Pakona Engineers (I) Pvt. Ltd has been at the forefront of pioneering breakthrough technology for flexible packaging machinery. The company has acquired the expertise and accumulated experience mainly in the field of Form / Fill / Seal machines which accounts for 60% of its total turnover. Rohit J. Shah talks about the high level of indigenous achieved by his company among other issues.
The construction equipment market has not witnessed growth this year because many projects failed to take off as planned. What does the future hold?
Most of the projects which are in pipeline will be released after the general elections in 2014. It will boost the infrastructure and equipment industry. We are looking at anything up to 50 per cent growth because the last couple of years have been really slow.
Don’t you think 50 per cent growth is being very optimistic?
It is only a startup for Pakona. Since last three years we are producing pipe manufacturing machines. To make the customers aware of such equipment being available in India, it will take time. But, once the awareness is spread, I am sure that everyone is going to look for such automatic machines.
What about the increasing pricing pressure on the customers?
We have kept our pricing very reasonable when compared to imported equipment since we are in the import substitute line. We keep on doing value engineering and maintain pricing. Costs can be controlled by manufacturers and offered to customers. Therefore, OEMs have to work really hard on value engineering.
Our equipment is not very expensive. They cost only around Rs.2 to 3 crore. Most of our customers finance the equipment themselves. But there are a few financing companies that have approved our products and are keen to finance it.
How has rupee depreciation affected your industry?
We are very comfortable with the rupee depreciation since imported equipment has become more expensive. Therefore, we have become more competitive compared to imported equipment.
What is the extent of localisation achieved in your products?
I would say that we have achieved around 95 per cent localisation. We started with technology from Italy wherein the first machine had almost 60 per cent imported components. Today, we manufacture and source more than 95 per cent of our equipment components from within India.
How does shortage of technicians and operators affect your segment of the industry?
When you purchase an automatic machine from us, say, to manufacture RCC pipes, then basically you are reducing your manpower requirement drastically. We use only 5 per cent manpower compared to the conventional spin technology line. We have our own training programmes for operators on handling the equipment.
Do you have any capex plans in future?
We have a good setup in Vadodara and we are expanding capacity by around 50 per cent. It’s a Rs.5-crore brownfield expansion at the same site, in Vadodara, and will be completed before the end of the current year. We have already started construction at the site.
Year 2012-13 was horrible but now, in 2013-14, things are slowly coming back to normal. Going forward, we expect a minimum growth of 50 per cent for Pakona.
Do you have plans to launch new products?
We have started offering this manhole. The machines are basically the same but we are offering a newer product that can be manufactured around our machine. The digging that happens for laying drainage lines bothers everyone. With the help of this machine the drainage line can be dug faster, by saving nearly 75 per cent time. This is the new requirement of the day.