CEBBCO is part of the JN Group of Industries, which has traditionally been a dealer for Tata Motors vehicles in the North and Central part of India. It was in the 1980s that Mr. Kailash Gupta, Chairman of CEBBCO, strongly felt the need for fabricating tipper and cargo bodies both for Tata Motors and the Vehicle Factory Jabalpur which supplies fully-built vehicles to the Defence sector. The central location and the proximity to OEMs became inherent strengths for CEBBCO.
“We want to be the No.1 tipper manufacturer in India and in the next few years, a significant player in the global market as well”, says Mr. Ajay Gupta, CEO and Director of CEBBCO. From selling bed sheets to tippers, it has been a challenging and equally rewarding experience for Mr. Ajay Gupta, who joined CEBBCO in 2004 when the turnover was just Rs. 18 crores. But CEBBCO closed 2007-08 with turnover of Rs. 220 crores. For the current year, the turnover target is even much higher.
The company has registered a 100 per cent growth year-on-year in the last four years, and hopes to continue the good run despite tough market conditions. CEBBCO currently manufactures tippers and trailers. The company has drawn ambitious plans to widen its product portfolio, and by 2011 the target is to achieve a turnover of Rs. 1,000 crores. Mr. Ajay Gupta speaks about the way he plans to go about the expansion plans and other new products in the pipeline.
Infrastructure
CEBBCO is expanding fast, adding capacity within its existing plants and new plants. CEBBCO currently has two manufacturing facilities in Jabalpur where both tippers and trailers are manufactured. The company is setting up the third facility in Jabalpur which will start commercial production by November 2008 and the fourth facility at Indore for manufacturing tippers. The Indore unit will start commercial production by September 2008. Next year the company plans to expand further by setting two more manufacturing facilities, one in the South and the other in North. The capital outlay on expansion for the current year is Rs. 41 crores and for the next year Rs. 30 to 40 crores.
CEBBCO’s existing plants are state-of-art, equipped with automated shot blasting, spray phospating 9 tank pre-treatments, baking oven, paint booth, etc. Its design centre is equipped with the latest CAD/CAM software and has in-house capabilities for development of new products. At present the Design Team is working on various solutions in association with the Ordnance Factory, Tata Motors Ltd. and private fleet operators.
CEBBCO has received the coveted ISO / TS 16949:2002 certificate. “This is the first step towards implementation of TQM, and this certification reflects our commitment towards quality”, says Mr. Ajay Gupta.
CEBBCO is also planning expansion overseas by setting up a manufacturing facility outside India. It is already in the final stages of discussion with possible joint venture partners, and the overseas unit will be finalised by 2009. The company plans to export tipper bodies in SKD form and assemble it at the overseas location.
CEBBCO is also implementing ERP, 5S and lean manufacturing. CEBBCO’s management system is certified to ISO:9001-2000 for its designing and manufacturing capabilities. It is a professionally managed organisation which has an energetic team of highly experienced and dynamic young engineers. In fact, the company enjoys the lowest DMR rating (demerit rating) from Tata Motors and the Vehicle Factory.
CEBBCO currently manufactures tippers and trailers. Trailers are manufactured in technical collaboration with CTV Doll of Thailand. The company has already announced plans to enter manufacturing of refrigerated trucks, dry bulkers and petroleum tankers and is in the process of tying up with global majors for these products. “We want to align ourselves with leading global manufacturers and offer the best transportation solutions to our customers in India”, says Mr. Ajay Gupta.
Tippers
Despite downturn in the CV industry the tipper segment continues to grow. The tipper market in India is estimated to account for 40,000 to 50,000 units annually and is growing at about 18-20 per cent. The estimate is the tipper segment will reach a marketsize of 100,000 units in the next two-three years.
This clearly offers tremendous opportunities for established tipper manufacturers. CEBBCO, which has an established capacity to manufacture 2,000 tippers per month, is currently hitting volumes of around 1,000 tippers every month.
CEBBCO is the first Indian tipper manufacturer to install robot welding machines for tipper fabrication. The adding of the automated facility adds another 1,000 tipper units capacity. The robot welding facility will differentiate the quality and performance of the products offered by CEBBCO vis-a-vis other tippers that are available in the market.
“We wanted to be the best tipper, manufacturer in the country, and we will continue to invest on global technologies to ensure that we are a step above competition. In fact, as a next step, we have also invested in trailer robots which would be ready by next year”, adds Mr. Ajay Gupta. In 2007-08 the company sold close to 11,000 tippers and for the current year the target is 18,000 tippers.
