Gates products typically offer two to three times the safety factor, efficiency and durability to the SAE/EN specs, as compared to others. Our products offer efficiency improvement and our services ensure that the customer get the full benefit of dealing with the world's most trusted brand in fluid power and power transmission, says Rajesh C Bhandari, VP - Commercial (Industrial), Gates India. Excerpts from the interview.

What has Gates India's overall performance been in 2012?
We ended the year on a flat note as compared to 2011. First quarter was of growth for capital equipment but Q2 and Q3 were lower than 2011, primarily with the infrastructure slowing down due to tight money markets, lack of project work and cut-throat competition for few projects. We were impacted with OEM volumes sliding down. The business developed for SoP got delayed, thus affecting the forecast and inventory issues. However, the aftermarket continues to hold. But the bottomline is definitely under pressure and we are looking at several things to recover from this. New mixing plant and calendaring will help both the hose and the belt business in improving efficiency.

What are Gates India's strategies to sustain the leadership position?
Import cost of raw material is on the upsurge due to rupee devaluation, and local raw material and conversion cost is having an inflation impact whereas users are pressurising the price down. We had been supporting our customers by holding on to the prices from internal efficiencies and the export hedge but now we are forced to pass on the cost increases, though partially.

What is Gates India's core focus on providing value addition to its customers?
From only hose to systems to solutions is our way of holding on to our customers. We work with the end customer, be it OEM or users, and help them with customised solution. We continuously offer new technologies to our customers who can in turn differentiate their products in the market.

What is the overall market for hydraulic hoses for the CE sector?
With the slowdown in the European and Chinese markets, we are facing a stiff challenge from low-price imports and local players whose products were not considered good enough are not being tried by the customers due to cost pressures. We have local players moving out of businesses by selling to MNCs, who in turn, are desperate to sell to a contracting market. All this means more intense competition and everybody tends to get into your share of business. Luckily for us, our customers are faring better than others comparatively and this has helped us.

Tell us about your R&D and the latest product and technology trends. India is one of the five R&D locations for Gates Global. Our hose R&D lab in Lalru and belt R&D lab in Chennai are state-of-the-art and fully equipped to handle developments related to customer requirement. These labs are connected to global R&D and are abreast with the latest in technological developments.

What is your take on the existing safety spec and standards?
Hydraulics is dangerous if not handled carefully. We keep coming across inferior products causing accidents in the field but lack of awareness make the unorganised section of customers look for short-term savings. We at Gates are making customers and their end-users aware of the harmful effect of this and hopefully over a period of time, there will be improvement in the awareness. From the authorities' side, low cost unbranded product sales need to be regulated in this highly sensitive industry.

On the power transmission side, old and dated technology is leading to wastage of power and making the equipment less efficient. The latest technology of Polychain not only improves efficiency but also reduces the noise level and life of the belt in fluctuating and heavy load conditions.

How do you view the growth potential three years down?
Indian demographics have reached a level where we have no option but to grow. For a growing economy, we need sophisticated equipment which is built on technology aggregates. We need to improve infrastructure and hence the end markets in which we play, will continue to grow in the long term. This will mean more competition on Indian soil as other economies are not doing that well and have underutilised capacities. Working closely with the customers, offering them customised solutions and addressing their concern of COPQ will differentiate us from the competition and help us maintain leadership.