How do you assess the conditions in the Indian construction equipment (CE) market as the overall market is going through difficult conditions?
Construction industry has absorbed slump in 2019 and we are expecting growth to rebound with the government's plan of Rs 103 trillion to be spent over five years as part of the National Infrastructure Pipeline (NIP). However, due to the coronavirus outbreak in China, the supply chains have been affected and it may once again impact the economy. We hope it doesn't create an adverse effect in India since the economy is on the path of steady recovery. So far, December has been better than January and February has been better than January. We hope that the trend continues.
How has the performance of ACE been in these difficult conditions? How do you see advantages in ACE as a home-grown business group?
During the tough times of last year when numbers have dipped, we have maintained and sustained by not going into red. Rather, we have utilised this downturn time for improving our efficiencies like conducting training and skill development programs, which has led to margin expansion.
Being one of the largest crane companies in India and that too homegrown, ACE is held in high esteem by our customers. They value and appreciate our high quality and cost-effective "Make In India" products and contribution to economic growth, eventually turning them as our loyal customers. Looking at the current scenario of China, where supply chains are adversely affected, I believe we would be hardly affected. Further, localisation of components and labour cost being low in India, we are sure that we will become more competitive and manufacture world-class products.
With ACE completing 25 years in the industry, how do you experience the growth over the years? What are the hits and misses during these years?
As ACE completes 25 glorious years, we stand, 'EMERGED, EMPOWERED and ENERGIZED' to race forward into the future, to achieve even bigger milestones and to embark upon our next journey towards becoming the No. 1 construction equipment company in the country. During all these years, ACE has experienced significant growth, survived competitive and challenging times, and is currently experiencing steady growth. The company has also served and contributed to various structural policy reforms and growth factors led by the Government of India. Building on a 25-year milestone, the company continues to expand its client portfolio, projects, and resources while maintaining it's position as the No. 1 crane brand of India. The hits have been our cranes, be it our pick-n-carry cranes, next-generation, tower cranes or crawler cranes. Yes, we did have some misses. We should have been doing much better in the backhoe loaders and road construction segment, which is our focus as of now. Moving forward, over the next 2-3 years, there will be a visible improvement in our market share in these segments.
What is the role of technology in the evolution of Indian CE market? How did technology developments help in the growth of order books at ACE over the years?
Technology and innovation certainly play an important role in the development of the CE industry. In fact, it's a vital factor for the growth of all industries. At ACE, we have been continuously striving to stay abreast with the latest global standards with continuous upgradation in our products. If you look at the transformation of our pick-n-carry cranes compared with the models 7-8 years ago, they have evolved into Next-gen cranes. Recently, we have launched our NX-series cranes which are a step ahead even than our Next-gen cranes.
Similarly, we have been continuously upgrading our other product lines to enhance their productivity, reliability, and durability to ensure our customers are offered with the best in the industry.
The growth in order books has led to a market share of 63 per cent in pick-n-carry cranes and 60 per cent in tower cranes, which has been the direct result of producing reliable and cost-effective products. I am sure this would have not been possible without the continuous technology upgradation and innovation.
As I said, we totally missed out on backhoe loaders and road segment, especially when backhoe loaders is the largest segment in CE industry. Now, with our all-new AX-124 and re-energised form with espect to backhoe loaders and road machinery, we are sure that in years to come we will expand and increase our numbers, which we have already started doing from past six months. With consistent focus and revised strategy, we are sure to become India's leading CE industry in the years to come.
What are your plans to become the top construction equipment player in India, from the top mobile cranes player in the country currently?
Today, we have the largest portfolio of cranes in the country and over the years, we have added many more construction equipment catering to the diverse demands of the industry. Moving ahead, we are focused on developing ACE from being a leading crane company to a construction equipment giant with a determined focus on new product categories in road making equipment and backhoe loaders.
What is the current turnover of the company? Where do you see the company in the next five years?
The current turnover is around Rs 1,500 crore and moving forward, with consistent focus and strategies, it will not be difficult to touch Rs 5,000 crore mark by 2025.
What is your outlook on the Indian construction equipment market? How far do you think ACE can be a part of India's growth story?
We have been an integral part of India's growth story since our inception in 1995. As a matter of fact, our brand tagline, "Lifting India's Growth" is the reflection of our significant contribution in developing India's infrastructure growth. As the government is also focused on infra and construction activities, we see that good times for the Indian CE industry is round the corner. And, they very well realise that infrastructure growth can be the biggest economy driver and employer of the country. Just like all other developed nations did in the past, as soon as they developed world-class roads, highways and connectivity and infrastructure, these nations witnessed an economic boom. And, I am sure India will follow suit and develop its roads and related infrastructure in the next 5-10 years. Hopefully, the economic boom will continue.