Indian Inc Keen on Fostering Business, Building Synergies in China

Indian participants to the recently held Bauma China 2006—flew in numbers to China to gain exposure about Chinese construction equipment industry and market. The rationale behind Indian participation was variegated however, collective in its character as P. P. Basistha & M. A. Faridi learnt while interacting with participants.

Indian Inc Keen on Fostering Business, Building Synergies in China
The perception which made India Incorporation participate at Bauma China 2006 can be termed holistic in its entity. Business development was an essential endeavour. But more importantly, the enterprise to participate in the exposition was to get itself informed about the business dynamics of the global construction equipment industry involving innovated product line. Significantly, it was also to learn more about the Chinese construction equipment companies and the market itself, which is becoming a very strong factor to reckon in the global construction equipment business. China’s construction equipment market is poised to have market value of 230 billion RMB by the year 2010.

While the Indian exhibitors to Bauma China 2006 was a selected group of companies, the visitorship both involving the construction company trade and equipment manufacturers was in droves from the country. The Indian companies which participated in the event included, Bharat Earth Movers Limited (BEML) Eastman Impex, Pix Transmissions, Rakheja Engineers Private Limited, Speed Crafts Limited, Tafcon Group and of course New Building Materials & Construction World. However, put together the representation put up by Indian exhibitors at the event was larger than participating exhibitors from countries involving Ireland, Poland, Denmark,Malaysia, Russia, the Netherlands and even Switzerland.

Describing the idea of participation at this mega event of the industry, Mr. C. N. Durgesh, Chief General Manager, Marketing, and Mr. P. Athigaman, Assistant General Manager, BEML stated, the aim of the company was to source components and spares for its wide range of loaders, excavators, and dozers. He mentioned, China has hordes of both Chinese and global equipment manufacturers present in the country. This is supported by a strong vendor base for supplying components and spares which makes it a much ideal market for sourcing.

Indian Inc Keen on Fostering Business, Building Synergies in China

Chinese components and spares machinery manufacturing industry are integrated from manufacturing and somewhat from the sales and back-up support point of view. The units are well placed in advantageous geographic position in which the prominent locations are Quanzhou, Ningbo, Jining, Xuzhou and the southern area of Jiangsu province. The bases are effectively positioned and named as five spare and accessory parts bases of construction equipment in China. Apart from the five bases, the other centres of component and spares manufacturing including machinery in China are Qishu, Changjiang and Shengde.

The bases manufacture plethora of construction equipment spares and components both for global and Chinese equipment manufactures both based in China and overseas. Prominent, among which includes units manufacturing component in China for Hitachi excavators as well as for Hitachi’s overseas markets located in Singapore and Indonesia.

Mr. Durgesh explained that for improvement in the performance quality of the equipment, it is much prerequisite that the components are sourced globally. This is increasingly becoming an accepted trend of global equipment manufactures to which BEML is also strongly trying to fall in line. Trilburg and Austrian based Miba are some of the major global component suppliers to BEML. The fficial informed, BEML is strongly eyeing the Chinese market and is well placed to meet the requirements of the Chinese construction industry with its large capacity construction equipment product line in place involving dozers, excavators, and loaders.

Indian Inc Keen on Fostering Business, Building Synergies in China
He also further elaborated, that for expanding and consolidating its presence in foreign markets, BEML will lay thrust on service back up support. The company will undertake wholesome maintenance, repair of equipment post concept and commissioning, much in sync with the company’s vertically integrated operating model. BEML has a permanent representative office in China.

While developing contacts for sourcing of spares and components remained the idea for BEML. But for certain others it was to strengthen business synergies further, which has been developed with Chinese companies. Prominent among this included, New Delhi based PVS Impex. A concern into trade and consultancy for power, steel and road construction machinery.

PVS Impex has a marketing collaboration with Chinese road construction equipment major Zhenjiang Huachen Huatong Road Machinery Co. Ltd. (Huatong) for marketing its road construction machinery products in India. The marketing alliance of PVS Impex with Huatong has been for a period of three years. Since the marketing alliance, PVS has sold more than 25 Huatong manufactured road construction machineries in India.

