"For Shantui, India is a huge market with bright and burgeoning business potential. In view of this, we have chalked out mammoth plans either in the form of joint ventures or by setting up independent manufacturing units in the country. Already Shandong Heavy Industry India Pvt. Ltd, of which Shantui is a member, has invested $5 million for the expansion in terms of spare parts' stock availability and dealership network and have further decided to make massive investment in the country shortly," says General Manager Mr. Cheng Zhaohong, in an exclusive interview with S A Faridi. Excerpts below.
Please accept our warmest congratulations on launching the first ever largest bulldozer in China; would you like to share your views with our readers on the newly rolled out product?
First, I am pleased to say that Shantui is the leading bulldozer manufacturer in the world and our launch of the SD90-5 represents not just the largest dozer ever produced in China but also the second largest in the world. The introduction of this machine is a major achievement for us as it shows that our company is capable of building a much larger bulldozer and can compete in a market segment where product quality is paramount in ensuring the machine's uptime and operational productivity potential. In terms of innovation, the SD90-5 has Shantui written all over it. That is what we are most proud of.
The SD90-5 boasts the ability to operate in the toughest and harshest environments with great efficiency. With global environmental regulations and engineering practices constantly changing, the SD90-5 adapts itself well to different methods of mining and earthmoving. Featuring a rear-mounted hydraulic ripper arm, the SD90-5 is well-suited for agitation-methods of mining, while the 45-cubic-meter blade capacity is excellent in clearing any stony debris. Furthermore, its K-type floating rollers and auto-locking torque converter give it the added efficiency to handle any water conservancy, earthmoving or demolition task with the utmost of ease.
In total, the SD90-5 sets the bar for Shantui as an unmatched engineering marvel and hopefully will go a long way in advancing the construction equipment industry as a whole, especially in developing markets where the newest product would be an opportunity to make the most out of its unmatched efficiency and productivity potential. With this product joining our construction equipment armory, we hope to establish ourselves as the number one name in bulldozer manufacturing segment not just in China but across the world.
Kindly name the markets where the newly launched product would be made available for your customers.
After the SD90-5 completes all the mandatory testing processes and goes into production, it will be offered first in China and then to the global market place.
In view of the huge infrastructure business opportunities opening up in India, where the government has targeted to invest $1 trillion in the current Plan period in the infrastructure sector, how do you view your growth prospects during the 12th Five Year Plan period in your country?
No doubt, India is a huge market with bright and burgeoning business potential. In view of this, we are now fully concentrating on the Indian market and have laid big plans either in the form of a JV or by setting up independent manufacturing units. We have set up our office last year in India where officials are currently carrying out a detailed study of the requirements of equipment in the Indian market. Based on the outcome of the study we will take further decisions on whether to produce equipment locally or to import from our parent company in China. In short, we have already taken a decision to make massive investment in India, but a final decision on this score is still waiting.
What types of products are you currently exporting to India?
Currently, we are mainly exporting bulldozers, for which Shantui is known the world over. But as we enter into a new era, which we call our Diversified Product era, we have planned to introduce a fully diversified line of earthmoving, road construction machinery, cement machinery and cranes into the Indian market and want to see how they are performing there and how they are suitable in emerging market environs. Also we want to see how best we can serve the customers there.
Currently, the customers are invariably concerned about the after sales support mechanism including easy availability of the spare parts. In view of this, please dwell in detail on your future plans to set up an effective pan-India services and support systems.
We always localize in such a way that best suits the market requirements. Our commitment to value and customer service makes us a strong brand around the world. Every market is different, and we work hard with our local partners to best serve our customers in terms of after sales support services and spare parts availability on a timely basis.
Currently, in India we are looking to expand our dealership and distributorship network to provide round-the-clock services so that we have an edge over our competitors as this is an important element for the growth of a business. Already, we have invested heavily in the country for the expansion in terms of spare parts' stock availability and dealership network. Second, we are also busy studying the bottlenecks hampering our growth in the country. In fact, the company is going all out to resolve all these issues as quickly as possible because for 2013 it has targeted to have over 200 Shantui machines working in the Indian market and in terms of business volume, we are looking for 20% increase on year-on-year basis.
Besides, to ensure quality maintenance, we are imparting training to our local partners based on international systems so that they, in turn, can provide the best possible services to our customers. Furthermore, the process will also cut down the acute shortage of skilled manpower in the country.
India is a quite price sensitive market; how do you serve the country where contractors and builders scout for both reliable and cost-effective products?
India is a very interesting market in terms of price sensitivity. We have created our slogan ‘Value That Works,' so our products offer great value with performance-proven results. We are better able to control quality and costs and hence, provide a unique balance of quality, cost, and performance. Moreover, for Shantui the voice of the customer is very important so we ask our dealers and distributors to offer rates depending on market conditions and competition.
Would you like to share your views about Shantui's global operations, its manufacturing plants, range of products focused business areas and regions it has fixed on its future business radar?
Shantui, a multinational construction equipment manufacturer based in Shandong, China, has more than three decades of professional expertise in the production of heavy construction equipment. The company is not only the world's largest producer and seller of dozers but also offers a highly diversified range of construction machinery from wheel loaders and excavators to graders, rollers, pipe layers, cement trucks, forklifts, and so on.
Currently, the company has five separate factories including Shantui Assembling Factory, Shantui Undercarriage Parts Factory, Shantui Torque Converter Factory, Shantui Industrial Trading Co., and the Japanese and Chinese joint venture Komatsu/Shantui Construction Machinery Co., Ltd.
Shantui's annual production capacity for bulldozers is 15,000 units, along with 2500 units of hydraulic excavators, 7,000 units of road machinery and5,000 units of concrete machinery. According to statistics, our bulldozers dominate the Chinese market where they account for nearly 70% of heavy-duty machinery market. In addition, it is exporting its products to more than 150 countries across the world.
This is for the first time when China is witnessing a 47% slump in the demand of CE at home which means a complete revamp of your marketing strategies and production planning. Please share with us that how you are coping up with the situation?
Ups and downs are all parts of the business and we are well equipped to handle such situations.
We entered into the overseas markets in 1986 and at that time we had very limited global market share as compared to domestic one but currently we have good hold on the international markets as well. We now know how to handle the worst situations. As per the market scenario and demand trend, we customized our products and also added more value to the product line. As required, we also considered from a managerial point of view how to cut costs which is an important factor kept under consideration when buying equipment.
What about Shantui Group's turnover for this fiscal?
It is same as last year but the exact figure I would be able to tell you only at the end of this year. As of now, we have noticed that it is around $2 billion.