Our 2020 vision is half-a-billion USD sales from India
Kamal Bali, Chief Executive & Managing Director, LeeBoy India
?Our business model is very different by way of which we will be seen as a very different player altogether. We are bullish on that and we feel we are removing the pain points of our customers, too,? says Kamal Bali, Chief Executive & Managing Director, LeeBoy India. In a chat with Equipment India, Kamal talks about the company?s ambitious plan for the Indian market. Excerpts from the interview.
How do you look at the growth prospects of the CE industry in the present set-up?
The CE industry has been growing at about 20 per cent CAGR in the last five to six years, and going forward the next seven-eight years, it is expected to grow at about 21-22 per cent. Overall there is a lot of buoyancy but of course, in the short term, there are certain challenges the economy not only in India but globally will face. There could be some rollercoaster rides in the next one-and-a-half years. Overall we believe the industry is bullish.
What kind of support do you expect from the government?
I think the regulatory environment has to keep pace. Therefore, the government?s role has to be quite proactive, especially in removing regulatory hassles such as land clearance, environment clearance, etc, so at any point in time you have enough bankable projects. Our industry is derivative of infrastructure development. So, provided certain caveats like regulatory environment and the like are taken care of, the industry will grow and there is no doubt about that. We can easily assume between 15-25 per cent growth in the next few years.
How do you look at the exchange rate which is playing havoc now?
I think these are short-term issues. The exchange rate is an issue which has happened not only in India but also world over because of what is happening in the Euro zone. So people feel that US dollar is the safest currency to have and therefore park money in US bonds and US funds. So, the US dollar has appreciated against all currencies in the last one month. As far as India is concerned, the US dollar has appreciated even more. Month-on-month we have our current account deficit which is the trade deficit, imports minus exports. The exchange rate issue means greater input cost to the industry if the exchange rate does not go down. So there could be a rollercoaster ride for the next one year.
What are the in-built mechanisms you think can counter these issues?
I think in the long term, the aggregate and component industry in India has to grow, so that the dependency on imports will come down. So it?s imperative that the component and aggregate industry grow manifold to meet the demands. We have to encourage that sector, especially the small and medium industries of the economy.
The manufacturing policy ultimately is also going to help because the government has clearly stated in the manu?facturing policy that the share of manufacturing in GDP has to move from 14 per cent to 25 per cent. Service industry contributing to 50 per cent of GDP will not take us to a sustainable position. So, manufacturing has to grow. Our import has to come down drastically, manu?facturing has to improve and our exports also have to increase, to counter these issues.
In this evolving scenario, how has LeeBoy geared up?
We are fortunate that we are newcomers. Right now we do not have huge volumes to manufacture and sell. That is why it has very negligible impact on us. We are not in the numbers game right now. We are just starting to build.
What sort of market share are you looking for?
No market share, at present. For us, it is performance versus objectives. Our objectives are very clear. We are not in the rat race of numbers. Of course, we are in a race to do well and to meet certain benchmarks and we will be able to meet those objectives, and this short-term aberration will not change any of our plans.
What are the specific strategies you have in mind, to meet your objectives?
We just launched motor graders, and our basic idea is to fatten the bouquet of products. In 2012, most probably in July, we intend to launch a 22-tonne excavator followed by a backhoe loader and we will also be launching our concrete batching plant. So we will have these four products to offer to the market in a short span of time.
But in all these products lines, the competition is pretty high. Especially in the excavator market, we have all the top international players competing with Indian manufacturers.
We are aware that the big players of the world are here and all the products are of very high standard. For us, the challenge is to make sure our product indeed is world class. That is why we are taking our time and are not rushing in the market.
We have heard the voice of the customers; we have spoken to them on what they would like to see in the next generation of excavators pertaining to the Indian environment. Based on the voice of the customers, we have gone back to the design board and re-looked at all the whole specs of our excavator and features. We have tried to customise as much as possible to meet the requirements here. I would say that our engineering team has done an excellent job. We will roll out the 22-tonne excavator soon and if you see the specs and the way it performs, I would say it would be comparable with the very best in India.
So, competition is high in every product category but that is the name of the game. We have to be ready to be able to work along with the competition. But our business model is very different by way of which we will be seen as a very different player altogether.
Does that mean the concept of ORM you have introduced?
Yes. The concept of working with the customer throughout the product life cycle, that is the key.
So is that going to be the differentiator?
Yes, absolutely. We are bullish on that and we feel we are removing the pain points of our customers with that.
What has been the response so far?
Phenomenal. We are delighted and it has gone beyond my expectations that in a crowded market like this, there is so much interest our launch has generated. Very large high-profile customers are talking with us and want to engage with us. We expect the numbers to move up with time. The current new plant has a capacity of 1,000 units and we hope that within a couple of years, we can reach that figure.
How do you look at the potential for road maintenance equipment?
We have a number of products in the road maintenance equipment segment. Besides pothole patchers, which any major city would need, we have milling machines which we will be introducing in India. There is huge potential from this segment.
In 2015 where do you see yourself?
