Why India is an Important Market for TEREX
Terex enjoys a strong brand recall in India’s construction equipment market, especially in crushing and screening, pick and carry cranes, and the more recent solutions for waste recycling. John L. Garrison, Chairman of the Board, President & CEO, and Kieran Hegarty, President – Materials Processing, Terex Corporation, share their views and plans for the Indian market in a one-to-one interview with S.A.Faridi.
How did Terex sustain its businesses in the aftermath of the disruption caused by the Covid-19 pandemic?
Our priority is safety of our customers and employees in any situation or environment. We follow a ‘zero harm safety culture: think safe, work safe, and be safe’. We believe in ensuring safety throughout our operations. When the pandemic hit, we began to focus even more on the safety of our employees and to ensure their well-being and good health. We have navigated safely through the pandemic and are quite proud of the fact that we continued to safely operate across the world despite the numerous disruptions.
Like all manufacturing companies, we experienced significant supply chain disruptions during the pandemic. There was a global shutdown which impacted our operations as they were completely integrated with our global supply chains. For instance, we were dependent on some sub-components coming from China, which has gone through significant supply chain issues. Yet we emerged out of the pandemic and have continued to make significant growth in all our Terex Materials Processing product lines.
No doubt, it was a very challenging time for our teams across the world. In India, our team did a very good job in sustaining the business by managing the supply chain quite well. Since we manufacture in India and also export the products, handling freight and ensuring timely dispatch became a big issue. But our India team showed its resilience in overcoming the challenges, and I must say that they did a remarkable job of continuing to grow the business. They even brought new products to the market, expanded our product offerings, and increased our manufacturing capacity. What’s more, we launched our Franna brand in the middle of the pandemic!
Having experienced such drastic supply chain disruptions, is the company now considering more local vendors?
Having more local vendors is a long-term strategy. India is evolving rapidly; manufacturing capabilities are developing, including for sub-components. Strategically, we would prefer to make our products in India with as much local components as possible and are also trying to increase our network of local vendors here.
What are your expansion plans for the Indian market especially when you are making India your export hub?
We entered the Indian market in 2000, primarily to cater to the mining industry. We were aware that the Indian government had long-term plans to grow the country’s infrastructure on a mega scale, so the sector was going to become the biggest by building roads, expressways, tunnels, bridges, and general construction.
This was the reason for entering India. Our focus was on crushing and screening products, and as you rightly pointed out, we built a very good market share, primarily in crawler track products, in which we were the pioneers. As the market expanded, Terex emerged as a strong brand domestically, while also showing its capability to export the products from India.
We’re trying to leverage our portfolio of international products as we see big opportunities in the traditional development markets within Africa / Southeast Africa. We see India as a potential springboard for export to these markets.
However, we’re now giving our Metal Processing & Screening range a broader portfolio and are also looking at other product categories. We have introduced our environmental processing products in India as the country is rapidly adopting recycling techniques for construction and municipal waste.
We are bringing superior technology and know-how to India; we are also increasing our focus on the lifting market; for instance, we have launched the 15-ton crane and in the coming months we will launch the 17-ton and 23-ton cranes. Our Franna pick and carry crane is the original mother of all pick and carry cranes. In fact, Franna has become so iconic that it’s like a generic name in its domestic market of Australia.
In the pick and carry category, there are two strong local brands who together hold 90% market share in India. Your price is 15 to 20% higher than these local brands. India is a price-conscious market, plus, for Indian customers ‘seeing is believing’. Although Franna is a well-known name in India, it is still not visible at project sites. So, how do you plan to expand your footprint across India, and be more cost-friendly?
We understand that India is a cost-conscious market, but we also believe that it’s becoming increasingly focused on areas like safety. Our Franna crane has all the desired safety features including a safety radar. So, when we make a premium product, and add quality and service to it, we deserve a premium value for it. We may not be cheaper, but we can be counted on for safety, quality, functionality – and, importantly, return on investment! In the long run, it’s not just the initial cost of a product, it’s the total cost, which factors in your cost of operating, maintenance, servicing, and so forth. Today, Terex is a predominant brand name in the construction equipment markets of Australia and New Zealand, and we are exporting to many other mining markets around the world. And we have built our position in these markets, and not necessarily on price.
