Laying the foundation stone for a new production plant that will complement the existing ones at Ranjangaon in Pune was a statement to that effect, reports Rajesh Rajgor
Carraro India celebrated its 20th anniversary recently. The two-day celebrations for the group’s first greenfield facility outside Italy also included laying the foundation stone for a new production facility that will complement the existing ones at Ranjangaon in Pune. The new manufacturing plant will help the company’s Indian operations to significantly enhance its total capacity.
Commenting on this step forward, Enrico Carraro, Chairman, Carraro Group, said: “Today we celebrate 20 years since the start of production at this industrial complex, which counts over 1,400 employees. A truly remarkable number, if we think that the sum of the Carraro Group’s people working in all Italian plants is exactly the same.”
“This means a very clear thing: India is, and will remain, an essential point of reference for the future of the entire group. Already today, with a share of over 17%, India is the group’s first destination market. Here, thanks to our ability to work at excellent levels, the Carraro brand is recognised and respected by all the major players in our reference sectors. Carraro means quality, technology, reliability,” he added. Within the new production area, which will occupy 5,000 square metres and which is expected to be fully operational in 2021, a line of advanced conception will be installed, primarily dedicated to portal axles for compact tractors with engines up to 75 HP.
It’s a product that is already gathering appreciation from all the main Indian agricultural machinery manufacturers. “The expansion of this production site, which starts on the occasion of today’s celebrations with the laying of the foundation stone, will allow us to expand our capabilities towards new product ranges, such as portal axles, specifically designed for the Indian market,” Carraro stated. “This is a fundamental element for the future growth of our activities in the service of both local and export markets,” he added. In parallel, this expansion will allow further optimisation of internal logistics thanks to new areas to be dedicated to modern structured warehouses, thus leading to an improvement in customer service and contributing to a more timely management of stock levels.
“This will only be a piece of a process of further expansion of production areas that will enrich today’s portfolio with new products resulting in a 50% increase in local activities in three years,” Carraro said. In the last 20 years, Carraro Group has invested more than Euro 101 million in the India plants. “Until 2023, we expect to invest around Euro 20 million for operations upgrade and plants expansion,” he revealed.
On the sidelines of the event, we spoke to Alberto Negri, CEO, Carraro Group, about expectations from the new plant, the market in India and medium to long-term plans.
Excerpts:
How do you anticipate the demands from the Indian market and what are some of the trends that you see unique to India?
Every developing country has its own demands and challenges. What we have learnt in India is that, despite the horse power increase, the four-wheel drive agricultural tractor has many more advantages and demand than the two-wheel drive. It is almost like saying that a 50-75 HP 4 x 4 tractor is better than a 120 HP vehicle. So, we expect the Indian market to move towards 4 x 4 tractors. As such, our focus is on the agricultural segment requiring transmissions and axles for vehicles below 120 HP. Also, portal axle is a new technology for us and it has been very well-accepted in the market. We have a lot of requests from customers saying that they want to develop and use this technology. It will be suitable for paddy fields and rice cultivation, especially in South India, and our customers will be very successful if they use our products.
Who are your customers? Also, could you elaborate on how you meet their requirements?
We serve almost 100% of the customers here mainly for their export businesses both in transmission and axles. We are also entering the domestic market with the porter axle and four-wheel drive axles. I don’t want to name the customers for fear of forgetting to mention some of them but suffice it to say that we work with everybody in the industry. Up to one-third of our production in India is directly for exports and two-third for domestic customers.
Given the present slowdown, how do you read the market conditions in India? Is this downturn the right time for investments?
It is true that the global economic scenario is posing some concern. However, we at Carraro Group believe that this phase of a slowdown is the right time to get prepared for what will come and thus it is in such moments that the foundation of future has to be laid. We have to be prepared when there is an opportunity and hence we are getting ready for that next phase of growth.
What is Carraro India’s medium to long-term goal and expectation from the new expansion?
In terms of capacity we have a number that is 50% more than what we achieve today. In the medium term we see the market trends supporting our investments. We are very close to production of 100,000 axles and in the new line we aim to reach 150,000 axles within two years. The targets vary depending on the segment. In terms of gears, agricultural transmission and construction equipment, we should an increase in production capacity by 40,000. India is on our radar because of the backhoe loader and tractor markets and surely these are poised for growth. It cannot remain subdued for long. In the long term, as our production capacity increases and new products are launched, we look forward to a promising phase of growth.