An interview with Mr. S K Jaruhar, Advisor – Support Services, Kobelco Construction Equipment India
What are the milestones achieved by your company?
The Company started its operations in 2007 and has grown into a large manufacturer of Construction equipment which are preferred by the users in most common applications. Some of the key milestones in this journey:
- Setting up of a world-class manufacturing facility in 2010-11 complying to the Quality standards of Kobelco, Japan.
- Introduction of the HD (Heavy-duty) series in 2013 based on field feedback from Indian users.
- Scaling up of the manufacturing capacity to 2000 units per year and even beyond. Addition of the complete range of models from
14T to 50T. - Introduction of the XD (Xtreme duty) series in 2017.
- Export of Made-in-India excavators from 2013-14 onwards.
- Achieved Y-o-Y growth over the years despite the market fluctuations.
- Achieved a leading position in the High-end market segment.
Quality and pricing – how do you balance this equation?
This is a challenge from the very beginning. Value perception by the customers has improved over the years but remains a major concern. Lack of regulations on emission controls and safety increase the impact as the players at the lower end of the Value chain continue to dominate the market. Things are likely to improve as some regulations are expected in the near future and awareness among the customers is expected to improve.
On the market demand dynamics…
The CE industry is passing through a relatively lean phase since the beginning of the current financial year and is struggling to get out of it. The improvement is nominal and slow and it is rather uncertain when we can expect to be moving ahead at the previous year’s pace. Most industry watchers hope for a definitely better 2020-21 but the next few months would also be vital.
What are the problems that are proving as stumbling blocks for the growth of this sector?
Liquidity has been the critical factor affecting work progress all over the country. The NBFC issue also caused major impact on the industry. The General elections have a substantial impact too, as the Govt. focus shifts during and immediately after due to other priorities. The RBI and the Finance Ministry have been taking steps to improve the situation but so far the results are barely visible.
To make deeper inroads into the market…
Over the past decade, KOBELCO has been able to continue a positive growth till the last financial year. However, from the very beginning of this year, there was a slump from which we are possibly coming out as the trend for the past two months have shown. However, we are still having to hold back our plans for scaling up our capacity. It may be some time before we can revive the same.