India’s booming infrastructure sector is bringing the demand for all kinds of construction equipment. Manoj Kumar, Managing Director, Hess Concrete Machinery Pvt. Ltd. shares how the indian concrete equipment industry can grow over the years.Brief us on the status of concrete equipment industry in India.The infrastructure sector in India is traversing through one of its most interesting phases today. The substantial part of its development is poised for growth on account of industrialisation, urbanisation, economic development, and people’s rising expectations for improved quality of living. This will directly relate to housing, infrastructure, education, etc. With the significant investment opportunities emerging in this industry, a large number of international real estate players have entered the country and expecting further. India has a large middle-class population which is growing faster than most of the other countries. Rising income levels of a growing middle class along with increase in nuclear families will accelerate the need for basic amenities. Simultaneously, the rapid growth of the Indian economy has had a cascading effect on demand for commercial properties such as modern offices, warehouses, hotels, and retail shopping centres. India’s booming infrastructure sector is fuelling demand for all kinds of construction equipment. Thousands of kilometres of expressways and highways being laid across the subcontinent, builders and contractors are acquiring sophisticated equipment to execute the multimillion-dollar projects. Completion of projects on time requires specialised machines and easy to adopt technology which has become the requirement of every contractor and real estate companies to go for reliable equipment. Depending on labour-oriented activities isn’t all viable due to lack of experienced man power, time factor, and cost increase. The lack of awareness, delay in decision making, and dumping of low quality Chinese equipment are the major roadblock for quality products in India. If our political leadership took proper steps, they could sort out this issue and nobody could hold it for long period of time.
What are the major growth drivers for this market segment?Indian concrete equipment industry has been growing at a rapid pace in recent years after the entry of various foreign players. The Indian market situation indicates the potential expected to grow at a CAGR of 18 per cent over the next 5 years. Growing demand and expansion in all sectors, time-bound projects has made it necessary to use advanced machines rather going for small machines, where large man power is needed. The major growth factor will be total improvement in residential, commercial, and industrial segments. Apart from these, strategic policies of the government and timely implementation of the same will help improve the market. For example, the discussion progressing with Japanese, US and German governments could ensure major investment in India.
With the project timeliness is getting stiffer and consumer are becoming more techno-savvy, how do you foresee the shift in the usage pattern?In a mission of delivering quality equipment for the past 65 years, this will be a good opportunity for a company like Hess. Being known as market leader in concrete industry with best R&D facility and association with Siemens, Bosch Rexroth, Lenze, and SEW helps us overcome all the hurdles. After a proper market study and consultation with our associates, we derived our strategy to India. Based on these studies, we decided to start the production as well as after-sales service in major regions. Mainly the high import duty and freight costs drive the European equipment cost in India. To tackle this issue, we decided to start our own production and reduce the imports. Another area we understood on after-sales service as most of the Chinese companies are in a hit and run operation, and quality and service is last in their dictionary. We decided to address this in priority and 24/7 online service in progress. Automobile industry is focused on service, and construction and concrete industry also started to realise this. We are offering universal machines to produce variety products with less manpower, better quality, and higher output. Hess is completely focused in concrete industry, and we never enter into other areas. Hess is always working close with our clients as well as sub-suppliers to improve the machines and launching new products. Most of the innovations are based on the feedbacks from clients and market. Hess already have several patented system in this industry like variotronic vibration using servo motors where the life time and accuracy are 10 times better than a frequency drive, special filler box to provide smooth finish, more strength and brightness on paving stones, zero tolerance in the tamper head cylinders during, etc. All the Hess machines are equipped with a modem system which we can log in through a telephone line to check for electrical, electronic, and software problems. All the production data —including operator, mix design, and production date and time — will be available in the PLC itself.
How do you position to grab maximum opportunities from increasing demand? We decided to focus on markets like India, Brazil and Mexico with production and service facilities for handling systems and main machine production only in Germany. In this way, we could control the market with series of production and installation in a systematic way. This will provide us enough time to install within the stipulated time schedule. Now a day’s time is money so on-time installation and minimum breakdowns are important and Hess is dedicated for that. As we are offering completely automised plants there are no delay in the projects. We are able to manufacture the product from our machine withfastest cycle time. The maximum utilisation of machine hours is possible.Now the mentality is changed, and quality awareness is happening with the users. The architects and developers strongly insist for the right products which will reduce the wastes and man power and speed up the construction procedure. Most of the projects are time based, and environmental points are very important. In such a scenario, the growing market like India needed the right technology. Another important factor is the exterior of the building. Earlier we spend more money on interior, and nowadays more or equal amount is spending on exterior. Due to the influence of foreign trends and modern architecture, the latest fashion trends and colours which started in the construction industry too. Influential factors are the thermal insulation, sound insulation, fire resistance, faster construction, and saving in structural and foundation loads. There is a huge potential for these products as well as opening of new business line for the investors. These are the factors which could help Hess grab maximum opportunities.
Please brief us on your product bouquet under concrete equipment business.Hess machines are designed to cater construction industry, in particular to concrete, fly ash, AAC, and steel slag. Mainly it is used for the production of concrete blocks, interlocking pavers, flag tiles, kerb stones, heel kerbs, garden-scaping and landscaping products, lightweight concrete, fly ash bricks, concrete pipes, wet press systems, and moulds for the industry. All the Hess products are available in India either as a total import or partial import. In block industry, we do have mobile machines and in static plants with various capacities. The capacity of mixing plant ranges from 500-3,750 litres. In AAC industry, we have the plants from 200-2,050 cubic metres per day. In handling, we are offering 4 tonnes, 10 tonnes, 14 tonnes, 18 tonnes and 24 tonnes with levels ranging from 6 to 30. For after-sales service and parts easierwith Hess, we are using the original part numbers and serial numbers which can be obtain from the original supplier or from any of the spare part shops. Secondly, we have 24/7 hotline service available from Germany. Engineers from India and Europe are regularly available with us, due to the number of installations and commissioning in India.
Tell us more on your latest launches or key products in this spectrum including features and technical specifications.German quality and service with Indian price is our strategy in India, and over a period of time we’re planning to do certain exports. To succeed in this, we started the production facility in India and started manufacturing almost all the handling systems in India. The main machine and control system will import from Germany as they considered as high tech areas which needs lot of attention and focus. AAC is the main area which is the key at the moment, and we designed smaller plants for countries like India and the first one is under installation near Delhi. We already have good number of suppliers, and this will create further jobs out of India.
What sort of expansion plans you have as far as Indian market is concerned?At present, we are concentrating on the completion of ongoing projects and setting up the new facility. This new facility is utilised for the assembly of machines, localisation of noncritical parts and spare-part supply. This unit will support to block machines, AAC plants, pipe plants, and other accessories which Hess scope is involved. Apart from the normal concrete industry, we are concentrating on lightweight AAC plants, pipe plants, fly-ash based products, and steel briquetting equipment. More than 35 employees are working for Hess in India in the process of opening sales and service facilities in Mumbai, Delhi and Kolkata. This will give us a major position in the industry as the engineers near to the customer will give a big comfort to the investors.
Are you also looking at extending the dealer/supplier network?We have recently inaugurated our production and assembly unit in Bengaluru in February 2013. We have full-fledged after-sales service team with more than 20 engineers and essential spares for all type of machineries, which are readily available at our service division. Sooner spare-parts division will be opened in across the country to ensure prompt and on-time customer service. We have multiple installations happening in different parts of the country so our engineers are readily available for servicing on 24/7. At the same time, we are in the thought process of appointing dealers in different states, but this will take some more time to decide on it.