Terex - Foresees Emerging Competition as an Opportunity

"Since its inception in 2005, TEPL has been relentlessly working towards providing advance technologies at customer’s door step and that too at an affordable price, coupled with world-class after sales support. We are already in the middle of ramping up the production capacity at our Greater Noida facility and hopefully, will be able to achieve the production level of 2,500-3,000 backhoe loaders by the end of next year. At the same time, we are in advance stage of indigenizing the production of our light tower RL 4000. We foresee that the competition is bound to increase with the arrival of new domestic and overseas players, and see enhanced competition as an opportunity for us to work harder in improving our offering to customers," says Mr. Vijay Sharma, Executive Director, Terex Equipment Pvt. Ltd. in an interview with S. A. Faridi.

It is indeed to the credit to TEPL that within a short span of its operation, it has been able to establish its good credentials in CE market in India. Is it due to its competitive edge, superior technical attributes of its products and services, prudent pricingand above all due to its unique work culture?
Since the start of Indian operations in 2005, Terex Equipment has been relentlessly working towards providing advance technologies at customer’s door step and that too at an affordable price, coupled with world class after sale support. We are allocating a good portion of resources in developing “Value for money” by providing superior products to our customers. Our strong distribution network is instrumental in providing round the clock after sale support. As a result, we are building a strong platform of satisfied customers, who swear by Terex as their true and trustworthy partner. At the same time, we are ensuring that our employees become the stakeholders in the whole process of delivering quality products. This was only possible due to our belief in principle of diversity and inclusion where our employees are given equal opportunities irrespective of gender, religion, caste, industry etc.

Would you like to giveour readers a sense ofprogress of TEPL's ongoing ambitious expansion programme at its factories in the country? By whenthese new facilities will become fully operationalto render comprehen- sive end-to-end products and technical services, adding new muscles to its product portfolio?
With the continuous surge in demand for our products mainly backhoe loaders in domestic and overseas markets; we are already in the middle of ramping up the production capacity at our Greater Noida facility. Hopefully, we will be able to achieve the production level of 2,500-3,000 backhoe loaders by the end of next year. At the same time, we are in advance stage of indigenizing the production of our light tower RL 4000.

Apart from expansion of manufacturing facilities at TEPL; what are the other components of the expansion programme in terms of strengthening of its manpower, skill development, together with ensuring products reach and availabilityfrom an effective distribution channels, spare parts support and exploring new market routeswithin the country and in overseas markets?
As mentioned earlier, we are the firm believers in the potential and strength of skilled Indian manpower. At present, we have a workforce of approximately 350 employees who have complete faith in our ideologies and principles. All our employees have undergone rigorous training sessions on product knowhow, organizational behavior and customer support. At the same time, with increase in our sales, we acknowledge the need of expanding our manpower.

How do you see the emerging CE demand in the country in the next 2-3 years? Do you foreseeany serious roadblocks in the way affecting its growth targets?
Overall Infrastructure development is a key building block of Indian economic growth story. Apart from China, India is the only shining star among developed and developing economies, where the scale of investment in infrastructure development has been rising steadily. We firmly believe that this growth bandwagon will continue its march in coming times. As far as CE demand is concerned, we estimate that it will grow at a decent pace of 10-15% for next 2-3 years. However, the product wise share in the total industry might change as there is increasing shift towards high capacity machinery like excavators and wheel loaders.

A word about the emerging competition in the CE marketand TEPL’s strategies to take on the competition head on to stay in the forefront?
With the kind of growth happening in Indian CE industry for the last 2-3 years and the potential lying ahead, the competition is bound to increase with the arrival of new players like Mahindra and Ashok Leyland-John Deere along with some Chinese companies. However, we see enhanced competition as an opportunity for us to work harder in improving our offering to our customers. Our R&D cell is continuously striving to design new add-ons for our existing products and we are quite confident about the relevance of these new features to our customers. At the same time, we are also in the process of adding new products like world renowned Terex Wheel Loader, Mini-Dumper, Soil Compactor etc. in our portfolio.

In Indian market scenario, what propelsthe market—CE price, quality, and brand or value additions?
The Indian customers are very conscious about the output they get for spending every penny from their pockets. But there is a continuous shift of preference from machine’s buying price to reliability and performance. This is why, we are trying our best to offer a performance oriented product with acceptable quality and that too at an affordable price. We can proudly say that Terex, as a brand, is now considered as a provider of value for money products which deliver reliability and high performance output.

A word about TEPL’s financing and leasing facilities to assist customers to acquire its productsand the impact it has had on its business in equipment financing and leasing.
Our finance arm, Terex Financial Services (TFS), is helping us in providing prompt financial solutions to our customers. Over the last two years, TFS has been instrumental in forging exclusive tie-ups with leading financial institutions in India like HDFC Bank, Tata Capital and many more. Due to these arrangements, we have been able to address the long-term demand of our customers. As a result, our machine sales have got benefitted, especially in those regions where our customers found it difficult to get a quick finance support in earlier times.

Rising input costs, higher wages and higher interest rates are becoming a matter of concern for the CE sector. Do you think that in the next 2-3 years, the situation is likely to improve, particularlythe financing or money becomes less expensive than industry’s inputs?
We completely agree that our input costs are on upswing for the last 3-4 quarters and has become a matter of concern for us. The situation is made worse by the rising interest rates. Thus, there is definite pressure on our margins. As a result, most of the players in CE industry including us were forced to increase the machine prices by 4-5 percent on an average. However, we believe that the Indian infrastructure development story is going to offset this passive scenario. The demand will keep its pace over the next 2-3 years irrespective of rising interest rates and prices.

What are TEPL’s plans to participate effectively in the forthcoming mega event—Excon 2011 to be held at Bangalore during November this year. What are new products and servicesincluding new marketing initiatives proposed to be unveiled?
We are quite enthusiastic about our participation at a prestigious platform like Excon in November this year. We are going to display our complete range of products. The main attraction at our booth will be the presence of new members in our product family- Wheel Loader, Mini Dumper and Walk Behind Roller. We sincerely hope that the visitors to our booth will be getting an incredible experience beyond their expectations.

Do you think that this mega event would pep up the market sentiments?
Excon has always been an essential platform for all CE manufacturers to come closer to the customer. It has been a trend- setter in terms of spreading awareness about new CE technologies available in India as well as across the world. We believe that this edition also will go a long way in promoting CE business in India.