Interview with Amit gossain
Vice President—Marketing and Business Development, JCB India Ltd.
Company Description: JCB
India Limited, Ballabgarh (Haryana) is a fully owned subsidiary of JC Bamford
Excavators Limited, UK. The company offers twenty one different machines in
seven product types such as Backhoe Loaders, Loading Shovels, Tracked
Excavators, Compactors, Telehandlers, Skid Steer Loaders and Pick and Carry
crane. A vast network of 53 dealers and over 370 outlets throughout the country
along with a world-class customer service network support JCB.
JCB India is the No.1
construction equipment manufacturer in India. How would you describe your
growth in the last few years? What has been the current utilisation level of
your plants in India?
You are right. We are the largest construction equipment
making company in India and when you say we are the largest, we have a lot of
responsibilities as well to look after our customers. We are the largest not
only in terms of volumes, but also in terms of distribution. We have over 370
outlets and 54 dealers. We are very focussed on training and developing them in
the dealerships. Moreover, as an organistion, we are very focussed on product
support activities. If you look at overall the growth in the industry, like the
road sector or the power sector, a lot of infrastructure development is going
on which is required. There was a blip or slight slowdown in 2008-09 when the
global recession happened. But again, we are on the path of growth.
What has been the current
utilisation level of your plants in India?
We have the world’s largest backhoe loader plant in
Ballabgarh, which can manufacture 100 machines a day per shift. We also have
plants in Pune. So overall, our utilsation is quite high. I can’t give you a
percentage because this depends on the shift we have. And also there is constant growth in the
systems to improve productivity.
With increasing competition
in the segment, what strategies are you implementing to retain your
marketshare?
Our chairman (Sir Anthony Paul Bamford of J.C. Bamford ,
UK) clearly said that we need to have the industry’s finest after-sales
support. Any company can sell. But supporting that product is very important.
And that is why we are very focussed on the product support aspects. We do a
lot of marketing which is natural because we intend to be the best among the
brands. But importantly, we are building a support aftersale infrastructure.
Other key aspect is our manufacturing excellence. We are a very process-driven company because
our MD Vipin Sondhi ensures that all our processes are followed to ensure that
the products that are manufactured are best-in-class.
How is your heavyline
equipment segment progressing in Pune?
We are obviously very large in the backhoe
segment. Our heavyline manufacturing plant was set up in 2006-07. So if you
look at it from that perspective, we are growing year-on-year and have expanded
our product range. We now have excavators, which are in the 8-tonne, 14-tonne
segments, and 3 variants in 20-tonne segment. We have virtually filled all the
markets with those excavators. And it
does take time because of productivity improvement, customer contacts, etc. Lately
we have introduced the compaction equipment range, which is for the road
rollers. We have introduced the VMT8 68 new model, which is a tandem roller as
far as compaction. We have launched the VM 115, which is a soil compactor. And we are doing very well in all the
products. We already have the wheel-loader range which we are making in Pune.
We are constantly innovating our products.
What is the growth the
company is looking at in the coming years? And do you see steady infrastructure
growth or will there be some kind of a slowdown? What are your projections?
If you look at India as a country, the chances of a
slowdown are not much. There is a lot of infrastructure development that has to
happen. You yourself know how many roads have to be built and how many power
plants need to be made. And the telecom industry is also doing very well. But I
think, from our perspective, a lot of projects that was announced earlier have
been stalled. The government needs to focus on these projects and ensure that
they take off at the right pace. Also, big projects need to be announced very
quickly so that there is some positive sentiment. From an infrastructure point
of view, I think the growth is going to be there. And we do expect 10-15pc
growth in the next few years. We should
grow faster than the industry.
Is there any segment in the
construction equipment space that needs to be explored by JCB in India? Can you share your views on that?
When you look at the number of products that we have
launched in the last few years i.e. range of excavators, compaction equipment,
wheel-loaders, etc, we constantly upgrade to have the best-in-class among our
peers. We have also launched the lift-all range. But there is a lot of
mechanistaion that needs to be done. There is a product called
telehandlers---telescopic handlers which lifts paletised products. It is not
only safe, but highly productive. So
that concept needs to come in India. It is very important that people who look
for building houses look for mechanistion. That is a product which we can look
at and introduce. Right now, people think that it will replace manual labour
which is not the case.
