JCB India Ltd is a fully owned subsidiary of JC Bamford Excavators Ltd, UK, one of the world’s leading manufacturers of earthmoving and construction equipment producing over 300 different models and sold in over 150 countries. In India, the company offers 24 different machines in seven product types. Vipin Sondhi, MD & CEO, JCB India Ltd, talks about the current status of Indian earthmoving and construction equipment with Renu Rajaram.
What is the current status of the Indian earthmoving and construction equipment industry?
The long-term prospects of the Indian earthmoving and construction equipment industry are strong given the increasing demand for world-class infrastructure in India. However, currently, we are witnessing a decline in the demand due to somewhat global economic slowdown but this is largely self-inflicted.
Issues like project execution, monitoring, land acquisition and environmental clearances are the main reasons that we are facing this slowdown. We are now seeing lot of reforms and initiatives being introduced by the government to battle these issues which should show positive results.
Setting up a Cabinet Committee on Investment, for example, is a positive step towards accelerating growth. The CCI has apparently cleared infrastructure projects which are stuck due to issues like land acquisition or environment. For example, CCI recently approved setting up two hydropower projects in Arunachal Pradesh. Very recently, it cleared 171 projects worth Rs.1.69 lakh crore. However, evidence on the ground is still to be seen.
Other than project execution, there are many other challenges that are hampering the growth of the earthmoving and construction equipment industry, such as import of low quality used equipment, lack of skilled manpower etc.
How equipped are we to meet the challenges in technology in equipment and machinery?
We are seeing major technological reforms in the Indian construction equipment industry as demand for specialised and high-capacity equipment is on the rise.
Safety has always been a critical component in the construction equipment industry. JCB has always focused on designing operator friendly and safe products. We have recently introduced machines with spacious cabins, ergonomically placed operator controls, reduced effort in braking etc.
What is JCB’s position in the earthmoving and construction equipment market?
JCB is a pioneer in the earthmoving and construction equipment industry and has always been regarded as a frontrunner when it comes to product innovation. Since the beginning, JCB products have led in performance, technological advancement and reliability.
We at JCB understand the project requirement and therefore manufacture products which are robust, custom built and highly fuel efficient and provide the best return on investment to our customers.
Our customer-centric approach is the reason we have maintained our leadership position in the Indian market. Over the years, we have strived at receiving continual feedback from the market and launched products accordingly. Our product offering has increased from three product lines and seven product variants in 2005 to seven product lines with 25 variants in 2013.
How is JCB placed to meet the surging demand in the construction segment?
JCB is setting up another world-class manufacturing facility in Jaipur which will help us in meeting the growing demand for our machines. Currently, JCB already has three world-class manufacturing units in Ballabgarh in Haryana and Pune in Maharashtra. Products like excavators, compactors and wheel-loaders are manufactured in Pune with a manufacturing capacity of over 4,500 machines per annum.
One of our biggest strengths is the strong distribution network and dealer outlets we provide to our large customer base across India. At present, we have 59 dealers and over 540 outlets operating in India who ensure that our machine reaches our customers in any part of the country.
In the future, JCB will continue to look for opportunities to expand, especially the distribution network through its outlets.
Continuing with its legacy, JCB will keep introducing products which are technologically advanced and offer great value to our customers in terms of revenue growth.
What are JCB India’s investment and expansion plans?
We have always had great belief in India’s growth story. If you look back, we expanded our Ballabgarh facility with an investment of Rs.300 crore in 2008-09 at a time when the economy was down globally as well as in India. Over Rs.130 crore went in the engine production facility which was set up in April 2011.
JCB is also setting up its fourth facility in Jaipur with a planned investment of Rs.500 crore. To begin with, we will manufacture fabrications which will go into JCB machines built in India.
JCB will continue to expand its manufacturing base as and when required.