Terex– Upbeat on CE Sector's Growth Prospects
Industries' wish to have stable government at the centre to attract more investors is fulfilled now. How do you see the growth of construction equipment industry in the wake of new government in general and your company business in particular in the next few years?Ground level forecast by our sales team suggests that the demand curve has bottomed out, and we can expect an uptrend. We are optimistic about state and central projects pulling up demand provided land can be acquired for such projects. We will watch how things unfold over the next 6-9 months. In the eventuality of a weak monsoon, quick government action to launch counter measures would pull up activity in the short run. But the consequential fall in rural incomes could be a cause of worry. However, the next few years are expected to bring good business growth for the CE industry. We expect our sales to record over 15-20% growth. Managing our bottom line is an altogether different challenge.
India is a land where there is an ample scope of infrastructure development which can result in demand for construction equipment. But for this, we immediately need good governance. What are your expectations from the new government in terms of policy reforms, project clearances, financing and transparency in the system?The issue of land and its acquisition and declared land use coupled with fair compensation & rehabilitation of land owners is a very tricky issue. Besides, sorting out technical issues arising from the above, the Govt is expected to act in a much more ethical & transparent manner. Acts / rules & regulations related to land and related issues need to be carefully drawn out by taking in views of all stakeholders. We hope that the new Govt will be sensitive to the needs of the industry & will take decisions in time under a clearly defined and stable policy framework. This in itself will be good enough for us to firm up business plans for the next 3-5 years.
Terex has targeted to achieve 10-12 percent share in backhoe segment. What are your plans and strategies to achieve the targeted growth?We are not only motivated to get there but also are standing on firm footing and in line to hit the target of >10% market share by 2015. A mix of agile marketing strategy coupled with visionary leadership of our management team is helping us move forward in this direction. We are currently implementing a major overhaul of our distribution network by adding dealer sales, service points to serve our customers across the country. In 2014 we have added 6 new dealers in Jammu & Kashmir, Himachal Pradesh, Uttrakhand, Bihar, Arunachal Pradesh & Chhattisgarh.
Besides, augmenting the dealer network, we are also investing heavily in training of manpower and dealer business development and helping them become more responsive to the fast changing profile and needs of our customers. Our new product introduction plan of new Backhoe loader models is expected to be a game changer in this segment.
It has been observed that Terex is continuously busy in adding new products in its basket such as Skid steer, Light tower etc and also in upgrading existing products. What are new on card?Our new product line-up includes 3-5T wheel Loaders and new models of Skid Steer Loaders. These products will offer to the market the latest innovations and applicability required for the varied earthwork / material handling challenges. The feasibility of the tracked Excavator is also being studied and we may soon announce our plans for this segment.
What is the USP of your products portfolio?Our USP is the low maintenance costs of our machines vis-à-vis our competitor's models in the same category. Over a period of 2-3 years none of the major sub-assemblies of our backhoe (axle, transmission etc.) need to come in for any major overhaul, whereas almost each component of the power train and the engine of our competitor's models require either an overhaul or complete replacement in the same time. These days a Transmission or Engine overhaul can be expensive, esp if, spare parts and service capabilities are not available in the open market.
How are you engineering a fuel efficient and green product which, on the other side, is also comparatively priced?Engine development is a technically challenging exercise. This requires high degree of collaboration with key players in this business. We are constantly in discussions with all major manufacturers, to bring in the latest developments in this field. We have a fairly good understanding on this subject, thanks to the market feedback from other Terex companies doing business in different countries of the world. Fuel efficiency is a buzzword, slightly overrated in our industry. The game is,making power available at a point to do ajob, under unique set site conditions. It is the entire powertrain that needs to work as a synchronized unit for a machine to accomplish its task safely and efficiently.
A word about your engineering and manufacturing strength.We draw our engineering strength from a dedicated & highly experienced team of engineers at TIRC (Terex India Research Center) Bangalore. This team of motivated design and engineering professionals work on varied engineering, design problems put forward to them by various Terex Group companies from around the world. They provide cutting edge solutions to not only our product development teams, but also for our manufacturing and vendor development teams across different product platforms and business verticals. The manufacturing team at TEPL is focused group of professionals committed to a lean manufacturing environment. Our team employs the latest technology and Industrial Engineering principles to reduce non-value added activities and cut down heavily on re-work and wastage. This has yielded substantial savings over the past few years. Alongside, the manufacturing team our Vendor development, Purchase and Quality teams also work as a cohesive unit to deliver what our customers need, "A Reliable, safe and efficient machine"
After taking over the reign as new General Manger at Terex India; what has been your initiatives to strengthen your pan India presence through developing innovative dealership system?The main thrust area of my work, besides network expansion, has been to help & make the distribution network more responsive to the customer needs. This means, not only, to have Dealer Distributor points at strategically important locations, but also to encourage them to invest in their human capital, processes and systems which will help them to serve the customer in a better and efficient manner.
We have launched several innovative Dealer support programs on manpower skill developmentand overall management skills up-gradation. We have also helped Dealers to design their own region specific marketing, sales promotion campaigns. Today, no two markets are alike &each market or region has its own set of peculiarities which need to be appropriately addressed by marketers. We are now implementing a very unique on line, social media marketing strategy for Terex India. This will help us to efficiently connect with the changing buyer profile of our products and services.