At the same time, in India, we are aware that pricing is an important consideration for the buyers. Localizing here will give us a competitive cost position. We are localizing as much as we can so that we can bring our prices down and be cost competitive and offer total cost of ownership (TOC) over the lifecycle of our equipment. But we will compete on value, and not just price.
While we are expanding our offerings in the developing markets, we are aware that ultimately these different markets will demand different price points. However, we strongly believe that quality wins over price in the long run. So, while we are considering our positioning on the price front, our business ethos will continue to be ‘making safe and quality equipment’.
Nowadays, construction industries the world over are talking about reducing carbon emissions by using alternative fuels like electrification, biofuels etc. Is Terex considering making a move towards electrification or biofuels, and carbon-free manufacturing?
We have a very active electrification program from an innovation standpoint. About 70% of our aerial products under our Genie brand are offered either as electric or hybrid; and about 60% of our overall materials processing product portfolio is either electric or some form of hybrid. We have invested a significant amount in electrification and will continue to invest further across our product portfolio. We are, in fact, building a position of strength with our considerable number of electric products.
We have an aggressive Environmental Social Governance (ESG) program on a global basis. It sets the target of 15% reduction of greenhouse gas emissions by 2024, so to track our progress we’re doing a lot of environmental audits. We are also making improvements in our manufacturing facilities to reduce our carbon footprint and energy consumption. Our aim is to help customers achieve their ESG objectives with our electrified and hybrid offerings.
Besides electrification, we are making strides in our environmental processing equipment, having been focussed in this area for about five years now—it is one our fastest-growing areas. We are now bringing recycling machines, methodologies, and eco-technology to India, such as our recycling and shredding machines for handling waste. For instance, our screening machinery is undertaking landfill mining. We have over 100 such machines working in India that are cleaning up waste landfills and inner-city environments. We also have equipment that are recycling material by circling it back into the production process to reduce the overall carbon footprint and increase utilization of materials.
In fact, a lot of our equipment are part of the circular economy, which is a big focus area at Terex. We see this as one of the avenues for growth, as in the years ahead the concept of circular economy will become a megatrend since it works around the issue of sustainability. Hence, the products and solutions that we offer are definitely going to provide great growth opportunities to customers in this field.
How is Terex advancing the concept of futuristic technologies like IoT, AI, Machine Learning, Smart factories, Cloud Computing, etc given that the world is looking at Industry 4.0?
All our assets now have telematics as standard to help customers access and analyse machine performance data to improve users’ overall experience. Telematics is obviously critical, but the big area that we’re trying to enhance our capabilities is servicing and predictive maintenance to minimize machine downtime. Based on the data provided through telematics, customers can take action on the key information analysed. In this way, we bring additional value to our products and also make them cost effective through their lifespan.
So, we have an uptime strategy to increase serviceability to enhance the total cost of ownership for customers who are willing to pay a premium price for a Terex product be it Terex MPS or Franna. We are also investing in technology across our distribution channels. With our connected dealer inventory, we can manage inventory digitally and thereby ensure quicker availability of parts for our customers to increase their machine uptime.
At the end of the day, customers are looking to get a good return on their investment. No doubt, price is important, but the ROI that buyers earn, taking into account the total lifecycle cost of the product, is as important as the upfront purchase. The end-user is core to what we’re trying to do and ultimately, it’s all about giving the customer an enhanced experience.
Digitalization is making the information flow faster and more efficiently. Our software solutions help manage various processes and functions; they give data on product design, manufacturing processes, spare parts availability through proper inventory management, information on machine performance and health, IoT-based data from machines working at jobsites, etc. all of which we can use to make informed decisions. By creating a digital thread, we are connecting our products, factories, jobsites, and offices with the workforce for a more efficient interaction. We believe that by connecting the digital and physical worlds, manufacturers can transform how products are engineered, manufactured, and serviced.
How do you look at the Indian market for Terex products?
We have built up a good presence in India where the market is getting bigger and there is more competition. We will keep doing what we do best - bringing in new hybrid machines, and we will continue to expand our product line.
