“Our philosophy is very clear: we go for maximum localisation, while trying to maintain our quality standards,” says Ramesh Palagiri, Managing Director and CEO, Wirtgen India Pvt. Ltd.

Wirtgen Group is present as a dependable local partner around the globe. Whether machine sales, applications consulting, original spare parts, or mobile local service directly on the construction site, Wirtgen has created its value. In this interview, Ramesh Palagiri talks about Wirtgen’s strong brand value, innovative technologies and local customer service.

Could you brief us on the recent development in Wirtgen India?
The main activity could have been the launch of Hamm Tandem Rollers. These rollers complement our existing range of soil compactors. With that, we are able cater to the most of the market demand of compaction. Also, at EXCON, we launched Vogele Dash 3 range of pavers.

The new Dash 3 range of pavers has a lot of innovative features. The basic idea of this is to increase production, and reduce operation cost, fuel consumption. It also has a number of operator-finally benefits like paved off and auto supply. With this launch of the Dash 3 range of the pavers, we will re-establish our stand as the world market leader in compaction equipment segment.

We also launched our new WR 240 cold recycler and soil stabiliser. This is the new technology and fast catching up in India.

How optimistic you are about the acceptance of these next-gen products?
We have started working hard to promote milling technology in India, 4 years back. However, in the last 3 – 4 years with a lot of interactions with our customers and authorities, there is a great realisation that if you want to maintain the quality of the products, we need to mill and recycle which is also economical. Hence, milling today is no more a new technology; today more than 100 million machines are operating in the country. I am sure that same will happen with the recycling in the coming years. With the shortage of aggregates, recycling will become more popular.

What is the market status?
Market for the highway class of pavers is dramatically down. As NHDP program is going very slow, the BOT projects are either stalled, stopped, or going very slow. Today most of the activities are on the state highways, PWD jobs, or the city roads jobs. Whatever has been downturn for Vogele has been made up by Hamm because this compactor was launched 2 years back and where we were reaching out to the retail contractors. This year would be a flat for us, and our turnover would be the same as the last year. However, at the same time, we are hopeful that the things will pick up but it may take at least a year.

What kind of investment are you making?
We have invested around ` 20 crore for the fourth bay at the existing Pune facility. We are also setting up a new plant investing around ` 60 crore within the same facility.

What are the products you are going to develop at new facilities?
We will start assembling Vogele pavers at the fourth bay. We’ll manufacture crushing and screening plants in the new facility. Our philosophy is very clear: we go for maximum localisation, while trying to maintain our quality standards. We have done that with Hamm rollers. If you see our rollers, what we have displayed here, you cannot differentiate which one is imported. There are imported machines, but most customers cannot differentiate which is imported and which is local. We are using the best of components; we are going for Cummins engine. The idea is that tomorrow when you decide to use India as a manufacturing base, you should be able to import and export the same product. We have just started that with compactors.

In terms of the volume, how was the 2013?
The year 2013 was flat for us. Compactors have almost 40 per cent more than last year; however, pavers were down. As per as market share is concern, we are still doing well. On Hamm rollers, we are continuing to increase the market share. This year we will end up with 15 per cent market share. We are on course to reach our target of 20 per cent market share in the next couple of years.

Are you doing any kind of innovative marketing strategy?
Except for compactors, we have to do innovative marketing for our products. Our strength is that we are not just the machines manufacturing company; we are a solution provider. Technology wise, we are a generation ahead. Our after-sales service is also our strength because we go direct; we don’t have dealers. In 55 countries including India, we operate directly not through the dealers. In small countries like Sri Lanka, we have dealers. Our strength is product, application and direct service.

Do you feel that the concept of PPP is a failure?
It depends on how you look at. The government does not have the money to build roads. People have to pay toll and that has to be collected by who has built the road, and somebody has to risk long-term investment. Hence, I think PPP has to continue. You see the road anywhere in the world, there is hardly any PPP. You look at Germany, all the roads are owned by the government only. In India we are doing because of necessity. If NHDP program goes at the pace it is going, it’ll take 20 years to complete — that’s so long. If you have to complete that in 5 years — that was the plan actually — you have to go for build–operate–transfer (BOT). I think long-term funding for infrastructure projects, strict pre-qualification of the contractors and change in modern construction agreement are the three steps necessity of the success of PPP.