Earthmoving Equipment: TIPL is fully geared to meet the market demands
We strongly believe that techn?ology built into machines and add-on technology solutions will create the paradigm shift in the industry, says GVR Murthy, Joint Managing Director, TIPL, in an exclusive interview with EQUIPMENT INDIA. Excerpts from the interview.
How do you look at the potential of earthmoving equipment and also the demand- supply scenario?
We see a very buoyant trend for earthmoving equipment in the next five years. The government investments have been articulated clearly for the 11th and 12th Year Plans and when these investm?ents in value are translated into equipment worth, it clearly signifies the emanating demand of equipment. Seeing the demand ahead, many OEMs have either invested further in their local facilities as also planned some new investments to start-up facilities. We will see demand and supply situation even out in the future.
Sales performance-wise, what are the trends as seen in the last two quarters, and the growth anticipated in the coming fiscals?
TIL has shown significant growth trends in the sales performance. On a stand-alone basis, TIL's topline has grown by 28 per cent in first quarter and 26 per cent in second quarter. TIPL, the hundred per cent subsidiary of TIL, has shown a top line growth by 47 per cent in first quarter and by 29 per cent in the second quarter. Both TIL and TIPL will continue to grow further in the next quarters of 2010-11 and 2011-12.
Technology and product-wise, what are the perceptible trends in the markets?
Quality, speed and costs of executing the project are increasingly becoming more focused area for every customer in the industry. The differentiator for the user is technology and high quality product support. Therefore in our business too, apart from making efficient, robust and reliable machines, we are also equipping them with high-end user-friendly technology solutions which allow the operators to perform at best efficiency. We strongly believe that technology built into machines and add-on technology solutions will create the paradigm shift in the industry.
From the OEMs' point of view, what perceptible shift do you witness in end-user buying patterns?
Once our customers are exposed and start using technology solutions which add value to their business, there is bound to be a market pull for these technology solutions. This reflects not only in the infrastructure industry but in any industry which is on the fast track. We also see customers wanting manufacturers / suppliers to take all repairs and maintenance works and ensure high availability of the equipment. This is initially the `MARC` nature of contracts which have been pioneered by us. We would like to completely engage ourselves with the customers and be a partner to them rather than vendors.
Taking into account increasing competition, international and domestic, how you strategise the operations so as to get an edge over the competition?
While new machine introductions, new product features, value added technology solutions, will all play a key role in the industry's growth, what will be key is getting closer to customers and pre-empting their business needs. Being sensitive to customer requirements and supporting them with unmatched product support at the end of the day, will be central and at the heart of our strategic initiatives.
Are there any reasons that the market is for predominantly mid-sized equipment? Any shift seen towards higher capacity machines?
The market is dually structured with both mid-sized and large equipment having a strategic role, depending on the application needs of the customer. In the road construction and highway segment, we tend to see more of the mid-sized equipment and more of the smaller size contracts being executed.
However, when we move up the value and application chain, specifically in the mining segments, the shift is more to the higher class and large- sized equipment. We do see an underlying trend where the industry is going in for larger equipment given the fact many projects are executed on a back-to-back basis, whereby the investments in larger machines become more practical and commercially justified.
How do you look at the potential of earthmoving equipment and also the demand- supply scenario?
We see a very buoyant trend for earthmoving equipment in the next five years. The government investments have been articulated clearly for the 11th and 12th Year Plans and when these investm?ents in value are translated into equipment worth, it clearly signifies the emanating demand of equipment. Seeing the demand ahead, many OEMs have either invested further in their local facilities as also planned some new investments to start-up facilities. We will see demand and supply situation even out in the future.
Sales performance-wise, what are the trends as seen in the last two quarters, and the growth anticipated in the coming fiscals?
TIL has shown significant growth trends in the sales performance. On a stand-alone basis, TIL's topline has grown by 28 per cent in first quarter and 26 per cent in second quarter. TIPL, the hundred per cent subsidiary of TIL, has shown a top line growth by 47 per cent in first quarter and by 29 per cent in the second quarter. Both TIL and TIPL will continue to grow further in the next quarters of 2010-11 and 2011-12.
Technology and product-wise, what are the perceptible trends in the markets?
Quality, speed and costs of executing the project are increasingly becoming more focused area for every customer in the industry. The differentiator for the user is technology and high quality product support. Therefore in our business too, apart from making efficient, robust and reliable machines, we are also equipping them with high-end user-friendly technology solutions which allow the operators to perform at best efficiency. We strongly believe that technology built into machines and add-on technology solutions will create the paradigm shift in the industry.
From the OEMs' point of view, what perceptible shift do you witness in end-user buying patterns?
Once our customers are exposed and start using technology solutions which add value to their business, there is bound to be a market pull for these technology solutions. This reflects not only in the infrastructure industry but in any industry which is on the fast track. We also see customers wanting manufacturers / suppliers to take all repairs and maintenance works and ensure high availability of the equipment. This is initially the `MARC` nature of contracts which have been pioneered by us. We would like to completely engage ourselves with the customers and be a partner to them rather than vendors.
Taking into account increasing competition, international and domestic, how you strategise the operations so as to get an edge over the competition?
While new machine introductions, new product features, value added technology solutions, will all play a key role in the industry's growth, what will be key is getting closer to customers and pre-empting their business needs. Being sensitive to customer requirements and supporting them with unmatched product support at the end of the day, will be central and at the heart of our strategic initiatives.
Are there any reasons that the market is for predominantly mid-sized equipment? Any shift seen towards higher capacity machines?
The market is dually structured with both mid-sized and large equipment having a strategic role, depending on the application needs of the customer. In the road construction and highway segment, we tend to see more of the mid-sized equipment and more of the smaller size contracts being executed.
However, when we move up the value and application chain, specifically in the mining segments, the shift is more to the higher class and large- sized equipment. We do see an underlying trend where the industry is going in for larger equipment given the fact many projects are executed on a back-to-back basis, whereby the investments in larger machines become more practical and commercially justified.
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