India is a key market, and we are strongly committed to its growth
Based on our 10 year plan, by 2020 we hope to be able to secure about five per cent of the whole construction equipment market share in India which comes up to half a billion US dollars. That is our target and we hope that we can progressively move towards that. We are all in a rush to build India, says Sew Chee Jhuen, President, ST Kinetics. LeeBoy India, a wholly owned subsidiary of ST Kinetics, recently launched its 785i motor grader, the first to be engineered and manufactured in India to international standards. In an exclusive chat with Equipment India, Sew elucidates the company's India-specific strategies and its ambitious growth plans. Excerpts from the interview.
How LeeBoy is positioned in the US market?
LeeBoy is a market leader in the range of products it offers in the US market. For commercial class pavers, for instance, we are the dominant player there with around 85 per cent market share. We have 20-30 per cent market share in commercial class motor graders as well as in other product categories. In a few years time, LeeBoy will be celebrating its 50th anniversary. In 50 years, we have built a very strong brand with our products. India is a very important market for us and its importance will only grow with time. India is the fifth largest construction equipment market in the world, and we are talking about 20 per cent growth every year for the next 10-15 years.
How sustainable the growth do you expect especially in the BRIC nations?
In Europe and the US, the growth will slow down. But the world's focus is on Asia and in particular, India and China. This is why India is very important to us. We are talking about highways that are linking big and small cities and smaller roads to the villages. We are talking about thousands of kilometres of roads that have to be built. We are going to launch LeeBoy in Brazil. In Russia, we sell equipment and are also loo?king into localised production with our partner.
What is LeeBoy's value proposition?
In India, we are here not just to supply equipment. We want to make sure that the whole user experience is a positive one and we call this our Operations-Repairs-Maintenance (ORM) initiative, where LeeBoy India sells the equipment to the user and packages it according to the user's needs. As an operator, we will also take care of all the repairs and maintenance of the equipment. To LeeBoy India, what is critical in our service offering is in maintaining the uptime for the user. On our end, we will do whatever is needed to make sure that the equipment is on the site running and doing the work it is supposed to do. If, for whatever reason, things break down, we will repair it as fast as possible, or replace the equipment with a swing unit. This is the special value proposition we bring to the market to ensure that we minimise the downtime for our customers. We have operators that are well trained, not just in operating the equipment, but also in maintaining the uptime of the equipment. So the user is able to focus on its core business of completing the project to meet his end customers' requirements.
So far what is the feedback from customers on ORM?
Even before we launched LeeBoy India last year, we have interacted with a lot of customers, big and small, in what we call 'the voice of the customer' sessions. We really wanted to hear from the customers the biggest issues they faced and the challenges they had in their work. Invariably, people came up with the point of availability and uptime. You can buy very good equipment from a very strong brand, but if the operators are not well trained, then there is a chance that he may damage the equipment and reduce the uptime. Based on that feedback, we came up with the ORM concept and we tested it with the customers and we got a very good reception. People liked the idea and that is how we are moving with it. Of course, if there are customers who just want to buy and want to operate the equipment themselves, we are also open to that. By and large, based on our feedback and the people we talked to, there is a lot of support for the ORM initiative.
Brief us about the investment made so far. Is there any more capex planned?
For the new plant, we are pumping around $15-20 million. Our total investment which we have planned for next few years is $35 million. We are not limited to this alone. In fact, we will have to build another bigger factory in India if our targets are met as planned.
How strong is your commitment towards environment, and how the same is reflected in your product designs?
All these are very important. As a part of the ST Engineering Group, we are conscious about our commitment towards the environment. We have undertaken initiatives and implemented many programmes to reduce our carbon footprint. We have not only gone into the design of hybrid electric vehicles, but also designed and produced hybrid hydraulic drives, which can equate to 20-30 per cent savings in fuel consumption.
In Canada, we have a wholly owned company that designs a whole new generation of infinitely variable transm?issions. One of our longer term plans is to include these transmissions in some of our products to help further reduce fuel consumption. Meanwhile, all our products conform to the emission stand?ards as demanded by each country. For example, in the US, we have already conformed to Tier 4 emission standards. In India, we have moved a long way with the govern?ment's requirements. The 785i motor grader that we have launched has many fuel efficiency features built into its design to make sure that the fuel consu?mption for the user is lower than the current standard motor graders in the market.