We will keep looking at the trends and how the market is developing. For instance, we have machines for scrap handling and for material handling. We see a lot of raw steel being produced by scrap, which is being produced in abundance across factories. And scrap is more environmentally friendly when it comes to making components. So, we are watching how the Indian market evolves.
We also see a lot of opportunities in other product categories such as for road building and some infra construction jobs. We are gauging the market requirements, taking feedback from contractors and the end-users to find out what other products they could use.
So, we will expand here as India is very much a part of our long-term plans. Our India team is doing a very good job in growing our presence in India, and we will increase our focus over the next 5 to 10 years. We also see the country as a potential export market as geo-politically India is in a good place.
What is the response to your newly introduced smaller recycling plant EvoQuip and what do you think will drive its demand?
The response to our recycling plant EvoQuip in India has opened up a new route to the market. And once we start localizing the smaller models of EvoQuip this year, I think there will be a huge potential for the product in India’s northeast and states like Jammu & Kashmir.
Now, a lot of crushing is happening on roads and bridges. Crushing machines that lack mobility are being dismantled and rebuilt completely, which is a crude process and costly too. We see opportunities here for our machines that have the mobility to go from one jobsite to another. Probably, we can introduce machines of a lower capacity as long as they have the mobility and don’t have to be dismantled. The Border Road Organization is doing a very good job of building roads in difficult terrains, and are looking for new technologies, which we can offer.
M-sand is becoming a big business in India; is Terex considering expanding its product line to meet this demand?
Jaideep Shekhar, Managing Director – Asia, Australia & EMEAR, Terex India Private Limited
We do have plans to expand in the market for M-sand. We’re looking at Dry manufactured sand and studying the market. We are aware that the unavailability of sand in general is a big problem everywhere.
But a trend that hasn’t hit the Indian market yet but is huge in Europe and America, is making sand from demolition waste. We have recently put up a whole plant in Switzerland and one in Paris where it is producing concrete grade sand from demolition waste. We call it ‘urban quarry’. The plant is working in the center of the city; it is a completely closed loop and using the recycled water. From the environmental and sustainability perspective, it’s a classic example of a solution that we can offer to make concrete quality sand from demolition waste. Crushing aggregates will not give the same quality. We are targeting the Asian and African markets and will export the machines from here to the US and to Europe.
How did Terex sustain its businesses in the aftermath of the disruption caused by the Covid-19 pandemic?
Our priority is safety of our customers and employees in any situation or environment. We follow a ‘zero harm safety culture: think safe, work safe, and be safe’. We believe in ensuring safety throughout our operations. When the pandemic hit, we began to focus even more on the safety of our employees and to ensure their well-being and good health. We have navigated safely through the pandemic and are quite proud of the fact that we continued to safely operate across the world despite the numerous disruptions.
Like all manufacturing companies, we experienced significant supply chain disruptions during the pandemic. There was a global shutdown which impacted our operations as they were completely integrated with our global supply chains. For instance, we were dependent on some sub-components coming from China, which has gone through significant supply chain issues. Yet we emerged out of the pandemic and have continued to make significant growth in all our Terex Materials Processing product lines.
No doubt, it was a very challenging time for our teams across the world. In India, our team did a very good job in sustaining the business by managing the supply chain quite well. Since we manufacture in India and also export the products, handling freight and ensuring timely dispatch became a big issue. But our India team showed its resilience in overcoming the challenges, and I must say that they did a remarkable job of continuing to grow the business. They even brought new products to the market, expanded our product offerings, and increased our manufacturing capacity. What’s more, we launched our Franna brand in the middle of the pandemic!
Having experienced such drastic supply chain disruptions, is the company now considering more local vendors?
Having more local vendors is a long-term strategy. India is evolving rapidly; manufacturing capabilities are developing, including for sub-components. Strategically, we would prefer to make our products in India with as much local components as possible and are also trying to increase our network of local vendors here.
We have built up a good presence in India where the market is getting bigger. While we are expanding our offerings in the developing markets, we are aware that ultimately these markets will demand different price points. We are localizing as much as we can to be cost competitive. But we will compete on value, and not just on price as we believe that quality wins over price in the long run. We also see the country as a potential export market as geo-politically India is in a good place.
