TEPL: Assuring Value for Money
As Terex Vectra takes new avtar asTerex Equipment Pvt Ltd (TEPL) – what is expected from this, in terms of further fine-tuning its business operations to deliver better and superior value to all those who have been dependent upon and working with it?
India is one of the top priority markets for Terex Group. According to various sources, India will need an infusion of nearly $1 Trillion investment during 12th Five Year Plan (2012–17) to build more airports, sea ports, highways, power plants, railways, and dedicated freight corridors etc. Hence, there is lot of opportunities for capital equipment manufacturers like us to exploit. We sincerely believe that overall earthmoving industry in India will grow by at least 10-15% over the next 5 years. Keeping this in mind, Terex certainly wants to ride the bandwagon and be a part of this tremendous growth story. We have increased our investment levels catering to burgeoning Indian market. In the joint venture with Vectra, we have increased our share from 50% to 99% last year, thus laying the foundation for bringing in advance manufacturing technology and processes. In addition, we have set up another state-of-the-art facility at Hosur, near Bangalore, which is spread over a huge area of 45 acres. We are also revamping our product portfolio as we see a strong demand for heavy productline in forthcoming future.
In its new dispensation, what would be Terex sales strategy –value based or premium product based marketing to further lift its market share?
We, at Terex, believe that it is the value for money concept that a typical wise Indian customer is concerned with. He definitely prefers paying more once he is confident on quality and reliability of equipment he has chosen but at the same time, only those features are interesting to him that he finds add value.
What is the product range of the company, its present market share in various categories of construction equipment products? How does Terex propose to enhance its product line in times ahead?
TEPL, at present, is in manufacturing of Backhoe Loaders, Skid Steer Loaders, Lighting Towers and Wheeled Loaders. The new range of backhoe loaders – TLB 740S with 76 hp Kirloskar engine and TLB 844S with 90 hp Kirloskar engine - is a result of continuous upgradation in innovation and technology. In compact loader segment, we are manufacturing HEMAN 175 Skid Steer Loader, having option of 65 hp or 80 hp engine, making us the only local manufacturer in this space in India. This machine, which has more than 50 standard attachments, is more like an engineering marvel. Further enhancing its product offering to Indian customers, Terex recently introduced RL 4000 Light Towers, which address the requirement of construction houses and builders to work efficiently even during night time. With advance features like powerful 4000 Watts of output from Metal Halide lamps, 360 degree tower rotation and 30 ft tower height at full extension, this machine is suitable for all kinds of illumination needs of our customers.
Till 2015, TEPL has ambitious plans for quadrupling its top line from present levels. To achieve this target, we have already put a strategy in place, which mainly involves introduction of new product- line comprising Soil Compactors, Wheeled Loaders, Site Dumpers, and Midi–Excavators. We are also in process of expanding our distribution network aggressively in order to cater to the needs of our ever increasing customer base.
Backhoe Loader is one of the main products of Terex. In the present scenario, its market is set to grow with many players rushing to improve its technical attributes. How Terex Backhoe Loader would be differentiated in terms of quality and technical superiority to attract the growing market for this to stay ahead of others?
Terex Backhoes, TLB Series, perform faster while digging and loading at lower operating costs, with durability through quality and technology innovation. The major highlight of this product is fuel efficiency through unique SmartUC Hydraulics. These products have been developed in India for Indian market from application and maintenance points of view. These machines are almost completely indigenous. Tougher, stronger structural parts such as boom and dippers, heavy-duty stabilizers with adjustable wear pads have been introduced to achieve longer service life than competition in Indian tough applications. Improved protected hose routings and other hydraulics are designed in segments to achieve lower replacement costs and longer uninterrupted working.
How would you foresee the future of construction equipment market becoming more competitive and more expansive? How would Terex handle the emerging stiff competition and at the same time remain price competitive despite rise in the cost of production due to a variety of reasons already known?
We are quite confident that Indian CE market will grow by at least 10-15% on annual basis for next 5-7 years. This is on the basis of renewed economic activity around the country and the focus on nearly all kinds of infrastructure. This is why more and more global CE manufacturers are queuing up for getting a slice of India's growth story. Terex is very well aware of the challenges with increased competition. To address these challenges, we have already put an India centric strategy in place. We are bringing in more advance technologies, processes and systems to make our manufacturing leaner and more efficient. We are also focusing on value engineering of our products to offset any increase in raw material cost.
As Terex proceeds ahead, how the availability of products and services and customer support would be strengthened with new market routes, effective dealership and outlets placement and associated market initiatives?
As mentioned earlier, Terex Equipment, even though being a new entrant in Indian CE industry, has been able to establish a vast distribution network all across India and neighboring nations. The company has 49 committed dealers who sell, service and provide parts round the clock with the help of a work force of over 600 trained engineers and technicians. However, as we see a spurt in demand for Terex products in coming times, we are continuously enhancing our distribution network which includes adding branches to existing dealerships as well as appointing new dealers at strategic locations. We are also initiating aggressive marketing campaign with major focus on rural and semi-urban markets.
How proactive Terex is to HRD so as to equip its manpower with new knowledge, expertise and skill to deliver good business value to the company as well as to its clients?
The success of Terex in India can be attributed to the two main factors – excellent work environment at our workplace and indelible trust of our customers. We recognize that to accomplish our goals, we need diverse perspectives and inclusive work environments that enable us to attract, develop, motivate and retain the very best people of the industry. We believe that being a great place to work means creating the kind of workplace where great people can do great things. This is why we continuously formulate policies with main focus on enhancing employee skills and motivation levels.
Diversity at Terex is about respecting and embracing more than our tangible differences, like gender, ethnicity, national origin and race. We also value diversity of thought, experience, culture, background and style. It is those unique characteristics that make each Terex team member a vital contributor to our competitive advantage. We celebrate that every one of our team members brings something unique and beneficial to our workplace. Due to these attributes, we are able to roll out the best machines in terms of reliability and performance which eventually wins the trust of our customers.
Buying new equipment on upfront payment is becoming very difficult. Are there schemes at Terex's end to tie-up with financial institutions, banks to provide relief to the buyers, dealers and others?
As Terex is relatively a new entrant in Indian CE industry, we are facing a lot of challenges in terms of financing of our machines esp. in cases of FTB or FTU. However, to bring relief to our customers and business partners, we have recently entered into an exclusive finance tie-up with one of the leading private banks of India. Due to this arrangement, we have been able to bring down the lead time to process a finance proposal drastically. Our finance arm, Terex Financial Services, is actively exploring other opportunities where we can have similar kind of agreements with other leading financial institutions in India.
Do you think that used equipment and machinery coming in the country through import concessions need to be regulated with regard to its quality, age and performance?
In India, the imported machinery can easily be RTO registered anywhere without the need of adequate testing at state transport authorities in different states, while, the machinery manufactured in India has to be tested as well as registered – this naturally does not provide level playing field for Indian manufacturers. Hence, we will urge our government to look at this matter seriously and lay down stringent norms in terms of quality, performance and age of material for imported machinery esp. from China.
What is the business road map of Terex visualizes over the next 2-3 years given the fact that onwards margins could face headwinds from input price increases, rate of interest and taxes?
We believe that, in order to garner and maintain a respectable market share in India's competitive CE market, we need to relentlessly work on improving our systems and provide "Value for Money" products to our customers. This is the combination of efficient processes and product differentiation which will keep us afloat in challenging times. Also, last but not the least, ramping up the product range will enable us to manage our input costs more efficiently.