What about your export
markets? You had earlier said that JCB has exported in small batches to
countries like Indonesia.
If you look at India as a market, we are very aligned
with the SAARC nations. So it’s Nepal, Bhutan Bangladesh, Sri Lanka. Out of
them, some of the countries like Nepal and Sri Lanka have been affected by the
political problems. But the industry is going to pick up there because they too
need a lot of infrastructure. So that is our prime focus. We do not intend to
export our products in the developed markets because that is looked after by
JCB’s UK operations which meet their specifications.
How important are tier II
and tier III cities for JCB India?
It is extremely important for us. This is because the
growth of the Indian economy will be underpinned not only from the metro
cities, but also from tier-II and tier III cities. You will find a lot of
highways passing through tier II and tier III cities. So these cities are as
indispensable as any metro city for us. If we give them a solution to build the
infrastructure quickly on mechanised things, then they are willing to look at
it. In the rural markets, you can show them how you can do a fishery or a pond
with a backhoe loader without any manual labour. It is going to save a lot of
effort. That’s why a non-metro city is important because it is going to give us
additional volumes and expand the markets and the applications.
JCB has recently launched
an EcoMaxx engine, which the company claims to be a world-class
indigenously-developed engine. What are the opportunities that you foresee from
this engine?
The very same engine is already there in the UK for the
past 5-6 years. It’s on 140,000 JCB
machines globally. So we have a proven engine that we are manufacturing
globally with the same technology. Secondly, we have also proved that we have
the best engine as we produced the world’s fastest diesel car-Dieselmaxx. So
that technology is the same. It’s a BS-III engine which meets the new emission
norms. It is the most fuel-efficient engine in construction equipment in India.
And it’s got 16 valves in products such as backhoe loaders. So it has more
forces. The third point is that it still meets the BS-III norms, but still not
turbocharged. So, most BS-III engines are turbocharged. So that’s why our
products are fuel-economical.
You have talked about your
design centre, can you tell us what it is all about? Is it contributing to only JCB products in
India or your global operations? And
what kind of activities is happening over there?
The design centre is in Pune. And it designs not only for
India, but for JCB use worldwide, either partly or fully. So they are a batch
of young engineers there and learning and designing things. There are about 60
odd people there. They have all the technology there to design machines or
components. The centre, which is having a dedicated team for the said
activities, is expanding and will become big one day. The designers are continuously
innovating.
How your merchandise
business like apparels, shoes, etc, progressing? And how many dealer outlets
have you earmarked for this?
If you look at the apparels and other merchandises, we
sell only through our dealers. Our business is growing in this vertical because
there are a lot of customers who see a display at out outlets and eventually
buy it. So that’s a good expanding line of business. As far as safety shoes are
concerned, they are managed by a company called Rehman Industries, who are
India’s second largest shoe producer and one of the largest in the world. So
safety shoes are doing very well in the industry circles. Our designed-products are manufactured by
Rehman Industries. They will also expand
their capacities.
The automotive industry is
seeing an increasing number of explorations in the ‘Nano’ segment. So can we
expect the same from the construction equipment making industry in India? Can
we expect a similar initiative by JCB India?
Right now, I can’t answer this question.
Because people upgrade from cycles to motorcycles and then to cars. I think Tatas were successful because they
wanted to offer a better lifestyle to consumers. So they introduced the Nano.
People buy tractors for their living because they are farmers. But when it
comes to construction equipment, it needs to move things. I don’t know how much
cheaper you can make it because if it’s ultra-cheap, you won’t be able to move
it. You can’t remove steel from the equipment, which is a basic input. This is
because basic products and basic levels have to be incorporated at a certain
level to actually have the productivity that is required for the project. Now,
if you have to finish a project in a shorter timeframe, and you get cheaper
equipment from China, it might break down and may not be able to push the
amount of earth that is required. Furthermore, the project may not get timely
completion. Here it is absolutely important that the product is right for the
project. But you are right. Can we have a
more affordable product? Probably at a later stage, but not in a ‘Nano’
style. You need to have a product which
is absolutely able to do the job.