Our 2020 vision is to generate half-a-billion USD sales from India.
?Our business model is very different by way of which we will be seen as a very different player altogether. We are bullish on that and we feel we are removing the pain points of our customers, too,? says Kamal Bali, Chief Executive & Managing Director, LeeBoy India. In a chat with Equipment India, Kamal talks about the company?s ambitious plan for the Indian market. Excerpts from the interview.
How do you look at the growth prospects of the CE industry in the present set-up?
The CE industry has been growing at about 20 per cent CAGR in the last five to six years, and going forward the next seven-eight years, it is expected to grow at about 21-22 per cent. Overall there is a lot of buoyancy but of course, in the short term, there are certain challenges the economy not only in India but globally will face. There could be some rollercoaster rides in the next one-and-a-half years. Overall we believe the industry is bullish.
What kind of support do you expect from the government?
I think the regulatory environment has to keep pace. Therefore, the government?s role has to be quite proactive, especially in removing regulatory hassles such as land clearance, environment clearance, etc, so at any point in time you have enough bankable projects. Our industry is derivative of infrastructure development. So, provided certain caveats like regulatory environment and the like are taken care of, the industry will grow and there is no doubt about that. We can easily assume between 15-25 per cent growth in the next few years.
How do you look at the exchange rate which is playing havoc now?
I think these are short-term issues. The exchange rate is an issue which has happened not only in India but also world over because of what is happening in the Euro zone. So people feel that US dollar is the safest currency to have and therefore park money in US bonds and US funds. So, the US dollar has appreciated against all currencies in the last one month. As far as India is concerned, the US dollar has appreciated even more. Month-on-month we have our current account deficit which is the trade deficit, imports minus exports. The exchange rate issue means greater input cost to the industry if the exchange rate does not go down. So there could be a rollercoaster ride for the next one year.
What are the in-built mechanisms you think can counter these issues?
I think in the long term, the aggregate and component industry in India has to grow, so that the dependency on imports will come down. So it?s imperative that the component and aggregate industry grow manifold to meet the demands. We have to encourage that sector, especially the small and medium industries of the economy.
The manufacturing policy ultimately is also going to help because the government has clearly stated in the manu?facturing policy that the share of manufacturing in GDP has to move from 14 per cent to 25 per cent. Service industry contributing to 50 per cent of GDP will not take us to a sustainable position. So, manufacturing has to grow. Our import has to come down drastically, manu?facturing has to improve and our exports also have to increase, to counter these issues.
In this evolving scenario, how has LeeBoy geared up?
We are fortunate that we are newcomers. Right now we do not have huge volumes to manufacture and sell. That is why it has very negligible impact on us. We are not in the numbers game right now. We are just starting to build.
What sort of market share are you looking for?
No market share, at present. For us, it is performance versus objectives. Our objectives are very clear. We are not in the rat race of numbers. Of course, we are in a race to do well and to meet certain benchmarks and we will be able to meet those objectives, and this short-term aberration will not change any of our plans.
What are the specific strategies you have in mind, to meet your objectives?
We just launched motor graders, and our basic idea is to fatten the bouquet of products. In 2012, most probably in July, we intend to launch a 22-tonne excavator followed by a backhoe loader and we will also be launching our concrete batching plant. So we will have these four products to offer to the market in a short span of time.
But in all these products lines, the competition is pretty high. Especially in the excavator market, we have all the top international players competing with Indian manufacturers.
We are aware that the big players of the world are here and all the products are of very high standard. For us, the challenge is to make sure our product indeed is world class. That is why we are taking our time and are not rushing in the market.
We have heard the voice of the customers; we have spoken to them on what they would like to see in the next generation of excavators pertaining to the Indian environment. Based on the voice of the customers, we have gone back to the design board and re-looked at all the whole specs of our excavator and features. We have tried to customise as much as possible to meet the requirements here. I would say that our engineering team has done an excellent job. We will roll out the 22-tonne excavator soon and if you see the specs and the way it performs, I would say it would be comparable with the very best in India.
So, competition is high in every product category but that is the name of the game. We have to be ready to be able to work along with the competition. But our business model is very different by way of which we will be seen as a very different player altogether.
Does that mean the concept of ORM you have introduced?
Yes. The concept of working with the customer throughout the product life cycle, that is the key.
So is that going to be the differentiator?
Yes, absolutely. We are bullish on that and we feel we are removing the pain points of our customers with that.
What has been the response so far?
Phenomenal. We are delighted and it has gone beyond my expectations that in a crowded market like this, there is so much interest our launch has generated. Very large high-profile customers are talking with us and want to engage with us. We expect the numbers to move up with time. The current new plant has a capacity of 1,000 units and we hope that within a couple of years, we can reach that figure.
How do you look at the potential for road maintenance equipment?
We have a number of products in the road maintenance equipment segment. Besides pothole patchers, which any major city would need, we have milling machines which we will be introducing in India. There is huge potential from this segment.
In 2015 where do you see yourself?
Our 2020 vision is to generate half-a-billion USD sales from India.
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