In the current market condition, it is important for companies to focus on delivering the highest value to customers and with a sense of urgency. To be closer to the customers companies should focus on making in India.
– Vivekanand Vanmeeganathan, Managing Director, Caterpillar India

Heavy equipment manufacturing major Caterpillar is optimistic about India. Vivekanand Vanmeeganathan, Managing Director, Caterpillar India Pvt Ltd speaks to Subhajit Roy and talks about the company’s commitments to the Indian market. He says, “India is the only promising market in the world at this point of time especially for mining.”

What are your commitments to ‘Make in India’?
Caterpillar made its entry in to the Indian market in the 1930s. It has been more than four decades that we have started manufacturing in India. Over the years, we have built significant presence across construction, resource, energy and transportation segments. Today, overall investment of Caterpillar in India stands at over a billion dollars. That clearly tells the kind of opportunity the Indian market poses for Caterpillar and how serious we are about this market.

What is the ‘policy push’ you expect will make the ‘Make in India’ initiative successful?
Today everyone recognises India as a huge market having tremendous potential. At this point of time, we need the momentum to push and then capitalise on the potential which translates into opportunity. There is a good amount of market sentiment which is currently prevailing by virtue of roadblocks.

Could you explain to us these roadblocks?
Land acquisition and environmental clearances are the major roadblocks for mining and construction sectors respectively. Of late, the government is focusing on removing these roadblocks. As a result, the mining sector is witnessing significant momentum; and work on stalled projects has also started.   

India’s infrastructure need is definitely not keeping pace with the expectation of what the country needs. There is a need to have more aggressive infrastructure plans coupled with some of the ambitious plans of Government of India like building smart cities.

How is Caterpillar gearing up to increase its market share out of the expected revival?
Caterpillar’s serves the resource industry which pre-dominantly consists of mining and construction industries. We have a strong manufacturing footprint across all sectors. Incidentally over the past 3 years demand for all these sectors has significantly gone down which eventually leads to under utilisation of capacity. Once the momentum starts picking up we will quickly get to the optimal utilisation of capacity and more so will start investing for the future. There is a significant gap against the current requirement and also future needs are significantly higher. So we need to bridge the gap and then move faster than what the market wants.

How much you plan to invest and by when?
It’s still under discussion. Today nobody has a clear idea about when the threshold will change and India will start seeing growth, though the capacity utilisation is getting better. We need to see how sustainable and exponential this growth is going to be and based on that the timeline would be decided.

Apart from mining products, are you going to localise other products too?
India is the only promising market in the world at this point of time especially for mining. So the customer base is here. But in this tough market condition, the company who stays closer to the customers will only survive. And to be closer to the customers one needs to make in India. We have the largest product portfolio for mining equipment – both underground and surface. So we need to reach the economies of scale for localising other products.