You can have a great Ferrari, but you need to have a competent driver to make its performance sustainable.

Subhasis Das,
Vice President, Sandvik Mining and Rock Technology India

Of late, Sandvik India has renewed its focus by combining both construction and mining businesses. Could you shed some light on this?
Yes, mining and construction businesses have been merged into a new business area, Sandvik Mining and Rock Technology. There are a lot of synergies at the back end and also in the front lines. We were together till 2012. However the mining industry was then cruising through the ‘super cycle’ and needed more focus. Now, when the market has stabilised, rather we are witnessing de-growth, we wanted to utilise our entire resources optimally to enhance efficiency. Therefore, we decided to combine our two businesses and today we are witnessing improved performance in terms of sales and productivity.

Can we ever really expect to see the ‘super growth’ of the past again?
We might not see the ‘super growth’ globally soon that we have witnessed in 2008-09. However Indian economy is expected to grow exponentially with GDP to hit US$ 3 trillion by 2020. I feel that the economy will grow at much faster rate i.e. around 7-8 per cent CAGR (Compound Annual Growth Rate). From a construction and mining equipment manufacturer perspective, we foresee increased spending in terms of CAPEX.

Keeping this positive economic growth in mind, what will be your strategy?
We are launching advanced technologies to meet the Indian requirements. Our globally proven bolter miners that are used in underground coal mining will be introduced in the Indian market soon. These machines are also designed for rapid entry roadway development operations. We have already received an order from Coal India and the machine will be commissioned in early 2017.

More importantly, we are working more on the building competency and we have set up a training academy at Nagpur in this regard.  One may have a sophisticated machine. But if he/she doesn’t know how to maintain and operate it to its highest level of productivity continuously, won’t be able to generate sustainable revenue. In the mining industry this is key challenge. You can have a great Ferrari, but you need to have a competent driver to run it and make its performance sustainable.

Do you foresee any momentum in the construction segment?
There is an overall 6-7 per cent growth expected in infrastructure, construction and real estate business for the next 5-10 years. I see a boost in the dimensional stones like granite and marble. Chinese market for polished stone has recently picked up so we see some upward movement. There are positive movements in the aggregate market too. As sand mining is becoming illegal in many parts of the world, the requirement for artificial sand is catching up. We have technology to break sandstone faster to make sand which is used as building material. We also have different drills which are used by the aggregate industry. Demand for advanced crushing and screening machines is also picking up. At present, road and tunnel connection is driving the growth of construction industry. However, once the construction activities for smart cities take the desired pace, we will see more activities.

As the government plans huge development initiatives, what kind of growth you expect in next five years for Sandvik in India?
We are growing at a CAGR of 20 per cent for the past 2-3 years and would like to maintain the same at least for next 2 years.