SMC–From Product Focus to Customer Focus
Infrastructure industry is a booming sector today and is witnessing unprecedented growth. How do you see the future of Indian Construction Equipment Industry vis-à-vis this boom of infrastructure development?
The present market scenario is very promising and conducive for business in infrastructure sector. It is gaining momentum and the growth rate now is 15%-20% per annum. This rate of growth in the construction equipment sector is expected to continue for next four to five years. The industry growth rate is directly related to the economic growth of the developing country, which is a major factor for infrastructure growth. The other factors influencing the growth of the industry include the amount of road works, irrigation and power projects including construction of dams, bank interest rates, the mining sector growth (coal, iron ore, etc.) and the rural sector development. With the present emphasis on creating physical infrastructure, massive investment was planned during the 10th plan.
For instance, Rs 1400 crore was provided for four-laning of Golden Quadrilateral project of National Highways Authority of India, the outlay for national highways development was increased to Rs.9320/- crore for 2005-06. With the Government of India’s sustained budgetary allocation and more funding by international and multilateral development financial institutions for infrastructure development, it will indirectly result in increased demand for construction equipment.
As head of manufacturing, how do you envisage current and future growth vis-à-vis in the recent past of products in terms of models, volumes etc. ?
We have presently about 30 models of equipment and nearly 300 of the equipment are produced and in operation all over India and abroad. We had started the manufacturing operations in June 2003 and in the first year about 20 equipment were manufactured. In 2004 about 55 equipment, in 2005 about 90 equipment and in 2006 we have already completed about 200 equipment till date and the target is to touch 300 equipment. One of the biggest focus now is wheeled mobile crushing plants. These type of plants are being offered to global market as well to Indian market. Scorpion and Roadmaster brands of wheeled mobile plants have been a big hit in all markets of aggregate and Iron ore. The equipments are being exported to Dubai, Oman, Spain, Albania, South Africa, Ukraine etc. from the Pune works. The present expansion is aimed at increasing the volumes crushers and feeders to the global market and make India hub for supply of jaw crushers.
With construction market becoming increasingly global and India becoming a major market in the construction segment, how does Sandvik blend its global policies with Indian market to serve here?
There is infrastructure boom all over the world today and the Asia-Pacific zone is one of the largest and fast emerging markets. This region has acknowledged that the infrastructure growth and all round development go together. The focus of Sandvik Company’s philosophy is customer. We have constantly partnered our customers in every critical stage of product design, innovation and development. This approach has helped us to serve customers to the optimum. We are amongst few global players in our industry that continues to invest 4 per cent of sales towards R&D every year. SMC has been in existence in India since January 2000. It is recognized by our customers in India as a manufacturer of high quality technological products. This is amply demonstrated by the two manufacturing facilities in Pune and Hyderabad. Not only have these units served the domestic market but also act as global sourcing bases. Additionally, new products are being designed and manufactured in India adhering to international standards.
Moreover, Sandvik has also designed and successfully implemented systems and processes that have been instrumental in creating unique value based marketing channels across the globe for our diverse product portfolio.
How is Sandvik Mining and Construction planning customer focussed market level activities to compete in this era of infrastructure boom which is a highly competitive market?
As SMC has moved from product focus approach to customer focus approach, we are planning a great relationship building exercise with the customers. Our relationship starts with their needs which guides our Research and Development. We promise maximum productivity and maximum profits to our customers. Our activities to familiarise existing and potential customers with our modern high technology products include participation in road shows, seminars and exhibitions in key strategic markets across India with a three-fold focus on reaching and interfacing with the trade, our customer (existing and potential) as well as the Industry at large.
We have a Training Academy at Pune for training service engineers. This is a two year open ended programme for fresh Diploma holders where they are trained to service, operate and maintain rock drilling, excavation, hauling and crushing equipment introduced by SMC.
The concept of key account managers, ‘after market’ product line and proven ability to be the solution provider to clients world wide demonstrates our commitment and indication of market level activities to be deployed in future.
What are current growth drivers for SMC in India? How does SMC see the evolution of the Indian market?
India is one of our key markets and going forward on our plans, we see huge potential in the following areas:
- Highways
- Hydro-electric projects
- Mining
- Telecom
Moreover, we have stakes in large steel projects coming up in Orissa, Jharkhand, Karnataka, Chattisgarh, viz. Posco, Tata Steel, LN Mittal, Jindal Steel and Power Ltd., Jindal South West, Essar, Bhushan Steel, Ispat, Sterlite, SAIL, MSPL, etc.
Also, the fast pace of growth in telecom industry is driving the need for quick and efficient laying of fibre optic cables. SMC’s forte here is in providing trenchless drilling tools without the need of breaking up roads, resulting in saving of time and cost.
How the Government policies, major projects deployed in the offing and other favourable factors likely to contribute to SMC’s growth in the Indian market.
A. SMC recognizes India as one of the leading emerging markets with tremendous potential in the infrastructure sectors such as roads, highways, hydro-electric projects and mining, SMC would like to be a key player in these activities.
For example, in the highway development program, the Govt. is now awarding projects on BOT basis, which has received an overwhelming response. Contractors are now willing to pay the Govt. to build the high quality highways as they are confident of the returns in the long term. High quality roads mean low maintenance cost, which can only be achieved by using modern technology, which SMC offers.
The world wide boom in commodities especially in metal is triggering investment in India for iron ore ,coal & lignite mining and creating enabling infrastructure in ports and terminals for exporting iron ore and importing coal. The reform in power sector is also expected to streamline investments in power plants soon. SMC is fully prepared and has the organisational strength & capability in India to capture these market opportunities.
What is the USP of Sandwich mining and constructon especially when it has to compete with other players in the same sector?
As I have already told you that it is the Research and development which gives us edge over others. SMC’s design capability has provided bulk material handling solutions which are being handled by Voist Alpine. Specialized conveying systems especially for mining industry alongwith the crushing plants are being supplied now by SMC. This is being done at MSPL for iron ore. Value added services like successful implementation of AMC’s in various contracts of crushing and screening and drilling projects is a big feather in SMC’s hat. This can be introduced as part of the answer in any one question. As SMC, apart from introduction of new crushing and screening equipment, we have also developed competence in manufacture and supply of MICROSCOOP, underground loaders. We have already manufactured and supplied from India to France 4 nos. of these loaders and have order for another 10 to be supplied in 2006 and Q1 of 2007. Demand for this equipment in India is also noticed for about 20 machines per annum. Manufacturing facilities in this area are also being augmented Another new product planned for introduction is crawler type drilling equipment especially to meet the demand in countries like India, China and Russia. Design is ready and prototype production is planned for completion by the end of 2006. Regular production of the product is expected to commence in 2007. Demand for such equipment is projected to be around 100 in the first year and expected to grow continuously.
NBMCW October 2006