Huatong an ISO-9001:2000 certified company is an integrated road construction equipment manufacturing company. The company has standard manufacturing systems in place adhering to effective quality standards and a well established sales and service network.

Road construction machinery manufactured by Huatong has a sizeable presence in Chinese construction industry. The company has also a sizeable export base being exported to more than 20 countries in Asia, Middle East, Africa, USA, Australia, Germany and others. Range of Huatong’s road construction machinery consists of asphalt mixing plant, different range of advanced sensor pavers and road milling machines.

Describing the experience of the collaboration Huatong has in place with PVS, Mr. Wei Dong, Regional Manager, Huatong stated, that the business alliance with the Indian counterpart has been more than satisfactory. While Mr. Rakesh Raina, representing PVS Impex mentioned, that his company would strive further to consolidate the relationship.

PVS has done US 3 million dollars business in the year 2006 through sales of Huatong’s equipment in the country. In 2007, the company would be striving for much more. Mr. Raina stated, the aspect that has facilitated higher sales of Huatong’s equipment in India and continue to do so further, would be the price competitive element of the equipment supported through a well placed network involving both pre and after sales service support.

Indian Inc Keen on Fostering Business, Building Synergies in China
PVS Impex has distributed and marketed Huatong’s road construction equipment machineries for National Highway Road Construction Projects across Delhi, Maharashtra, and Southern India.

Strengthening of business synergies also was a broader idea for Mumbai based Pix Belts and Hose’s participation at Bauma China 2006. Describing the move for the company’s participation at the event, Mr. Amarpal Sethi, Managing Director of the company along with Mr. Sonepal Sethi mentioned, that the company’s products enjoys a well accepted presence in the Chinese market. And the idea for participation was to consolidate the presence further. The Sethi’s said this, while busy clinching a deal with a representative of a Chinese construction equipment manufacturing company.

They added that the market for construction equipment machinery spares and components market is very much volume driven in China and the company is very keen to cash on the same with its products being price competitive. Pix produce a wide range of hoses and belts for construction and heavy earth moving equipment. The range of hoses produced by Pix includes, spiral hose, hot water hose, steam hose and rock drill hose. While belts produced by the company pertains to wide range of v-belts for construction and earth moving equipment.

The motivation to participate for cashing on the volume driven Chinese market was also for Ludhiana based Eastman Impex. Mr. Ashish Dhir, the head global business for scaffolding and framework of the company, which is also the company’s core business informed, that the company was much positive in catering to the large scale requirements of Chinese construction companies. But moreover the idea to participate was to gain exposure altogether about the Chinese scaffolding market and industry.

Learning about Chinese construction equipment and machinery was the intention of Anamika Rakheja, Managing Director of Rakheja Engineers Private Ltd. The company participated looking forward to meet product line requirements pertaining to wide range of buckets for Chinese excavators and loaders manufacturers and also to earn knowledge about the requirement of the concerned industry and market.

Getting a desired exposure of the wide expanse of the Chinese construction industry and its wide array of requirement of construction equipment also enticed Patna based Speedcrafts Limited, an ISO-9001:2000 Company which participated in the event to disseminate information about the range of construction equipment, it has to offer from its stable. According to Shashank Agarwal, Director of International sales for the company, participation at the exposition provided certain opportunities for the company to look for certain prospective clients and a knowledge experience platform.

Gaining requisite exposure about the Chinese construction equipment industry and market along with business development was the focus of India Incorporation’s participation at the event. And the upshot that was brought forefront well for the participants, was to have an operating model in business which should enable them to strike a balance both between price competitiveness and quality for the equipment manufactured, so as to have an edge over their Chinese counterparts in long run. A deduced opinion, which was much collectively shared well by the participants.

Indian Inc Keen on Fostering Business, Building Synergies in China

NBMCW January 2007

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