What kind of business are you envisaging?
We just started last year in September, and we have been laying a solid foundation. Our new LeeBoy India plant is under construction and when completed, it will equip us with a bigger production capacity. Now, we have launched our 785i motor grader, we will soon be launching other equipment like a 22-tonne excavator and a backhoe loader. We will continue with our expansion by hiring workers, engineers, specialists and other professionals. Our plan in the next 10 years is to grow our sales and by 2020, we hope to be able to secure about 5 per cent market share of the construction equipment market in India, which comes up to half a billion USD. We hope to progressively move towards that.
How do you address the challenge of rising cost of input materials, especially steel?
As the situation in the global economy fluctuates, commodity prices will always be a challenge. Steel prices shot up and then came down because of the global crisis, but over the last year, it has crept up again. It is the same for copper and aluminium. These are the challenges we have to work with. Here, we benefit from our group pur?chases initiative. As a global engineering group, whether in India, Singapore, US or other countries, we try to aggregate our pur?chasing as much as possible for a better deal.
Do you have buy back arrangement?
We are flexible and we are here to meet the customers' requirements. If the custo?mer requires a buy back scheme, we are up to it. As I have mentioned, at the end of the day, we want the user to have a very positive experience of our products and get the best value out of it. So if they have shorter-term projects where they do not require the equipment after the project completion, we will be open to discussion.
Why should a customer opt for LeeBoy?
There are four major reasons why LeeBoy India is a compelling choice. First and foremost, you will be dealing with a company that is backed by ST Engineering, a global engineering group that has close to five decades of proven track record. We are rated AAA by both Moody's and Standard & Poor's and we mean it when we say that we stand by all our products.
Secondly, the products based on LeeBoy USA's designs are all proven products with many unique features built-in, making the user a lot more productive in his work.
Thirdly, we are not here only to sell products; we believe in making sure that the user has a very good experience and are freed from worrying about the equipment's uptime and maintenance, as we will always take care of the equipment for him. We also have a very good network of support infrastructure put in place. Our people are well trained and well versed to provide the customers with the customised solutions they want.
Last, but not the least, we have a flexible service offering. So, whatever the customer requires - be it direct sale, total support or buy back guarantees etc, we are totally flexible in the way we work with our customers.
For these reasons, we believe that any customer would love to deal with us.
How LeeBoy is positioned in the US market?
LeeBoy is a market leader in the range of products it offers in the US market. For commercial class pavers, for instance, we are the dominant player there with around 85 per cent market share. We have 20-30 per cent market share in commercial class motor graders as well as in other product categories. In a few years time, LeeBoy will be celebrating its 50th anniversary. In 50 years, we have built a very strong brand with our products. India is a very important market for us and its importance will only grow with time. India is the fifth largest construction equipment market in the world, and we are talking about 20 per cent growth every year for the next 10-15 years.
How sustainable the growth do you expect especially in the BRIC nations?
In Europe and the US, the growth will slow down. But the world's focus is on Asia and in particular, India and China. This is why India is very important to us. We are talking about highways that are linking big and small cities and smaller roads to the villages. We are talking about thousands of kilometres of roads that have to be built. We are going to launch LeeBoy in Brazil. In Russia, we sell equipment and are also loo?king into localised production with our partner.
What is LeeBoy's value proposition?
In India, we are here not just to supply equipment. We want to make sure that the whole user experience is a positive one and we call this our Operations-Repairs-Maintenance (ORM) initiative, where LeeBoy India sells the equipment to the user and packages it according to the user's needs. As an operator, we will also take care of all the repairs and maintenance of the equipment. To LeeBoy India, what is critical in our service offering is in maintaining the uptime for the user. On our end, we will do whatever is needed to make sure that the equipment is on the site running and doing the work it is supposed to do. If, for whatever reason, things break down, we will repair it as fast as possible, or replace the equipment with a swing unit. This is the special value proposition we bring to the market to ensure that we minimise the downtime for our customers. We have operators that are well trained, not just in operating the equipment, but also in maintaining the uptime of the equipment. So the user is able to focus on its core business of completing the project to meet his end customers' requirements.
So far what is the feedback from customers on ORM?
