How do you assess the market potential for access equipment?
Access equipment is a very nascent market in India. It has just started off a few years ago, and so far, had minimum unit sales in India. But the trend is changing; as people are becoming more aware and customers becoming more safety and productivity conscious, the sale of access equipment is on the rise. We will see more of this equipment getting adopted for use in the Indian industry, especially in construction industry for maintenance activities. Given the simple fact that safety and efficiency provided by access equipment is unparalleled, I firmly believe the market will grow exponentially in times to come.
Do we have the right kind of rules and regulation to support the growth?
Rules and regulation are there; specs and standards are there; I think the question is about implementation. For example, it is accepted throughout the globe that if a load is over 25 kg, it cannot be handled by humans manually. We need to use a machine to lift it. Have you seen it implemented anywhere in the country? Or take the example of forklifts; in a country like ours we should have put to use minimum 4-5 times more units than are actually at work. So the question is, how you implement the given rules and regulations.
Godrej is a new entrant in the access equipment market. How do you rate your success so far?
We have recently forayed into the access equipment market, and we have a long way to go. We have been a major player in material handling equipment; we know the market well, and we are quite serious, too. All the steps we have been taking is in the direction to become a strong player in the access equipment market.
Is there any plan to manufacture access equipment range here?
Not immediately. Of course, we have bigger plans, once the volume justifies the production, we will step in with a manufacturing facility. We are looking at the economics and I am sure things could become economically viable within a short span of time.
What is the market potential for telehandlers?
I must say, it is enormous. But the issues are lack of awareness and the initial cost of telehandlers compared to the conventional pick-n-carry cranes the industry is familiar with. Telehandlers are much more productive, as they are multipurpose machines and can do the job of almost four different machines; more efficient, and safer than pick-n-carry cranes. Unfortunately, the industry has not accepted the same. But at the same time, I must say what the acceptance level three years ago and the kind of adaptation that is taking place now, is quite promising. We see a positive trend. As people start to appreciate its value, growth is sure to follow.
What are the major trends in forklifts?
In forklifts, people are moving towards cleaner machines and as the norms keep going up, we have cleaner diesel engine products. We are now seeing a bigger movement towards electric battery- operated equipment which is more environment-friendly, provide more value for money and a better cost profile, in terms of total cost of ownership. The way diesel prices are going up, in the next few months, battery-operated forklifts will be competitive. On the other side, there are lots of intelligent electronics being used in forklifts like remote diagnostics. We are proud to say that we are one of the pioneers of this trend in India.
How do you view the changing trends in palletisation?
Palletisation is the single most important factor which will push the demand for products like forklifts. Introduction of GST can play a vital role here. More than 90 per cent of warehouses in India are less than 20,000 sq ft in size. With GST coming in, warehouses will consolidate and it becomes imperative that you need to automate and use more material handling equipment to get productivity benefits.
Will the proposed FDI in retail give a boost to the industry growth?
Yes, of course. Organised retail is just 8-9 per cent today. If FDI in retail happens, organised retail will increase and you will see more palletisation happening. If one large company comes and palletises, it has a multiplier effect; what happens is, their suppliers need to palletise and front end companies need to do the same.
Tell us about major issues you are facing currently.
I think the biggest issue we face today is the lack of awareness; having said that, what we as manufacturers and suppliers of access equipment need to do is to increase the level of awareness about the safety and productivity which can be achieved with these machines. We are doing our bit but we still need to do more at a much bigger scale for customers to start using access equipment.
Do you think an access equipment association can help?
Definitely. Associations play a very important role, especially when they are associated with some larger organisation like CII. Access equipment can form an association and that should be affiliated. We have three large industry bodies so you can have a voice where it matters so the rules and relations can be made in such a way that it promotes safety and more productive use of labour resources available in the country.
We understand that there is already a move towards that?
It's a welcome step. We have an association for material handling equipment. So I do not see any reason why we should not have an association for access equipment. The point is, an association requires money to run. Who is going to take care of that? So you need to have members who are big enough to contribute.
To what extent did the current scenario affect your bottomline?
There has been an impact across the industry segments. We have been sort of unscathed by what has happened in the last ten months. But if this continues, no matter how well one has managed one's business, one is bound to be affected. On the other hand, with what we think would be a very progressive budget coming up and good policy announcements to support, implementation of stalled projects and fresh ones, a revival is round the corner. We are keeping our fingers crossed.
In the current scenario, how do you address the pricing issues?
Godrej stands for value for money. We try to look at the value that we are bringing to a particular situation. Across our product range, value for money is a very important platform on which we try to perform. Where there are opportunities to bring down the overall cost for the customer, we look at those opportunities. Maybe it requires extra effort from our part but we do not believe in selling on price. At the same time, we are conscious about the cost our customer has to bear. So, we try to provide better value for whatever we can offer and we like to go that extra distance for the customer.
How do you view the increasing competition?
That is a fact of every industry. Wherever you have technology available freely, you have at least 10-15 players; you have to find your own niche. I keep repeating this: you have to find what exact and extra value can you offer to customers and then you play in those niches where you can do much better.
Do you think some consolidation may happen in this area?
It is too early for that in India; as I said, the industry is very nascent here. There might be people who might give up. Consolidation for access equipment will happen a few years down the line. When you start manufacturing and when bigger companies start coming in, then you might see some amount of consolidation happening.
Why should I buy from Godrej?
I think the first point is, in addition to value what we provide, we genuinely care for our customers. There is a continuous focus in our company to improve our aftermarket metrics and invest in that. The market is not doing all that well, still we have invested in the aftermarket business, installed newer machines and added manpower. We are very conscious of the fact that we need to support the customer with a well trained service team which can meet customer requirements. Also, we try to meet customer requirements in the sense that if customer wants to hire out, we hire it out, on a short term or long term basis as per the requirements of the customer.
Where do you see the MHE industry in another 3-5 years?
We have well laid out plans to grow leadership in markets, not only in India but abroad, too. We export about 18 per cent of our forklift trucks and warehouse trucks. So we are looking to increase capacities and launch new products which offer better value to users. Our products, especially in the electric truck segment provide the latest technologies to improve productivity and safety for our customers at a low total cost of ownership. Of course, we improve our service offering to customers; provide them better maintenance contracts which meet individual customer requirements. We can tailor-make our maintenance contracts and services so customers get a full life experience with our products.