Escorts Construction Equipment manufactures and markets a diverse range of construction and material handling equipment like cranes, loaders, vibratory rollers and forklifts. The company was a pioneer in introducing the concept of Pick ‘n’ Carry hydraulic mobile cranes. Mr. Rajinder Raina, General Manager (Marketing), tells us about his market perceptions.
Can you brief us the major/popular equipment and models thereof in your product program that contribute significantly to the top & bottom lines? What are the USPs and your plans to increase the market share in a competitive market?
Escorts Construction Equipment offers products under three application categories.
1) Material handling, 2) Earthmoving, 3) Compaction.
While most of the products are manufactured in our plant at Ballabgarh, there are products like Forklift Trucks which are sold through trading route.
Pick & Carry cranes are the biggest contributor to our top line followed by Backhoe Loaders & Vibratory Compactors.
In Pick & Carry cranes Escorts offers Cranes ranging from 10 Ton capacity to 23 Tons with different load profiles, options & attachments.
The offering on Backhoe Loaders comprises: a) Jungli b) Digmax II. With various options & attachments. These are designed for different application segments. Loadmax is a loader offered in this category.
Escorts offers the widest range of Vibratory Compactors wherein 10 Ton, 12.5 Ton Soil, 10 Ton Tandem Vibratory & 3 Ton Mini Tandem Vibratory compactors are manufactured in-house.
Indicate the focus segments & the models supplied for the applications. What are the typical attachments sought and the service support provided to keep the downtime of the production machines to the minimum?
In the Pick & Carry segment our focus is on > 12 Ton category TRX Series crane as Productivity, Cost of operations & Safety are driving the demand. ECEL pioneered this concept & is the leader today. Customised & optionals’ fitted cranes are supplied for specific applications.
Safe Load Indicators & equipment Monitoring system have found good acceptance amongst the users. On the service front our dealership network is the most robust with outlets strategically located near the application areas for quick response.
Backhoe and excavators corner maximum market share in local market – what are the factors influencing such a trend? Also backhoe loaders sell more than excavators while excavators dominate in the industrialised countries – can you comment on it?
Globally tracked excavators are used for excavation & loading of material onto the haulage equipment like Dumpers & Tippers. For city / on road works, Tyred excavators are used. India has always been a ‘low cost solution’ market. Tractor Backhoe Loaders address this requirement of the market coupled with tractor trolleys as the haulage equipment. This the reason why Tyre mounted excavators don’t sell in India. Late 80s & early 90s saw these excavators introduced in the market but these did not find buyers.
Going forward, the excavator market will grow faster than Backhoe Loaders but the absolute volumes shall continue to be much higher for BHLs.
TCO becomes critical for the production machines & in this regard, how do you find your machines meeting this requirement? What package do you offer to the small contractors who have a constraint on the initial investments?
Calculating the TCO for production machines is the most basic kind of cost assessment. The fact that Escorts equipment has been around for more than 35 yrs bears testimony to the fact that TCO drives our technology / product design. The demand for the pre used Escorts cranes is the other proof. There are > 20-yrs-old Escorts cranes & compactors which are still in use gives escorts brand the equity.
Our products are preferred by the financiers & they fund 85 to 90% of the asset value depending upon the financial credibility of the customer. Escorts offers support to these financiers by way of ensuring high uptime of the equipment & complete co-operation in case of default by the customer.
Rental and used equipment market share in the segment is very low; how do you see this evolving over a period of time? Comment on the supply of refurbished equipment, buy back scheme and financing options to customers.
The trend is fast shifting from owning to hiring of equipment. It is a process of market evolution. Till the other day, rentals was more of a retail & low end activity. As the market started maturing, rentals started moving into an organised domain with big players getting into it. Metro rail is the case in point where bulk of the equipment is deployed by rental companies.
Structured rentals will gain traction in the next few years & buy backs & refurbishing, etc., is not far away.
Man-machine combination is considered critical in achieving overall productivity. In this regard comment on the importance of driver skillsets, training, availability, operating cabin ergonomics/comfort, etc., to meet the above objective.
Fully agree with you that man-machine integration is the most important aspect of products & technologies. Machines don’t deliver efficiency & high productivity unless there is a competent operator behind the wheel. This area has suffered a huge neglect in the past but future will be bleak unless operators acquire the requisite skill sets. We at Escorts led the industry in this endeavour with an in house dedicated facility at Bangalore. This is further extended to training at site of work. Training is a part of CSR at Escorts today. So much for the importance of training.
How do you see the market evolve over the next 4 years (in terms nos.); comment on your export initiatives and plans for vision 2020? Tell us also about the impact of GST, pollution control norms and demonetisation on the CE markets?
Demonetisation had a miniscule effect on our industry sans retail rentals. On the positive side it will help the small time buyers to consolidate their financials & the book building will help the get equipment finance quick & easy. Pollution control norms are being driven by ICEMA in collaboration with Ministry of Heavy Industries. Engine manufacturers need to look sharp.
GST will change the face of our industry in more than one ways. Direct & indirect cost, ease of doing business (commercials) & logistics will be really ‘SARAL’.
The current traction is likely to continue till 2020 & exports will add to the volumes & help reduce the vagaries of demand. Things look pretty good today.