There are many trends in forklifts and MHE which are prevalent in the industry. The main trend is to make the machines more environment- friendly and green, says Milind Shahane, VP-Marketing, Voltas, while sharing his views on the industry scenario. Excerpts from the interview.

After a tough year last year, how is Voltas placed now, in this evolving scenario?
The financial years 2008-09 and 2009-10 were extremely tough due to the global recession. The construction and material handling industries in India went through a severe downturn which saw demand reduction in these years. However, the situation began to improve around February-March 2010 where volumes picked up again. At present, the industry growth is back to 15 per cent to 20 per cent levels and we expect this to sustain over the next few years. Voltas has also benefitted from this upturn and our volumes for material handling equipment have increased by over 25 per cent in 2010/11.

What was the performance in the last two quarters, and how does Voltas look, at year-end?
As explained above, the performance of the materials handling business division (MHBD) has been quite good in 2010/11 over the three quarters. We expect a growth of over 25 per cent in this financial year in the number of machines and sales volumes.

What sort of topline growth are you looking at in the next five years and where do you see the growth coming from?
The growth in sales and top line would depend upon the overall industry growth. We expect this to be around 15 to 20 per cent per annum over the next few years. The growth would be driven by investments in manufacturing capacity, new ware?housing and logistics centres, retail and investment in infrastructure for ports, airports, etc.

How do you look at the hiring and leasing of MHE for logistics, auto and ancillary industries?
The shift towards hiring and leasing of equipment has increased somewhat in various sectors like logistics, auto, ancillary, retail, etc. There are many service providers who are offering rental of forklifts and other MHE2. Voltas is also present in this area and can offer a variety of services like feet management, feet rentals, annual service contracts, operation and mainte?nance contracts, refurbishing, etc.

What are the challenges faced by the MHE industry?
The challenges faced by the industry for manufacturing are quite severe. The issues are related to high cost of raw materials, high cost of inputs such as electricity, power, logistics, etc. There is lob sided tax structure due to double taxation on sales tax as well as many local taxes like octroi, entry tax, and so on. In addition, there are many administrative regulations in the factory and transportation which make the cost of manufacturing much higher in India as compared to other locations like China.

What is the potential for MHE in the warehousing sector? Also tell us about the products offered by Voltas, market share and envisaged growth?
The potential for warehousing sector is quite high, as there would be a requirement of more logistics and warehousing area to cater to the growth of the industry.

How do you view the threat of the import of equipment in the MHE segment?
There will always be import of MHE from various countries. The primary threat would come from Chinese companies since the equipment are very low priced and are being supplied to Indian customers much below the cost for Indian companies. The industry faces pressure from these suppliers and requires the support from the government in reduction of taxes and other input costs to be able to compete with foreign products.

Could you tell us about the value additions incorporated in your product range in terms of environment friendliness, safety, energy saving, and fuel consumption?
Voltas' MHBD is developing many new products which incorporate environment- friendly features. In addition to this, there is also a focus on improvement in product design to incorporate features related to safety, ergonomics, etc. We are also looking into new components and assemblies like AC motors, improved hydraulic systems, more electric controls which lead to energy saving and reduction in fuel consumption.