Berco Group of Italy supplies undercarriages on a just-in time basis to its main earthmoving machinery OEMs across the world for initial assembly. S. Sakthi Kumar, in an interaction with Sandeep Menezes, talks about the plight of OEMs and how it is affecting Berco.
With the construction equipment industry not witnessing growth, is there increasing pressure from OEMs to reduce prices?
As far as Berco is concerned, our import content is more. Therefore, we were badly affected by the currency fluctuations. To overcome this scenario, we have decided to look for some local suppliers in India to develop parts. Every customer is urging us to bring down our cost which is not possible as of now. So, we plan to focus more on localising the product.
What is the extent of imported components in Berco’s products?
As of now, at least 95 per cent of our components are imported. We are trying to reach a localisation level of at least 35 to 40 per cent in next one year and are confident of achieving this.
What has been the impact of rupee depreciation on Berco’s operations in India?
We are affected like every other player. But, although the market was very down, our business has done better. We were down by 5 per cent in the business last year compared to the earlier period.
Which segments do you feel will witness higher growth in near future?
We feel that mining and coal segments will witness higher growth in near future irrespective of whichever government comes to power. Even if the new government comes in, they have to clear projects and then release tenders; therefore, the real activity will happen only around January 2015.
Do Indian customers understand product lifecycle costs or do they still look at initial price?
The trend is definitely changing. We are witnessing certain positive signals and slowly things are improving. But most of our OEMs are badly affected in the domestic market while a few have started exporting which ultimately gives us some good business.
Can you tell us about Berco’s current exports?
Berco’s exports currently are very less. We export only to our own companies, Berco USA or Berco China. We have set up our machine-shop at our facility in Hyderabad where we manufacture shafts for rollers, which we have started exporting to our parent organisation in Italy as well as to China.
Does Berco have any growth targets? And did you launch any new products?
We foresee some good prospects. If we believe in it and work towards it, then it will certainly happen. We have recently started this complete frame assembly set for Indian customers who manufacture drill machines, mini pavers or mining equipment like roof support machines.
We are looking at targeting new OEMs such as those manufacturing excavators and buses.
Gates exhibits range of hydraulic and industrial hoses
Gates India, an active participant right from the first edition of Excon, once again put up a “stellar show” at Excon 2013, presenting the latest in its portfolio to meet the challenging demands of the customers.
Gates exhibited a range of hydraulic and industrial hoses and power transmission belts used in various segments of construction, earthmoving and mining machines. The MegaSys range of hoses and couplings, the micro V and synchronous belts used on large engines, attracted the visitors’ attention along with a range of other complimentary products like ball valves, hose protection products and quick couplers.
Segment specialist products like Pilot line hoses targeted at the excavator market and AG hose for tipping gear and cranes were also on display.
Gates also launched three new products, namely 20 4XH spiral wire hose, far exceeding the requirements of EN standard; G2XH hose for high temperature air and oil application, a class leading hose for the drilling rig segment; and Plaster hose to convey cement and mortar for mechanised plastering.
Another highlight was the metal tube and tube, hose and hybrid assemblies from the new tube assembly plant at Gates, Faridabad. The leak free technologies offered by Gates — ORFS end forming and BSP end forming elicited lot of interest among potential customers.
Even in these challenging times for the infrastructure industry, Gates’ participation and offering was received well and a number of business opportunities were generated along with feedback from end users.