18 October 2019

Table of Contents for Post Excon 2017





Interaction- V G Sakthi Kumar, Managing Director, Schwing Stetter Sales & Services Pvt Ltd and Anand Sundaresan, Vice Chairman & MD, Schwing Stetter India Pvt Ltd

We are a ‘customer centric’ company

 

Undoubtedly, as the Smartest batching plant maker globally, Schwing Stetter has ramped up its product lines across verticals and has clocked maximum product launches at EXCON 2017 and that too smart ones at that!
In an exclusive interview to CONSTRUCTION OPPORTUNITIES, V G SAKTHI KUMAR, MANAGING DIRECTOR, SCHWING STETTER SALES & SERVICES PVT LTD and ANAND SUNDARESAN, VICE CHAIRMAN & MD, SCHWING STETTER INDIA PVT LTD explain how their product lines are in sync with market demands.

 

Schwing Stetter, this time, has launched probably the maximum number of products by any single Exhibitor Enterprise in EXCON 2017. Tell us about Smart features of your products.

VGS: I only want to recall some editions back in 2013, when market was going through a tough phase of slowdown, we still launched 21 products and thecustomers asked, “How come when the market is going down you are launching.” For us, launching of a product has nothing to do with market going up or coming down. To put it simply, we have been looking for opportunities to give products to customers, which can increase their efficiency and improve their profitability. During a slowdown phase,customers have a mentality to hold down their spending to minimise capital investment. Then we can’t talk about extra features, luxuries on the products.

When the market is booming they will look into various other aspects of businesswhen speed and scalability become priorityrequirements. If you talk about the same products what we were sellingin 2010, he/shewill say “No! I need something which can take an even bigger job”. So the scenario completely changes. As a proactive andresponsive organisation, we always get a premonition of what is coming and responding in terms of timely display and launch.Whether good time or bad time, for us, the launching process continues. Because we always work on new product requirements in the market, once the product is ready, tested and about to be launched, it comes to EXCON for display.

Had we not launched any new product after 2008, with the Pre-2008 product range, we would have ended up with a mere Rs. 300 crore turnover in 2017. The range of products that we launched post — 2008 are today giving the balance `1,200 crore turnover.

So the quick response to market ambitions, is giving success back. We are a ‘change ready’ company and the process of responding to market is continuing seamlessly. So even for next year and year after next, what will be required in the market, will be ready in our product stable.

 

Your outlook for the lucrative RMC segment, which is opening up now. Your batching plants are Best-in-Class, that’s the feedback I got from the market.

VGS: RMC business, which is mainly dealt with by unorganised sector, is currently dull. Three things have affected them;

  • First is demonetisation, which restricted circulation of hard currency (the main medium of exchange in unorganised sector).
  • Second problem for real estate was RERA, the new legislation that came into force in the month of May 2017 which has prescribed many stringent regulations and approvals to be in place before launching any real estate project. This madea lot of people, who are in the launch process, more careful and well prepared before doing their launch. So there is a temporary reduction in new launches for the real estate.
  • Third issue is GST, which had more to do with the understanding of GST than its actual impact. Many of the HSN Codes are not explained properly and a simple statement from GST Officials saying the rates will be revisedor rationalised put a break on transactions awaiting clarifications / downward revision.

So these issues are affecting the real estate business. But in the long run demand is expected to bounce back.

 

Is this a ‘Buyers’ Market?’

AS: It has always been a Buyers’ Market. At least in the post-liberalisation era,it has always been like that since India is a very price sensitive market. I remember times when we used to submit tenders, which took a longer time to finalise. That time whatever machinery we used to import, we used to take quotation from overseas suppliersand then every time the tender gets extended we used to ask for a matching extension. For us, we were agents of many European companies including Schwing Stetter. After one and a half yearsof floating the tender the order used to get concluded by which time the validity of the quotations from overseas suppliers would have expired. Literally the awardees against the tender used to beg the overseas supplier for a price cut. But later on, after liberalisation, customers became more educated, it was possible for them to travel abroad for different exhibitions, get to know different equipment available in the market. Now awareness about products and technology is high and construction sector level of technology absorption is very high. Big contractors who are involved in mega projects are all looking for state of the art technology, high performance and high productivity products. They are already migrating to that and in fact customers are more aware than the sellers about latest technology and price trend due to their frequent visits abroad and to overseas exhibitions further supplemented by many overseas manufacturers starting a local unit through foreign collaboration or JV to bring down the cost. This enforced transparency in the market.Adding to the misery was the down slide in the market internationally. Countries like Indonesia stopped buying. Developing economies are only India and China and all manufacturers are looking at India for business. So the customer today has huge options available. Obviously the Buyer has become the King. So if you want to sell your product, you have to satisfy all his requirements that encompasses, pricing and efficient after market service too.

So the ‘BUYER IS A KING.’

 

Your comments on Affordable Housing as a demand driver for your products.

AS: The Affordable Housing concept is to have high density habitation, sharing of common costs and give what is minimum required for the LIG families. Construction cost is not very different across the country but land rates and labour costs are highly dispersed but now they are stabilised.

Affordable housing today is meant for people who are at the lowincome levels. People who are going for bank loans have regular employment which makes the lending banks readily agree for extending the loan.On the Government side, they want to give housing to everybody by 2022.Government of Karnataka has recently announced one lakh apartments in Bengaluru for the urban poorand other Government are following suit.

So for affordable housing we have to make concrete at a very competitive price. If a contractor buys the concrete, he/she is likely to shell out `400 to `500 per cu m more because there is another partner in the value chain. The best solution is for the contractor to make his own concrete.Such contractors will go for basic level of machines whose output meets exactly the production requirement of the day and they can save money.

 

Give us a specific example of how you are helping contractors by making this equipment.

VGS: Our new product launch and your question are related. Firstly, we have a wide range of equipment which gives many options to the contractors who are our customers to choose them according to the scale of their requirement. The availability of multiple choice will enable them to optimise their investments and to make the ultimate product (low cost housing) affordable. Secondly the range of equipment are manufactured with the objective of getting the operating cost at low level, viz., on a lower fuel consumption, wear parts which gives better life, etc., thus help the contractor to get his concreting cost lower. The affordable housing is going to be funded by the Government and there will be a strict auditing mechanism to ensure that the people who buy these flats get a good quality housing at affordable price. Our plant, the way it is built with modern computer control systems, keeps a record of what is produced and the data is stored in its memory. The plant cannot be manipulated and so it ensures quality by default, thus making sure that the contractor as well as the buyer is benefited.




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