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What’s Ahead in CE Manufacturing Sector

Construction equipment OEMs are aimed at intensifying products with the latest technologies adding higher productivity, lower maintenance, easy operations, and remote connectivity.

What’s Ahead in CE Manufacturing Sector

The article is authored by Himanshu Sharma, Head – Marketing & Corporate Communication, B&R Industrial Automation.

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It is our product quality that has won our customers' faith and trust

We are increasing our investment in India and our phase-II expansion is already on. We strive to give inter?national quality to our customers at the best possible price by absorbing additional cost to the extent possible,? says Michael Schmid Lindenmayer, Managing Director, Putzmeister Concrete Machines. 0 - - 24677 14 251 2012-02-15 00:00:00.000 Equipment India Besides our technology quality, customer focus is the USP for our success Anand Sundaresan, Managing Director, Schwing Stetter India.

?Neither our customers nor our competition can deny the contribution made by Schwing Stetter India in the last 12 years to make the concreting equipment economical and affordable; and thereby substantially increasing the usage of these equipment," says Anand Sundaresan, Managing Director, Schwing Stetter India. In a chat with Equipment India, Sundaresan elaborates on the CE market trends and what has made the company a leading player in the concreting equipment segment. Excerpts from the interview.

How do you rate the overall performance of the CE industry and how is Schwing Stetter placed to meet the surging demands for advanced products and services in this evolving scenario?
In the last two decades, the construction equipment industry has made enormous progress and has grown both in size as well as diversity. Liberalisation, government focus on infrastructure developments and also special concessions given by the government on imports of equipment for infrastructure projects, have all helped the construction industry. It was also necessecary because most of these projects were time-bound and the penalties for delay in completion were very heavy. This gave a boost to the construction equipment industry and helped it grow more than 15-20 per cent year on year.

In addition to this, it also attracted many construction equipment manufacturers to set up shop in India either by way of joint ventures, license agreements or a hundred per cent subsidiary. Schwing Stetter India is one such com?pany to set up production facility, approximately 12 years ago, to take advantage of the growing market in India. Schwing Stetter India is a focused long-term player in the concreting segment and is here to stay for a long time.

With a view to participate in the growth and deve?lopment of our country and to participate in the huge market potential, Schwing Stetter India has been continuously increasing its production capacities, after sales network, value-added services etc, besides expanding its product range as per the needs of customers. Schwing Stetter India keeps close contact with customers, and with the valuable inputs received from them, has been intro?ducing various new products in the market. The recently concluded Excon 2011 was an excellent oppor?tunity to meet our existing and new customers and show?case our new products; we launched 19 new products.

How does Schwing Stetter look at ending this fiscal? What sort of topline growth are you looking at in the next five years and where do you see the growth coming from?
There has been a sudden slowdown in the second half of 2011 due to various reasons including high inflation and interest costs. Therefore, the topline growth this fina?ncial year will not be as high as we had originally anti?cipated. However, there will be a growth of about 20 per cent from the previous fiscal year 2010. We expect that this is a temporary setback and anticipate an year-on-year gro?wth of between 20 and 25 per cent in the next five years.

What is your take on some of the major issues the industry faces in today?s context?
Many of the factors have definitely affected the perfor?mance of construction equipment industry. This includes Schwing Stetter. High cost of funding has resulted in lower off-take of equipment, besides increasing input costs. The devaluation of the currency by over 20 per cent has a direct effect of over 7-8 per cent on the material cost since on an average, we always have 35-40 per cent import contents in our products.

Has competition become a major drive for the betterment of industry practices in terms of services provided by OEMs?
All construction equipment are highly service- oriented. Therefore, the customers are looking for more value-added services. In order to survive in this market, improved after-sales services and value-added services are a must. Healthy competition is most welcome. However, we find that sometimes, new entrants compromise too much to gain entry by selling even at below material cost levels, which is not very healthy for the industry.

What are the initiatives by Schwing Stetter towards more affordable and application-oriented product lines?
Cost reduction is a key factor towards which we conti?nuously work, without compromising on the quality of the components in our products. We have many examples where the cost of the equipment manufactured by us today are much lower than it used to cost ten years ago, but with better technology and better service package. This has made our equipment more affordable and has substantially increased our customer base.

Neither our customers nor our competition can deny the contribution made by Schwing Stetter India in the last 12 years, to make the concreting equipment econo?mical and affordable and thereby substantially increase the usage of the equipment.

How do you look at the threat of imports from LCC? What is your take on an initiative for a third-party certification system for import of equipment?
As I said earlier, the construction equipment is highly service-oriented equipment. Unless and until proper after sales service and spare parts back up is available, they cannot be sustained in India on a long-term basis, even though the initial purchase cost of this equipment may be lower.

Secondly, we have also seen that the equipment which come from the low-cost countries, often use inferior qua?lity of components. Therefore, the performance and dura?bility of such products are questionable.

How are exports doing for Schwing Stetter?
Schwing Stetter India was predominantly selling its products only within India and a few neighbouring coun?tries like Bangladesh, Nepal, Bhutan, Sri Lanka, too. How?ever, Schwing Stetter India will shortly be supplying equipment to the East Asian countries, which will increase export revenue in the years to come.

Schwing Stetter has registered an enviable growth and to what do you attribute the success?
Besides our technology and focus on quality, our customer focus is the USP for our success. Schwing Stetter has been very lucky to have a committed and dedicated team of employees at all levels who do not compromise on the company?s core values.

Tell us about the impact of the stringent emission norms on OEMs.
The emission norms as per the international standards are bound to come in and every OEM has to be prepared for this. I do not personally look at it as a big threat.

Any more capex on the anvil?
Schwing Stetter India will keep investing on capacity expansion, branch offices, service depots, training centres, etc, as and when necessary. In 2011, we added six branch offices and six service depots. We are also in the process of expanding our production facility and a new factory is under construction. The total outlay between 2011 and 2012 is Rs 80 crore.

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