It’s been a ‘True Blue Evolution’ for Kobelco Construction Equipment India Pvt Ltd (KCEI), a subsidiary of Kobelco Construction Machinery (KCM) since its establishment in India in 2007. The company has left a major impact on CE sector consciousness through the medium of its excavator and crane products. In Kolkata for a mining exhibition, Vikram Sharma, Advisor (India & South Asia) (VS) and E Moses Ebenezer, Vice President – Business Development, (Eme) Kobelco Construction Equipment India Pvt Ltd spoke to Shrikant Rao about the company’s products, plans going forward including bauma Conexpo 2018….
We are at a crucial juncture where we are about to jump into the next year, there is an election coming up soon and there appears to urgency to get projects actioned. What does that mean to you from a Kobelco business development perspective?
VS: Basically this exhibition is critical for us because Kobelco has been a predominant construction equipment player, but in the mining segment we haven’t actually put enough focus. We wanted to first ensure stability in the construction equipment business and then move into mining equipment business. So, after the success of construction equipment – we are one of the very well recognised brand for fuel saving and longevity of working and our machines gets used for 20-25,000 hours – we have also decided to focus on selling our machine to mining which has become one of the biggest business in the last few years after privatisation of coal etc. So, we are slowly started shifting our focus into mining. We are specifically focused on 50 ton and 85 ton machines in India.
Tell us about the products that have been recently introduced?
EME: Currently with our experience in India we have made our first 50 ton machine a few months back and we have tested it. Our idea was to introduce this machine at this exhibition and tell the mining world that we have an answer for this requirement. We are completely prepared for it. One model, SK-520 which is a 52 ton tracked excavator with a 3.1 cubic metre bucket used for coal mining, has been officially launched. This machine is comparable with any top model in India and is one of the best now in terms of fuel consumption and productivity. It has already been accepted by many of the mining companies. This machine is made in India – most of the engine and the hydraulics comes from Japan – but this is more designed for local mining conditions. The structure is made in India and many of the components including the cabin which people talk about very highly – they are world class cabins operator safety and operator comfort embedded — is manufactured here.
We know it’s a huge market out there in terms of mining equipment. Have you been able to assess the national requirements for such machines?
VS: When you look at 38 tonne and 50 tonne excavators sales you get an idea of the size of the market, it is an indicator, but then mining itself goes through very cyclical phases and then there are exterior reasons. For example, when China slows down granite exports it leaves an impact on the industry. Let’s say that we haven’t done a formal assessment of the excavation being done but yes we know the number of equipment sold every year of 38 ton and above which are largely the mining machines. By now we have a very fair idea because in the 38 ton segment, which we launched about 2 years back, we are the clear leaders.
We have our own strategy based on historical data and we also keep a close watch of national coal production and how Coal India is planning to step up production. It is just that now with experience behind us we have decided to get seriously into mining and are offering solutions in a full-fledged manner.
Our machines are reliable and are doing well and wanted to go to the next step. After discussions and inputs from Japan and feedback we came up with the SK520, which was under development, over the last two and half years. This machine has great construction features which are specific to India’s tough conditions. So it is a great improvement from the earlier machines. Now we are very sure that like the position we have achieved in the 38 ton category will also obtain in the 50 ton category also in a few years’ time.
How do you read the situation in the coal industry? From an equipment supplier’s perspective do you see things moving?
VS: Surely we see that things are moving ahead in the coal sector. One sees a lot of changes than before in terms of the type of contracts now getting finalised, the periods are longer, quantities are much higher and so are the expectations. With larger contracts we find contractors are now getting more aggressive in terms of opting for bigger 85-90 ton machines and that gives us an impetus to step up to support the developments being planned.
Based on the feedback from the market what are the current trends? Do you see sophistication in usage of products?
EME: See one thing about mining is people that people are very focused. Most of the time people are now talking about higher capacity machines like 50 ton and above. The industry is slowly shifting to the bigger machines; that is one indication which we are getting; there is also a shift in terms of a reduction in the number of machines operating in mines – there is a movement towards better safety norms, mine owners are now opting to employ bigger machines. Application of technologies with emphasis on safety are now the new norm. We definitely see people talking about more attachments, asking for takeaway manuals, and the questions are generally now centered on areas like safety features like fire prevention, productivity, cost of the production etc. I would say there is great awareness and we need to be prepared with answers for more complex questions.
In a very extremely competitive equipment universe how do you see Kobelco being a differentiator?
VS: For one, we have always been a differentiator in terms of having the most fuel efficient machines. That is a kind of recognised fact in India now. Plus now, our focus we have taken now is on productivity not production. Our machine has to perform and give production at very reasonable fuel levels for it to become the most cost effective machine. We had a visitor today who was talking of the Kobelco machine he bought in 2010 and how it continues to work at the same speed and with the same productivity for the last 8 years underlining our reliability to other customers. Reliability and productivity are the main differentiators to which we have brought the focus on.
Considering the fact that there is an urgency to get projects actioned what is Kobelco doing to meet the requirements in terms of scaling up of manufacturing?
VS: We are regularly scaling up production. Our current exercise of capacity expansion is getting over next month. We will again step up production from maybe January or February. We have expanded the factory size, and added more production lines.
So now coming to the construction side of your business what is happening there? What are the products that one can look forward to from Kobelco with bauma Conexpo 2018 coming up?
VS: In terms of Kobelco products with sectors like road construction opening up in a big way we are already seeing busy times. Road segment is seeing maximum growth. As a group we are into excavators and cranes. From the point of view of the exhibition which is coming up we have already introduced a locally produced 52 ton excavator. That will be displayed there along with our cranes. We are all geared for Bauma Conexpo India 2018 in Gurgaon.
Going forward how do you see the prospects for your business going forward?
VS: I think for the next 3-4 years we can easily take a double digit growth for the industry.
How has Kobelco’s performance been this year?
VS: Very good. Since 2007, we have been constantly growing up in market share and when we look at the high end machines – not the low cost and old technology equipment – we clearly have a 30-35 per cent market share. Among all the manufacturers we are the leaders with better designed machines with high quality engines and superior electronics.
From a marketing perspective what is your strategy to take the company business forward?
EME: Along with our current products we will be looking at some businesses like attachments. By this I mean those which can raise the levels of safety among workers. We want people to use the right kind of attachments in our equipment. Kobelco will also be looking at introducing demolition machines in the future because a large number of old structures across India will need to be demolished with safety to prevent accidents.