In order to obtain higher throughput and desired efficiency in a material handling system, Palletisation is one of the key catalysts and a requirement for standardisation which enables lower cost realisation by the users, says Sunil K Gupta, CEO & Managing Director, KION India Pvt Ltd. Excerpts from the interview:

What is the current market size of intermodal logistics, distribution nodal hubs and warehousing in India?
The estimated market size of the total Indian logistics market is to the tune of $200 billion and it generates employment for close to 50 million people in our country.

How do you visualise the market growth in this segment during FY 2016-2020? What is the impact of Budget 2016-17 on this industry?
Of course, Indian logistics market is estimated to grow anywhere between CAGR 12-14 per cent during the next five years. The budgetary announcement by Finance Minister on Rs 2.21 lakh crore investment opens up many positives for infrastructure and logistics industry as a whole. However, the Budget was not clear on taxes as they would apply to the logistics sector. The GST and its onset are pressing concerns that could have been addressed by the FM in his Budget speech.

Could you elaborate on the range of products for the MHE solutions?
We cover the full range of MHE products such as diesel and electric forklifts, battery pallet trucks, stackers, tow trucks, vertical reach trucks, order pickers and very narrow aisle trucks and so on, which involves various capacities suiting to various customer applications. Our sales drivers are efficiency-based engineered products with Value for Money proposition involving the complete product life cycle enabling customers to enjoy the cost benefits.

Does the range of equipment and solutions provided KION address the customer requirements in a holistic way?
Our complete range of MHE is able to meet the customer requirements for most of the Indian market segments through our various flagship brands such as LINDE, STILL, BAOLI and VOLTAS, at various price and technology points.

What are the risks in this business and how they are mitigated?
There are no unique business risks in this industry, except for manufacturing and infrastructure growth linked business curves, which needs to be handled from time to time.

What are the challenges faced by the MHE industry? Could you indicate how these challenges can be suitably overcome? Can the city, state or central administration be of help?
The key challenges faced by the MHE industry is on the low market volumes causing low attractiveness for our vendors, channel and towards technology investments as a whole. As compared to any developing economy, Indian market for material handling is a very small market considering our sizeable population. This challenge could be overcome only by driving the concept of ?efficient way of material handling?.

What is the current overall demand-supply scenario for forklifts from small/medium/heavy duty forklifts?
Indian market is still considered to be very small (currently at 9,000 units per annum), as compared to any developing economies due to its unique structure and a set of limitations that we confront. Most of the Indian manufacturers have installed capacities for supplies, far beyond the market requirements, which creates additional pressure on imported players.

In terms of product mix, the market requirement for heavy duty forklifts (5 tonne and above) is just around 10 per cent of the total forklift market and the rest dominated by the standard 3 tonne capacity forklifts.

Palletised material handling equipment is the need of the hour. Your comments.
In order to obtain higher throughput and desired efficiency in a material handling system, Palletisation is one of the key catalysts and a requirement for standardisation which enables lower cost realisation by the users. During the last one decade, there has been considerable progress towards palletisation in the Indian market, but the rate of transformation is not good enough to create attractive market growth, as yet.