The bumpy ride in the load body of the truck did not bother much the lad in early teens; after all he had a clear mission and managed to hitchhike from his native village near Madurai, T.N. to Chennai. After doing sundry jobs and working in varied capacities in a transport company, the youngster sensing the enormous business opportunities opening up in the transport sector, started a firm in a small way during 1968 and named it, ‘Ammayapper Roadways’ – in reverence of the name that made a deep impression in him, albeit with a minor change. It has been a steady growth for the company since the start as a transport brokerage firm to evolving as an acclaimed transport company operating in specialised segments; with deft business moves on various fronts and well over four decades down the timeline, the group has grown to what it is today, covering complete south India. The lad who had embarked the truck ride in the early 1960s was none other than Mr. V. Haridoss, the founder of Ammayapper Group companies and the main force behind organisation – steering the group transport company to becoming one of the admired in its operations realm.
Initial years
Ammayapper operations are currently handled by Mr. H. Senthilvelu, younger of the two sons of Mr. Haridoss; having graduated in the commerce stream, he went to the UK to do his M.B.A. and returned back to assist his father in 2007. Recalling the initial years Mr. Senthilvelu says: “My father started the transport operations from the Chennai port; procured an agriculture tractor trailer for transporting the goods to and fro the port, essentially for short hauls – CV tractor trailer was expensive and not easily available those days. In the next stage he entered the steel transport segment thro’ the popular 16 ton truck – way back in 1977. He realised very early that to make a mark in the transport segment, one should concentrate on specialised segments and this led to the entry into the tractor trailer transport of containers, bulk and unit loads both ways in the port to meet the regular and project requirements. Yes, the focus was mainly on the container transport with the port as the denominator and the fleet strength grew in proportion to meet the increasing customer base and their requirements for imports and exports. With the addition of diverse models in the range and the ready availability of vehicles, Ammayapper became a preferred firm for container transport; and with the boom in container traffic facilitated thro’ Govt. policies and opening up the economy in the early 1990s, the company was growing rapidly, expanding its fleet strength to meet the customer demands from steel, cement bags, tobacco, chillies, seafood products, etc.; and most of it was thro’ tractor trailer”. There was a temporary business dip for the company during the mid 90s due to economy hiccup coinciding with the C&F companies also entering the transportation business; but the demands were again soaring to accommodate everyone and we never had to sit down and review our strategy till early 2000s, he adds.
“My elder brother, Mr. H. Karthikeyan an engineer by grooming and returning back after his M.S. from Australia, took charge of the transport operations from 2002 – of course with my father extending his invaluable support staying in the background. Mr. Karthikeyan was instrumental in taking the fleet strength from 100 vehicles in 2002 to 240 vehicles by 2007. As the container transport business was becoming difficult with the increasing competition and margins getting eroded, to sustain the growth, bulker (bulk cement/fly ash/slag tanker) vehicles were introduced by my brother – after conducting extensive market surveys and understanding the growing needs of the customers. The move fetched rich dividends and Ammayapper soon made a mark as the leading player in the domain. When I took over from my brother in 2007, I was totally new to the business segment. My brother was my business mentor and I imbibed the fundamentals from him to run the firm. However he had to take care of the textile company as the same was in a critical stage and needed his full time attention. Hence I had to take over the transport operations, lead from the front with my father supporting me by playing a secondary role”, briefs Mr. Senthilvelu.
It took sometime for Mr. Senthilvelu to come to grips with market nuances and requirements of the customers in the competitive and demanding segments. With his native business acumen, brother’s encouragement to ‘think big’ and his father’s guidelines in maintaining ‘operations discipline and service quality’, the top and bottom lines grew at impressive rates. Starting from 240 vehicles in 2007, the company grew fast and today has a fleet strength of about 600 vehicles, comprising all popular CV makes/models, viz., 100 container vehicles, 440 bulkers & about 60 buses, LCVs and SUVs put-together for other applications; and inching towards the goal post of 1,000 vehicles, in the near future.