John L. Garrison, Chairman of the Board, President & CEO Terex Corporation
What are your expansion plans for the Indian market especially when you are making India your export hub?
We entered the Indian market in 2000, primarily to cater to the mining industry. We were aware that the Indian government had long-term plans to grow the country’s infrastructure on a mega scale, so the sector was going to become the biggest by building roads, expressways, tunnels, bridges, and general construction.
This was the reason for entering India. Our focus was on crushing and screening products, and as you rightly pointed out, we built a very good market share, primarily in crawler track products, in which we were the pioneers. As the market expanded, Terex emerged as a strong brand domestically, while also showing its capability to export the products from India.
We’re trying to leverage our portfolio of international products as we see big opportunities in the traditional development markets within Africa / Southeast Africa. We see India as a potential springboard for export to these markets.
However, we’re now giving our Metal Processing & Screening range a broader portfolio and are also looking at other product categories. We have introduced our environmental processing products in India as the country is rapidly adopting recycling techniques for construction and municipal waste.
We are bringing superior technology and know-how to India; we are also increasing our focus on the lifting market; for instance, we have launched the 15-ton crane and in the coming months we will launch the 17-ton and 23-ton cranes. Our Franna pick and carry crane is the original mother of all pick and carry cranes. In fact, Franna has become so iconic that it’s like a generic name in its domestic market of Australia.
In the pick and carry category, there are two strong local brands who together hold 90% market share in India. Your price is 15 to 20% higher than these local brands. India is a price-conscious market, plus, for Indian customers ‘seeing is believing’. Although Franna is a well-known name in India, it is still not visible at project sites. So, how do you plan to expand your footprint across India, and be more cost-friendly?
We understand that India is a cost-conscious market, but we also believe that it’s becoming increasingly focused on areas like safety. Our Franna crane has all the desired safety features including a safety radar. So, when we make a premium product, and add quality and service to it, we deserve a premium value for it. We may not be cheaper, but we can be counted on for safety, quality, functionality – and, importantly, return on investment! In the long run, it’s not just the initial cost of a product, it’s the total cost, which factors in your cost of operating, maintenance, servicing, and so forth. Today, Terex is a predominant brand name in the construction equipment markets of Australia and New Zealand, and we are exporting to many other mining markets around the world. And we have built our position in these markets, and not necessarily on price.
At the same time, in India, we are aware that pricing is an important consideration for the buyers. Localizing here will give us a competitive cost position. We are localizing as much as we can so that we can bring our prices down and be cost competitive and offer total cost of ownership (TOC) over the lifecycle of our equipment. But we will compete on value, and not just price.
We have an aggressive Environmental Social Governance program on a global basis. About 60% of our materials processing products are offered either as electric or hybrid. Besides electrification, we are also bringing our recycling and shredding machines and our eco-technology to India for handling waste. We believe in furthering the circular economy by recycling material and circling it back into the production process, to reduce the overall carbon footprint and increase utilization of materials.
Kieran Hegarty, President – Materials Processing, Terex Corporation
While we are expanding our offerings in the developing markets, we are aware that ultimately these different markets will demand different price points. However, we strongly believe that quality wins over price in the long run. So, while we are considering our positioning on the price front, our business ethos will continue to be ‘making safe and quality equipment’.
Nowadays, construction industries the world over are talking about reducing carbon emissions by using alternative fuels like electrification, biofuels etc. Is Terex considering making a move towards electrification or biofuels, and carbon-free manufacturing?
We have an aggressive Environmental Social Governance (ESG) program on a global basis. It sets the target of 15% reduction of greenhouse gas emissions by 2024, so to track our progress we’re doing a lot of environmental audits. We are also making improvements in our manufacturing facilities to reduce our carbon footprint and energy consumption. Our aim is to help customers achieve their ESG objectives with our electrified and hybrid offerings.
Besides electrification, we are making strides in our environmental processing equipment, having been focussed in this area for about five years now—it is one our fastest-growing areas. We are now bringing recycling machines, methodologies, and eco-technology to India, such as our recycling and shredding machines for handling waste. For instance, our screening machinery is undertaking landfill mining. We have over 100 such machines working in India that are cleaning up waste landfills and inner-city environments. We also have equipment that are recycling material by circling it back into the production process to reduce the overall carbon footprint and increase utilization of materials.
