What are concept products awaiting to be developed?
As mentioned earlier, Sandvik is one of the world’s most complete suppliers of crushing and drilling equipment and solutions to the mining and construction industries. Our high level of availability and in-depth knowledge of customer processes gives us a substantial competitive edge. Our focus is on designing and producing equipment (crushers, screens, drills etc.) which are energy efficient, productive, safe to operate and reliable. We offer solutions like continuous mechanization, enhanced productivity, lower energy consumption, etc. that contribute to our customers’ productivity.
Aftermarket for mining and construction equipment has grown at an impressive rate, but we still have significant growth potential in our other core applications of Exploration, Materials Handling, Blast Hole drilling, and Mining Crushing and Screening.
You have a long and exciting experience in developing and marketing Sandvik products and servicesin the global market. How would you compare India with other markets? What are the challenges in promoting products – price, quality, brand, total product cycle and after market initiatives as different in India?
We know that India will be one of the biggest markets in construction. The Government is planning significant investments in infrastructure development. So we are very positive about the growth potential here. Compared to western countries, the Indian market is not saturated and there is ample room to enhance productivity through mechanization. India is fast growing and is catching up rapidly with the rest of the world. The fact that India is a fast growing economy means it is a very attractive market. Though a little traditional is terms of mechanization and equipment utilization but we see change is happening. At the same time, customers are very tuned in, so it is a competitive market, just as it should be.
The year 2011 started with hopes of CE sector growing at 20%. But now there are concernswith slowdown trend emerging in. Will it drastically affect India CE growth story, given the national and international economic headwinds looming large. Do you envisage any impact at your end in changing your goal posts?
I am very optimistic that India in the years to come i,e in 10 years from now, will have surpassed the status of an emerging economy and will have positioned itself as a leading superpower. India is already witnessing a tremendous surge relating to infrastructure development. Public sector investment coupled with private sectors innovation will definitely give impetus to the growth for roads, ports, hydro and power projects. The next ten years will definitely change the entire outlook of the industry. We can see the vital signs of future growth in procurements. We are not too concerned about the short-term economic volatility. India remains a sure thing for the long-term and we are here for the same.
Is the present business environment in India consequent upon reforms compatible with emerging business global realities? Will it entice investorsto invest in country’s growing construction and mining sector?
Managing India’s economy is a delicate task. There is high inflation and the need to bring prices down but at the same time, there is a requirement to propel growth, to increase employment and to do it in an environmental friendly way. Of the emerging economies, I think that balance is most clear in India. Investors will recognize sustainable growth. India is indeed a tough place to do business, however, despite all the challenges and uncertainties, this country is and will continue to be one of the most important nations both strategically and economically.
Any new investment plan at your end to invest further in India, keeping the growing business prospects in view in the construction and mining sector?
We will continue to make investments in India to keep growing with our customers. As I mentioned earlier, the economy is growing, our customers are growing, so we will need to grow with them. We will announce specifics plans in due course.