Even before we launched LeeBoy India last year, we have interacted with a lot of customers, big and small, in what we call 'the voice of the customer' sessions. We really wanted to hear from the customers the biggest issues they faced and the challenges they had in their work. Invariably, people came up with the point of availability and uptime. You can buy very good equipment from a very strong brand, but if the operators are not well trained, then there is a chance that he may damage the equipment and reduce the uptime. Based on that feedback, we came up with the ORM concept and we tested it with the customers and we got a very good reception. People liked the idea and that is how we are moving with it. Of course, if there are customers who just want to buy and want to operate the equipment themselves, we are also open to that. By and large, based on our feedback and the people we talked to, there is a lot of support for the ORM initiative.
Brief us about the investment made so far. Is there any more capex planned?
For the new plant, we are pumping around $15-20 million. Our total investment which we have planned for next few years is $35 million. We are not limited to this alone. In fact, we will have to build another bigger factory in India if our targets are met as planned.
How strong is your commitment towards environment, and how the same is reflected in your product designs?
All these are very important. As a part of the ST Engineering Group, we are conscious about our commitment towards the environment. We have undertaken initiatives and implemented many programmes to reduce our carbon footprint. We have not only gone into the design of hybrid electric vehicles, but also designed and produced hybrid hydraulic drives, which can equate to 20-30 per cent savings in fuel consumption.
In Canada, we have a wholly owned company that designs a whole new generation of infinitely variable transm?issions. One of our longer term plans is to include these transmissions in some of our products to help further reduce fuel consumption. Meanwhile, all our products conform to the emission stand?ards as demanded by each country. For example, in the US, we have already conformed to Tier 4 emission standards. In India, we have moved a long way with the govern?ment's requirements. The 785i motor grader that we have launched has many fuel efficiency features built into its design to make sure that the fuel consu?mption for the user is lower than the current standard motor graders in the market.
What kind of business are you envisaging?
We just started last year in September, and we have been laying a solid foundation. Our new LeeBoy India plant is under construction and when completed, it will equip us with a bigger production capacity. Now, we have launched our 785i motor grader, we will soon be launching other equipment like a 22-tonne excavator and a backhoe loader. We will continue with our expansion by hiring workers, engineers, specialists and other professionals. Our plan in the next 10 years is to grow our sales and by 2020, we hope to be able to secure about 5 per cent market share of the construction equipment market in India, which comes up to half a billion USD. We hope to progressively move towards that.
How do you address the challenge of rising cost of input materials, especially steel?
As the situation in the global economy fluctuates, commodity prices will always be a challenge. Steel prices shot up and then came down because of the global crisis, but over the last year, it has crept up again. It is the same for copper and aluminium. These are the challenges we have to work with. Here, we benefit from our group pur?chases initiative. As a global engineering group, whether in India, Singapore, US or other countries, we try to aggregate our pur?chasing as much as possible for a better deal.
Do you have buy back arrangement?
We are flexible and we are here to meet the customers' requirements. If the custo?mer requires a buy back scheme, we are up to it. As I have mentioned, at the end of the day, we want the user to have a very positive experience of our products and get the best value out of it. So if they have shorter-term projects where they do not require the equipment after the project completion, we will be open to discussion.
Why should a customer opt for LeeBoy?
There are four major reasons why LeeBoy India is a compelling choice. First and foremost, you will be dealing with a company that is backed by ST Engineering, a global engineering group that has close to five decades of proven track record. We are rated AAA by both Moody's and Standard & Poor's and we mean it when we say that we stand by all our products.
Secondly, the products based on LeeBoy USA's designs are all proven products with many unique features built-in, making the user a lot more productive in his work.
Thirdly, we are not here only to sell products; we believe in making sure that the user has a very good experience and are freed from worrying about the equipment's uptime and maintenance, as we will always take care of the equipment for him. We also have a very good network of support infrastructure put in place. Our people are well trained and well versed to provide the customers with the customised solutions they want.
Last, but not the least, we have a flexible service offering. So, whatever the customer requires - be it direct sale, total support or buy back guarantees etc, we are totally flexible in the way we work with our customers.
For these reasons, we believe that any customer would love to deal with us.
A-303, Navbharat
Estates,
Zakaria Bunder Road,
Sewri (West), Mumbai - 400 015,
Maharashtra, India
+91-22-24193000
Subscriber@ASAPPinfoGlobal.com