TADANO in India

Koichi Tadano
Tadano Limited, the Japanese mobile cranes manufacturing major for rough terrain, all terrain, truck mounted and telescopic crawler cranes is a listed company. Set up Post World War II by TADANO family, it has today grown up to a $1.4 million player. Tadano's growth has been driven by the business strategies to grow both organically and inorganically through series of global acquisitions; the major one being through the takeover of Faun's all terrain manufacturing facility in Germany in 1990.The company is now speeding up the process of investment in the strategic markets in addition to the other existing facilities in Europe and USA. Tadano is looking to increase its overseas sales ratio among total turnover up to 80% in long term by increasing the sales from the emerging potential markets notably from India which being one of the prime markets to contribute to its growth. Mr. Koichi Tadano, President & CEO of Tadano Limited was recently in India to make a presentation on the company's business strategies in the country to its existing and other potential customers. P.P. Basistha had an opportunity to interact with the sixth generation family descendent to have an observation of the company's perception on the emerging global cranes market, business structure and its forthcoming business plan in India where the company is contriving for products localization in phases besides looking at the opportunity to promote its different variants and class of cranes primarily ATF series to expand its business in the country. Excerpts:

Having established your Indian operations, Tadano this year is a nodal sales and services subsidiary of your parent company in Japan. What is your business agenda for cranes market in India beyond sales and services?
Having established operations firmly, our present preliminary business agenda is to provide sales and service support to our products and then service support to our new equipment as well as our extended fleet of cranes working in India. We are thoroughly assessing the Indian job site requirements and newer construction metholodgies with the help of inputs being extended by our existing customers. Based on which we will produce custom built products suitable for the Indian construction sector by locally manufacturing high on quality and reliability, yet simple machines characterizing Tadano's engineering standards in due course of time. The product would be based on our '3 Cs' concept which means Creation, Contribution and Cooperation.

We will earnestly impart training to contractors on the operational features of the equipment in order to ensure optimum equipment uptime and return on investment.

I would like to mention here that rendering adequate service support is vital for us, which has been one of the prime reasons and we opted to part from our exclusive distribution collaboration with Telcon. With our independent entity now in India, we will surely be able to impart due focus on sales and service.

How do you perceive demand shaping up for all terrain(AT), rough terrain (RT) and truck mounted telescopic cranes, the core product line of Tadano, in the major markets of Europe, US, Middle East, Africa, Latin America, and Asia during 2012—13?
Currently, the overall situation of enquiries and order placement by customers are going strong and steady. As there has been shortage of big capacity cranes in the market, we have just released 400t all terrain cane, ATF400G-6. Despite the continuous decline in European market, we foresee demand to firm up in next 3-4 years, led by energy industry centered North American market whose demands are maintaining good prospect. At the same time, it is also possible that the competition will get tougher with the rising value of yen.

Forecasting the firm demand shaping up; what will your strategy be to tap the potential markets?
We have segmented the potential markets into two parts. The first one is the markets of Europe, US and Japan which we call core market. As these markets are cyclic in nature, we don't expect further growth. The second one is the markets of India, Brazil, China, Middle East, South East Asia and Latin America which we call strategic market. We expect sustained growth of demand for our products where we will make phase wise substantial investments.

Tadano India Pvt. Ltd.

Do you find the slowdown in demand in major markets that keeps reducing the delivery schedules in turn pulling down or at least keeps on checking the units prices of cranes in mid- and long-term across the tyre mounted class variants?
It is really difficult to forecast the emerging demand order for tyre mounted cranes and otherwise. Nonetheless, the pricing will be strongly determined by global factors. Demand of new units in Japan to help in project reconstruction on the backdrop of tsunami devastation is likely to be 1600 units during 2012 fiscal year (from April 2012 to March 2013) from 1200 units during previous years. Apart from the European and other cyclic markets, we do not foresee any sharp drops given their strong demand fundamentals and requirement for new, quality, reliable and safe products.

What are your important business areas and related corporate philosophy in terms of making inroads into the strategic markets, developing eco-friendly products, enhancing cost competitiveness and improvement in quality and services and globalizing your organization and its human resources?
Recently, we have sped up our investments in the strategic overseas market by establishing a new manufacturing facility in Brazil, a new sales unit in China, supplying OEM to a crane maker in Russia, and a new truck loader crane manufacturing facility in Thailand. We expect these investments to contribute to our company revenue soon. Based on emerging and complex market situations across the world which seems to have become the norm, we will keep carrying out total quality management and groom our people for addressing the future growth requirements.

A word about your parent company, its manufacturing facilities, their locations and products range being manufactured.
Our flagship facility in Japan manufactures, rough terrain cranes, aerial platforms and also certain capacity of all terrain cranes for the domestic markets and truck cranes for the international markets. Our TFG facility in Germany manufactures all type of terrain cranes. The American (TMC) facility makes telescopic crawler cranes, and China (BQ-Tadano) makes truck cranes.

Are the cranes manufactured keeping the standards of the individual markets in view?
All our cranes are manufactured considering the requirements of the markets. However, all our products on a macro level incorporate Tadano's engineering standards known as SQE (safety quality and efficiency) and TAS (Tadano Anzen Standards). The critical parts involving booms, hydraulics, turn tables and others are manufactured according to the aforementioned standards. Products in India will also be manufactured of same standards.

What is your overview of the cranes market in India both in short- and long-term? Which infrastructure segments you would like to address more proactively in order to establish your strong presence in the cranes market in the country?
Either in the short-or long-term, we are expecting demand of cranes, precisely in the higher capacity to become firm in India. We are sure that the customers in India will recognize the benefits of using our mobile cranes in an increasing way in their jobs.

Tadano Crane

As far as infrastructure segment is concerned in India, we are focusing on all segments but we are especially more interested in the energy sector, one of the key demand sectors of mobile cranes. Tadano cranes have been appreciated by global contractors in energy related projects for their higher reliability as compared to contemporary product offerings. This is as because the products have higher equipment uptime. I hope that the Indian customers will definitely be able to recognize the similar benefits being offered by our cranes thus enabling to us establish our presence in India.

A gradual trend is being observed by the Indian construction equipment market to move away from price sensitivity to value added products and services. But the process is still slow. How would you like to sensitize value addition attributes as important factors to mitigate price sensitivity aspects?
Currently, what we perceive that India is using the cheaper variants of mobile units identified as 'pick-n-carry cranes' which have restriction on productivity. We propose to place reliable products with higher equipment uptime backed by adequate service support, even for the upcoming EPC projects that is well likely to mitigate the price sensitivity aspects of our products.

Do you find rental costs for tyre mounted units (AT, RT and TM) to be low across the globe with more used units getting released in the market? What are your observations for the Indian market?
What I perceive is that rental costs to be stable in the global markets as because there is demand for equipment in Japan for reconstruction of the tsunami hit zones. Besides, there is demand in Middle East, South East Asia, for development of the energy sector. New regulations across the world on emission, quality and safety have become more significant. These facts are making the customers prefer new machines, which are likely to keep rental rates stable. The same is likely to be the case for Indian markets. Any way, we find that there are still demands in India for used equipment.
NBMCW November 2012
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