In fact, a lot of our equipment are part of the circular economy, which is a big focus area at Terex. We see this as one of the avenues for growth, as in the years ahead the concept of circular economy will become a megatrend since it works around the issue of sustainability. Hence, the products and solutions that we offer are definitely going to provide great growth opportunities to customers in this field.
How is Terex advancing the concept of futuristic technologies like IoT, AI, Machine Learning, Smart factories, Cloud Computing, etc given that the world is looking at Industry 4.0?
All our assets now have telematics as standard to help customers access and analyse machine performance data to improve users’ overall experience. Telematics is obviously critical, but the big area that we’re trying to enhance our capabilities is servicing and predictive maintenance to minimize machine downtime. Based on the data provided through telematics, customers can take action on the key information analysed. In this way, we bring additional value to our products and also make them cost effective through their lifespan.
So, we have an uptime strategy to increase serviceability to enhance the total cost of ownership for customers who are willing to pay a premium price for a Terex product be it Terex MPS or Franna. We are also investing in technology across our distribution channels. With our connected dealer inventory, we can manage inventory digitally and thereby ensure quicker availability of parts for our customers to increase their machine uptime.
At the end of the day, customers are looking to get a good return on their investment. No doubt, price is important, but the ROI that buyers earn, taking into account the total lifecycle cost of the product, is as important as the upfront purchase. The end-user is core to what we’re trying to do and ultimately, it’s all about giving the customer an enhanced experience.
Digitalization is making the information flow faster and more efficiently. Our software solutions help manage various processes and functions; they give data on product design, manufacturing processes, spare parts availability through proper inventory management, information on machine performance and health, IoT-based data from machines working at jobsites, etc. all of which we can use to make informed decisions. By creating a digital thread, we are connecting our products, factories, jobsites, and offices with the workforce for a more efficient interaction. We believe that by connecting the digital and physical worlds, manufacturers can transform how products are engineered, manufactured, and serviced.
How do you look at the Indian market for Terex products?
We will keep looking at the trends and how the market is developing. For instance, we have machines for scrap handling and for material handling. We see a lot of raw steel being produced by scrap, which is being produced in abundance across factories. And scrap is more environmentally friendly when it comes to making components. So, we are watching how the Indian market evolves.
We also see a lot of opportunities in other product categories such as for road building and some infra construction jobs. We are gauging the market requirements, taking feedback from contractors and the end-users to find out what other products they could use.
So, we will expand here as India is very much a part of our long-term plans. Our India team is doing a very good job in growing our presence in India, and we will increase our focus over the next 5 to 10 years. We also see the country as a potential export market as geo-politically India is in a good place.
What is the response to your newly introduced smaller recycling plant EvoQuip and what do you think will drive its demand?
The response to our recycling plant EvoQuip in India has opened up a new route to the market. And once we start localizing the smaller models of EvoQuip this year, I think there will be a huge potential for the product in India’s northeast and states like Jammu & Kashmir.
Now, a lot of crushing is happening on roads and bridges. Crushing machines that lack mobility are being dismantled and rebuilt completely, which is a crude process and costly too. We see opportunities here for our machines that have the mobility to go from one jobsite to another. Probably, we can introduce machines of a lower capacity as long as they have the mobility and don’t have to be dismantled. The Border Road Organization is doing a very good job of building roads in difficult terrains, and are looking for new technologies, which we can offer.
M-sand is becoming a big business in India; is Terex considering expanding its product line to meet this demand?
Jaideep Shekhar, Managing Director – Asia, Australia & EMEAR, Terex India Private LimitedBut a trend that hasn’t hit the Indian market yet but is huge in Europe and America, is making sand from demolition waste. We have recently put up a whole plant in Switzerland and one in Paris where it is producing concrete grade sand from demolition waste. We call it ‘urban quarry’. The plant is working in the center of the city; it is a completely closed loop and using the recycled water. From the environmental and sustainability perspective, it’s a classic example of a solution that we can offer to make concrete quality sand from demolition waste. Crushing aggregates will not give the same quality. We are targeting the Asian and African markets and will export the machines from here to the US and to Europe.
NBM&CW March 2023
