SANY: Serving the Indian Market
Please share your perspective with us; how have the last 5 years been for the Construction Equipment (CE) and Infrastructure Sectors?
Well, the last five years have been a bit topsy-turvy and at times the growth has been quite slow. The year 2011, in particular, has been quite worrisome primarily because of the fact that the government has not unleashed projects which should have been awarded by now. The government had wonderful Five Year Plans, but they in fact have not been implemented in stipulated accordance. This has left the CE Industry in a spot of bother and manufacturers have been quite cautious. However, I am very optimistic that in the coming months, things will improve and we might witness sustained growth. You see, people in India have now started realizing that they have no other choice but to use modern CE if they want to keep pace with the world. Overall, this is a very healthy sign. I foresee that by April this year, the industry will be in a better shape and CE will again start finding its place.
Back in 2004 – 2007, the CE Industry was reaping rich dividends and profitability was quite high. There was a minor blip in 2008 but with the economy coming back on track, CE also had its share of growth. Buoyed by the growth, CE manufacturers invested quite handsomely in capacities and manpower. However, 2011 again brought a lull! How are companies now coping with this slowdown and how is it impacting modernization of CE?
It has definitely had a cascading effect. As you rightly mentioned, we, as manufacturers, were buoyed by the foreseeable growth and had our plans ready. Considerable quantum of funds was channelized towards capacity expansions and there so much in the offing be it market expansion or manpower. But things have taken a dramatic turn. Earlier, people used to place orders ten months in advance but such trends are vanishing now. Despite this, we are very hopeful that the situation will improve soon; however, if that doesn't happen by 2014 then it will not be a good sign. But as a leading name in CE, we cannot hold ourselves back. We have to move forward because we know that nothing deter the proliferation of infrastructure.
Inflation has given many manufacturers sleepless nights and has virtually spared nothing. In such a scenario, how have you tailored your business model or have you come up with any new ideas to weather off the inflationary impacts?
Nothing much can be done. We have adopted a business model wherein we cater to the market needs. For instance, we have sold 200+ excavators within a very short period of time wherein the focus was market specification. Too much sophistication and modernization wouldn't have been ideal in the current Indian market scenario. This has been noted by our R&D team which is relentless in its quest to study the market trends and requirements thereby coming up with the 'need-of-the-hour' solutions. We developed certain models, out of the primary models which were already there, by bearing in mind that what is the best for India. And we have noted that simplicity of operation, rigid bucket, and fuel efficiency are the features seen first by the customer. Although we are new entrants in India when it comes to excavators, we developed the model suited for the Indian conditions and were able to sell more than 200 pieces. This has placed us in a very good position for future growth and we will develop three more models in the coming months.
There is a lot of competition in the Excavator business and price is a major deciding factor. Are you also playing the price game or going by the punch line that 'our products are better than others'?
First of all, we cannot cut down the price; we have come to the bare minimum. In fact, margins have never been talked during the last two years and survival is the focus. We are not reducing prices for sure but what we are doing is catering the market on our strength. We are providing best suited machines which are tough, productive, easy to operate, and fuel efficient; these machines are backed by consistent after sales support. And all these benefits indeed come at economical prices. So, now the customers have a lot to grab. This is our strategy.
Sany has an outstanding facility in Pune and appointed an Indian CEO who understands all the intricacies of the domestic market. We have a strong Indian team which understands the logic, psychology and expectations of Indian customers. This has a strong bearing on the mindset of the people. As in case of our excavator, wherever it is functioning, we are able to reach the customer in 24 hours or a maximum 48 hours in case of remote areas.
How are you planning to synchronize your businesses; since you are already into concrete and now have acquired Putzmeister?
We acquired Putzmeister since it's a very known name in concrete in the premium segment and Sany itself is one of the leading players in the concrete segment not only in China but worldwide. We said that most part of the world except China only Putzmeister should continue to do the way there are doing. And they take care of the marketing and selling of all models. In India, it will be Putzmeister and same goes for Germany etc. In China, however, it will be Sany. Talking of India, customers will be served by Putzmeister only since now it's the same company.
What about R&D, since Putzmeister and Sany are now merged?
In fact, we have two R&Ds; Putzmeister in Germany and Sany in China. Shortcomings and requirements in Sany are addressed by Putzmeister and vice-versa. That's how it goes. This is ultimately helping the end-user to get a wonderful product.
How are you positioning yourselves in the material handling segment since demand is now less and power projects are also a bit slow?
We have positioned ourselves accordingly. Although the power projects have been slow which has impacted the bigger ranges of crawler cranes (above 200 tons), the lighter ones (70 tons- 100 tons) have had their share of demand from metropolitans such as Bangalore and Chennai where Metro Rail Projects are in full swing. Also, the third phase of Delhi Metro has commenced and we have been able to place ourselves quite strategically in the market. We have sold a number of machines even during this downtime.
It's a well-known fact that diesel costs are shooting up and contractors seek fuel efficiency. However, in India, operators are not trained and certified. How important do you think is operator training and how are you addressing this concern?
We are using modern engines and modern hydraulics and ultimately customers are happy. We feel that training the customers should precede actual delivery of the machine. In fact, we always tell our customers, that if your old operators have been replaced by new ones, you should send them also to us for training. Machines should never get abused. This is our motto!
What new can we expect from Sany this year?
Nothing much, we are waiting for the market to open up to start with. But during this period we are re-strengthening our relationship with customers and focusing a lot on product development.
NBM&CW March 2013