Bulker focus
In spite of having started with container transport and progressively expanding the fleet strength to do good business in the segment, Ammayapper is known in the transport domain as a bulker specialist; and Mr. Senthilvelu indicates this has come about with the early entry in the domain and professional approach in addressing the customer needs. The focus on bulker segment is reflected in the fleet strength and the company has bulkers starting from 11 to 49 ton GVW in both rigid and tractor trailer carrier versions. The company can provide bulker fitted with blower (compressor) or utilise the one available at delivery location; in tank capacities from 22 to 76 cu.mtr. depending upon the payload needs; and for delivery even in a narrow street location in cities/towns to project sites as far as 500 km one way – to simply put it, if there is a silo requiring cement, irrespective of location and payload quantity needed, the company can send a bulker to meet the needs at competitive rates. Mr. Senthilvelu explains: “Once we understood the emerging market and the expectations, we went all out to tap it. Today we cater to cement, fly ash and slag (GGBFS-ground granulated blast furnace slag) segments and have dedicated bulkers for the aforesaid payloads – we do not utilise interchangeably the bulkers, viz., cement bulker is never used for slag payload; and this has been received well by the discerning customers. In the cement segment we cater to almost all the companies; supply to leading construction and infrastructure companies; and thermal power plants, ports, RMC units, contractors in the buildings and allied domain – our customer list is fairly long”.
To sustain the business and address the growth, Ammayapper expanded their operations into C&F agency in bulk cement, cement trading, special cement manufacturing; and to support the fleet opened up petrol pumps, retreading centres, spares sales and fleet service stations all with the aim to expand core transportation business. With the market getting crowded and margins getting squeezed, what are the USPs of the company in scoring over the competition? Mr. Senthilvelu answers: “Fleet strength, diverse bulker models to cater to small and as well big corporate customers, low mobilisation period and decades of experience in the field to ensure prompt service are some of the critical factors that come in our favour. All the vehicles are owned by us and this ensures uninterrupted service; we have a strong and dedicated team of 1,000 employee drivers in our role and supported by again well-knit service facilities. We have our own parking places, service centres, dedicated technicians and inspection teams to monitor and support the smooth movement of fleet. Our bulkers are sourced from reputed manufacturers having international collaboration in the field. The bulkers fitted with GPS for tracking deliver the desired quantity and quality in about 30 min and moves on for the next load. More importantly, the trust has been built over a period of time thro’ good service and this has helped us to retain out customer base and as well take part in their new project/expansion programs”.
Market trends
Commenting about the market trend, he opines that in the cement segment, bulk transport route has definitely taken the major share from the traditional bag cement mode, especially in catering to the concrete domain; however, bag cement transport popular still in plastering and other related areas is here to stay and both modes of transport will co-exist. Commenting on the growth plans and difficulties faced by the transporters Mr. Senthilvelu points out: “Seeing the impressive business opportunities in the bulker segment, many players have entered the field and parallelly the cement manufacturers also expanded their capacities anticipating the steep demand from construction sector. It was alright during the growth phase but during the dips, as being witnessed at this juncture, it puts enormous strain on all the companies involved in the supply chain including the transporters. Having invested heavily on the fleet, cut-throat pricing is rampant for survival and the same in combination with lack of professionalism amongst the transporters is harming their basic interests. In Ammayapper we do not take any contract unless the cost worksheet for the project is positive, viz., it gives meaningful returns and contributes for the business growth. This approach is not followed by many and ultimately they end up executing the contract at a loss”.
The frequent diesel price increase is also posing great problems as the customers invariably do not support the fuel price hikes with proportionate increase in freight rates. This is nothing but slow poison and the above developments have resulted in margins getting gradually eroded to reach the current abysmal level, deplores Mr. Senthilvelu. He summarises: “If even big fleet operators like us are struggling to sustain the profitability, I shudder to think of the small time operators. Everyone knows that CV segment is going thro’ probably its worst patch in the recent times and for a ‘live and let live’ situation, we transporters need to forge a strong co-operation and evolve workable freight rates. Also the resale value of vehicle has dipped due to heavy discounts offered by OEMs to shore up nos. This has affected all the service providers in the chain including finance firms. Amidst all these ground realities if the transporters can tighten the belt, adopt professional approach and sustain the next 2 years period, we can then look forward to reaping the business boom likely to follow in the next 8 to 10 years”.
Ammayapper thro’ their track record have shown that to sustain transport business operations and charter the growth curve, it’s important to expand in synergetic lines and even diversify. Despite such moves, the company’s focus has not shifted from the transportation segment and the management team is continuously on the look-out for new ventures to support the core business. They have been successful in a highly competitive environment, maintain a healthy growth rate and almost treble the sales and service turnover during the last 7 yrs. The innate business skills seamlessly melded with professional approach in addressing the business opportunities should ensure further growth in the segment; and the group essentially focussing in south India and attaining the status of a leading bulk cement transporter could well expand its operations pan India and become a prominent national player – well, with the zeal and commitment, that day may not be far off.