— Ajay Shankar, Country Manager, Caterpillar India
Caterpillar, the global construction equipment major, has been active in India since the 1930s. Today, Caterpillar India employs more than 10,000 people and its state-of-the-art manufacturing facilities are located at Hosur, Thiruvallur, Puducherry and Aurangabad. Ajay Shankar, in an email interaction with Sandeep Menezes, talks about the growth prospects in the earthmoving and construction equipment sector in India.
What are your expectations from the new government on infrastructure development?
According to the Cabinet Committee on Investment, 253 infrastructure projects in the power, coal, steel, petroleum and natural gas, and road transport and highways sectors with an investment of Rs. 12.82 lakh crore are held for various clearances.
Even construction work in India is prone to disputes. Key factors responsible for these disputes include land acquisition and clearance-related delays after the tendering stage. Although the Land Acquisition Act 1894 was recently replaced, the process to obtain clearances is still time consuming. Timely and fair settlement of these impediments is essential to maintain progress. The government should also ease the process of project clearance, especially where large projects are concerned, and set up special courts for speedy settlement of land acquisition cases.
How do you think the growth scenario will evolve?
According to a recent report by the Ministry of Commerce, India’s total export-import trade during the year 2013-14 was $763 billion, of which exports were $312 billion and imports $451 billion. To grow economically, it is imperative that our exports continue to grow at a fast pace. Although there is strong relationship between exports and manufacturing, the manufacturing sector in our GDP has remained stagnant at around 15 per cent during the last 10 years.
What are the main demand drivers in the construction equipment sector?
The general mood in the construction equipment segment is that there is a fleet of idle machines which are not yet deployed, as a result deferring any new purchases. We expect that to change due to the movement from the government in accelerating investment in infrastructure projects.
According to industry bodies, 994 km of highways has been awarded where work has to be started and 17,103 km of highways has to be awarded in 2013-14 and beyond. This will drive the demand for earthmoving and construction equipment with the new government in India. We believe that Caterpillar and its dealers are in a good position to help meet this demand.
India is seeing major technological changes in its construction equipment industry as demand for specialised and high-capacity equipment rises.
When it comes to operating and managing equipment and production, technology is playing a bigger role than ever. While customers understand the benefits technology can deliver, selecting the appropriate products and reporting tools can be challenging. New technologies need to be introduced through FDI policies that have easier norms for technology transfers, joint ventures and introduction of PPP projects.
To meet the customers growing demand, Caterpillar has introduced Cat Connect, a new marketing framework that simplifies and clarifies how technology can increase safety, efficiency and profitability. With Cat Connect it is easier to navigate our range of technological capabilities so customers can save money, increase productivity and improve safety. Customers can get in on any level, experiment and change or grow as needed.
How has the market accepted the new products Caterpillar launched at Excon 2013?
The Caterpillar exhibit at Excon 2013 featured two new machines specifically designed and built for businesses and applications in the region. The new Cat 950 GC Wheel Loader that was on display combines low operating costs with the durability, reliability and economy of proven Cat components to deliver productive performance.
Caterpillar also displayed two configurations of the new 320D Series 2 Hydraulic Excavator. The 320D can be configured with a standard or a long undercarriage, designated the 320D L. The 23.5/24.0-metric ton 320D/D L Series 2 uses a fuel-efficient, field-proven Cat C7.1 engine that delivers responsive power and extended durability. Customers are responding very favourably to the new offerings.
Going forward, what is Caterpillar’s future strategy in India?
We anticipate that better economic growth should result in an improvement in sales in both power systems and construction industries. The growth will vary in terms of the industries, but the build-out of infrastructure that must occur as the region urbanises is going to provide a large platform for growth. Caterpillar’s belief is that “the road to progress…must begin with a road.” Our global vision is to be a leader wherever we do business and the same holds true for India.
We are continuously ramping up our services and distribution network across India which will improve our capability to supply high quality service parts and highly skilled service engineers close to our customers. We have eight territorial dealerships across India owned by GMMCO and TIPL. With 150-plus dealer outlets and still growing, these include branch offices, area offices, retail outlets, workshops and site support.
We are investing in our operations to support the ever-increasing customer base here and we also have plans of launching other products in India which are in the pipeline.