WIRTGEN India High on Facility Utilization

Wirtgen India Private Limited expects to fully utilize the capacity of its newly set up state-of-the-art Greenfield manufacturing facility near Pune. High business expectations of the company are totally based on firm demand projections from newer road projects, maintainance of existing roads ,expansion of the mining sector and overall infrastructure development across verticals.

 

Mr. Ramesh Palagiri

P.P. Basistha had an opportunity to interact with Mr. Stefan Wirtgen, President Wirtgen Group and Mr. Ramesh Palagiri, Managing Director & CEO, Wirtgen India to learn about the company’s business plans in India during the inauguration of the new facility.

What are your expectations from the new facility?
The new facility will ensure much closer technical cooperation between our parent companies in Germany and India for the products to be manufactured across different brands of the Wirtgen group in India. Most significantly, it will provide us with a competitive edge, precisely in terms of offering value to our customers through local manufacturing. The state-of-the-art plant will adhere to similar manufacturing standards as our plants in Germany. It will incorporate similar quality control measures for production of the equipment. The new manufacturing facility, which is the fourth one of Wirtgen group outside Germany, is an entirely integrated setup complete with a workshop and training centre for operators and technicians. This will allow us to offer better technical support to our existing and new customers in the form of operators training for optimum utilization of equipment during the entire construction cycle. The workshop will offer overhauling and repairing of equipment as well. All these would go further leverage the brand positioning of our equipment working in the Indian construction sector in turn allowing us to have a good market share.

However, based on the modest market share presently possessed by Wirtgen; how do you intend to fully utilize the capacity of your new facility, especially with a large production capacity to produce 400 machines annually?
Wirtgen Group is the global market leader in Mobile Road Construction machinery and in India, we are already the market leaders in some segments. Our optimism to utilize our new facility to full extent is based on strong demand fundamentals of the Indian infrastructure, especially the Road and mining sector. The Government target to construct 20 kilometer road per day and increasing emphasis on build operate and transfer road projects which calls for laying of durable roads through advanced technologies is one of the prime reasons behind our optimism. Large scale plans to develop airport projects requiring creation of durable runways to handle growing traffic is added reason behind heightened business projections. The equipment demand from the growing infrastructure sector characterized by faster mechanization, dovetailed by entry of first time buyers and small contractors will create demand of our products. This will further allow us to harness our extended capacity in near future.


The positive notion of our facility to be utilized to the fullest extent is also based on the quality of our products which have created their marks in the Indian construction sector. We at Wirtgen are much sure that we would face a strong brand recall, allowing us to utilize our facility. Brand recall will be based on the fact that our equipment have performed in prestigious projects involving, Mumbai-Pune Expressway, 4.5 km Delhi International Airport Runway which is termed longest in Asia, Yamuna Expressway, the first Formula one Track in India at Noida ,and many others. The 25% of the coal mined in India is produced with Wirtgen surface miners.

Moreover, our ability to offer complete range of products for road construction with application support will create demand of our products, thereby allowing us to utilize our facility to its fullest extent.

What about the equipment that would be manufactured in the plant?
This plant would help us in achieving our aim of being the market leader in Mobile Road Construction Equipment across all segments in India, also in the near future.


Presently, we would manufacture our Hamm311 soil compactor in the plant due to its strong market position in India. We intend to manufacture other variants of soil compactors & the double drum tandem roller ,in phases. However, our Vogele brand of Asphalt pavers, Wirtgen slipform pavers, cold recycling plant, surface miners, road milling and others will continue to be imported from Germany owing to their modest volumes.

What would be the ratio of localization of the equipment to be manufactured in the new plant?
To have competitive product positioning in terms of pricing, 70% of the components including critical ones like engine, axles will be of local origin with high quality standards. Notably, engines will be from Cummins and the imported components would be from Germany.

To ensure that the components are of local origin—have you put vendor development and vendor assessment programme in place?
Wirtgen Group has an elaborate vendor selection programme based on fine set matrix and adhering to strict quality standards. This is being used in India for selection of vendors for components procurement.

Are the vendors totally placed in Maharashtra or other parts of the country as well?
The important vendors are mainly from the state itself to have better economies of scale in production. However, we have vendors from other parts of the country as well.

What would be your strategy to expand your footprints pan India? Are there any plan to appoint dealers for enhanced equipment availability and proper customer support?
Traditionally, Wirtgen has always focused to market its product through direct sales & service and this strategy has been in the countries where we are operating. We have similar approach to promote our products in India as well. The reason for opting for direct sales is because most of the equipment of the Wirtgen group are intended for specialized application. This requires lots of technical support for appropriate performance of the equipment during its entire job cycle. We would like to mention that Wirtgen does not emphasize on outright sales. Rather, the promotional philosophy, is to be with the customer during the entire construction period. Our specialized technical sales team gets involved with the customer from the project award stage to the complete execution stage. Before selling the products to the customers, we look into the project sites, understand the customer’s requirements and then offer the appropriate product solution from our vast equipment portfolio. To support sales of our equipment, we have branch offices in Delhi, Mumbai, Ahmedabad, Hyderabad, Chennai, Kolkata, Guwahati and service / spares centres at major project sites to be close to our philosophy of being Close to Our Customers.

What about customer support in terms of training, maintenance, and parts availability?


We have a state-of-the-art training facility which intends to train 400 ITI freshers for equipment operation. For maintenance, based on our workshop facility, we would offer operators training on troubleshooting. To make the parts available at the job site, we would supply from our central warehouse in our manufacturing facility through logistical support to equipment working in different job sites across the country. To support equipment working at different locations, we have spare parts depot in Delhi, Ahmedabad, Hyderabad, Talcher, Ranchi, and Guwahati. We are planning to setup a new spare parts depot in Chennai.

What are your future plan, focussed business areas and present status to launch Kleemann brand of crushers in India?
Road construction business would continue to be our main focus area. At par mining also continue to be the focus business. This is especially owing to the expansion and decentralization of coal mining business in India. Presently, 25% of the coal mined in India is through Wirtgen surface miners. We would look to expand and consolidate our footprint in coal mining through the surface miners. We would be looking to enter mining sector through our Kleemann brand of crushers as well. However, Kleemann brand would also serve the construction aggregate sector. Presently, the crushing equipment business is being integrated with the main business. We are looking forward to introduce Klemann crushers in India, post completion of the business integration process.

What would be the capacity of the crushers and would it be able to compete with premium market offerings?
The products would be of 40TPH to a high of 1000TPH. It would be of tracked origin and comprises primary, secondary and tertiary stages. Yes, Kleemann brand will be positioned among premium market offerings owing to its superior technology.

WIRTGEN India Facility Inaugurated
Wirtgen India Private Limited recently inaugurated its state-of-the-art plant near Pune. Located on Pune-Solapur highway, the plant has been built on a capital investment of `55 crores on a 25 acres plot and will characterize the aspects of lean manufacturing. It involves a production capacity to manufacture 400 units annually. The new facility is an entirely integrated setup in itself and comprises a administration centre and training building alongside a factory. It includes a shot blasting system, a paint facility and spare parts depot, while machines are assembled on a 60m long production line, equipped with overhead cranes with a load bearing capacity of 10 tonnes each and supported by slewing pillar cranes. Wirtgen initially plans to produce 200 machines at the plant and the capacity of 400 annual production would be possible with current set up.