Manoj Kumar, Managing Director of TOP-WERK Hess Concrete Machinery India Pvt Ltd explains how the existence of financial constraints within SMEs can derail ‘Make in India’ initiative. He also delves into what needs to be done to improve the lending attitude of banks.

With a facility in Bengaluru, you seem to be in a very aggressive mode. What is your plan for Indian market?
We are in India for the last 5 years and started off with local production facility in 2013. Today we manufacture products for the three segments – cement right concrete for residential and commercial construction; wet casting concrete for infrastructure and industrial construction; and light-weight concreting for better thermal insulation. Now we have decided to export from the Bengaluru facility.

The government has announced 3 per cent interest subsidy on the export oriented businesses. Due to the low inflation, reduced fuel prices and lowest interest rates, the growth rate in the residential construction sector is coming somewhere close by. However, the biggest problem is the attitude of the banks which needs to be changed substantially. The RBI and Finance Ministry have already expressed their displeasure in this regard and RBI has allowed a move aimed at incentivising banks to recover appropriate value in respect of NPAs (non-performing assets). But the banks are reluctant to do that because they feel that they are in the safe place and the problems are there with the customers.

The foreign companies are ready to do the financing which is not really the industry is looking for. For the companies like Hess, we are getting money from out and do the investment. But the real challenge is for the local manufacturers and the new entrants!

Another sector is road construction. Though Road Minister Nitin Gadkari is ambitious of building 30-kms roads per day, we need to ensure proper design of the roads, implementation within stipulated time frame, address environmental issues, and maintain water bodies while building the roads. However these areas are still unanswered!

Lending attitude of banks is very critical at this revival stage of the industries. Do you have any suggestions to improve the attitude of banks when it comes to lending?
The banks have already been instructed by the government to support the industries. However they are very much focused on the automobile and real estate industries. They pay no attention to medium- and small-scale industries. This needs to change. And it is possible if bank management pass on the information to the bottom line to support the industries across the spectrum not only to automobile and real estate sectors. To help realise the Prime Minister’s ‘Make in India’ mission, the financial institutions have to come up.

If we talk about the recent scams, I believe the bank top managements are involved in it. Such massive misappropriations are not possible without the involvement of top management of the banks.

How do you look at the interest rates right now?
Interest rate is already on the lower level. Today the banks have enough funding available with them but the question is how to utilise them. They should have technical teams to create lending criteria post analysing what are the materials required, how they can convert into real manufacturing, and how to ensure that the customer is going to pay back.

In India, big construction equipment manufacturers have recently started their finance wings to support their customers. Do you have any such plans?
We are already talking to a few private bankers. I don’t think the government-owned banks will come up so easily. If the government-owned banks take some proactive steps to support the industry, then definitely we will come. At Hess, is has been a pretty successful journey over the past five years. We believe in Indian market and there is a long way to go.