Stainless tippers
CEBBCO has recently introduced stainless steel tippers. It has received an order for 25 units, out of which the first five units will be delivered shortly. The biggest benefit of the stainless steel tipper is that it doesn’t get rusted. There is a slight increase in the total cost, but the weight of the body is almost 600 kg less compared to the conventional mild steel tipper. This means it will offer additional payload, and the additional cost can be recovered within a very short time.
Stainless steel tippers are most suited for coastal areas where you need to transport salt, as rusting is very high in mild steel tippers. Usually these tipper bodies are replaced every 6 to 8 months. “We see a huge demand for stainless steel tippers in the future due to the lighter weight and higher payload capacity of these stainless steel tippers. The residual value of the tipper is much higher than other tippers”, says Mr. Ajay Gupta.
Trailers
After tippers, trailers will be a major area of focus. In 2007 CEBBCO entered into a technical tie up with CTV Doll of Thailand for manufacturing tippers. CEBBCO is currently manufacturing 100 trailers every month and the number would be scaled up to 500 per month by 2009. Currently catering only to private customers, the company hopes to start OEM supplies in the next thre
e months, according to Mr. Ajay Gupta.
The domestic market for trailers is expected to grow from 25,000 units to 100,000 units in the next four years. This is largely due to the change in product and service offering by commercial vehicle manufacturers. Major players such as Tata Motors, Ashok Leyland, Eicher Motors and AMW are looking at offering fully-built commercial vehicles in the next five years. CEBBCO had initially targeted 400 trailers for the full year, but the demand is robust and the company is already averaging 100 trailers every month.
Refrigerated trucks
The loss on perishable commodities of non-availability due to poor proper infrastructure is estimated @ $12 billion annually. Food wastage in India every year is equal to what a country like Australia would consume the whole year. Realising the seriousness of the situation, the Government has announced sops in the Budget with reduced excise duties on refer vans and cold storage.
The retail sector in India is agog with expanded activity with the entry of both Indian and overseas retail giants making their entry in the field. However, MNCs like Tesco, Walmart and Carrefour do not allow transportation the way it is done in India. They insist on transportation of perishables only by refrigerated vans, and the refer truck market is expected to be more than 12,000 units per annum in the next five year. The Rs. 800-crore industry is likely to expand to Rs. 4,000-5,000 crores on the back of the retail boom.
CEBBCO has also announced plans to enter the refer truck market. The company is setting up a plant which will be ready by January next and will have a capacity to manufacture 1,200 boxes a year at an investment of Rs. 15 crores.
The company plans to introduce refrigerated panel vans based on sandwiched panel technology. Currently most refer trucks work on insulated PUF panel vans that do not allow for proper cooling of products inside the van, as a result of which most of the farm products get spoilt.
The new sandwich panels will be made from layers of gel coat, resin and fibreglass. The heat transfer value will be almost three times lower than that of the insulated vans currently made in the country. It will also ensure lower diesel consumption by the cooling unit to maintain the same temperature inside the van.
Other products
CEBBCO has been allying itself with global leaders in introducing transportation solutions in the Indian market. The company is the final stages of signing a technical tie-up with a global player for manufacturing petroleum tankers and bulkers. It hopes to introduce aluminium petroleum tankers and cement bulkers in the first quarter of 2009. The first prototypes will be ready by November and after extensive field trails and testing the product will be launched commercially.
CEBBCO is also planning to focus on garbage applications. On the component business, it has announced plans to start manufacturing its own range of axles and suspensions for trailers, for which preparatory work is in progress.
With all these expansion and new products in place, how is the Indian market geared up and how does CEBBCO plan to use the opportunity? Mr. Ajay Gupta says: “Typically in a developing country, the infrastructure development phase happens over a period of 20 years. In India I feel it started in 1999 with the Golden Quadrilateral project, and going by the global phenomenon, I see another 10 to 15 years of growth opportunity in infrastructure development.
“Typically, In China, the growth in the truck market due to infrastructure development has been nearly 10 times. CIMC, a major trailer manufacturer in China does close 100,000 bodies a year predominantly trailers. This shows the future opportunity available in India. Also in India, just like bus code, a new code for tipper and trailer manufacturing has been recommended by ARAI and this will be implemented in the next few years. This will result in the tipper and trailer segment getting more organised and will provide more opportunity for organised manufacturers. We strongly believe in upgrading ourselves to ensure that we are one up compared to competition in terms of quality, deliveries and performance”, adds Mr. Ajay Gupta.
