The construction equipment industry has a crucial role in infrastructure development. It provides the foundation of growth for various sectors and, hence, is a reflection of the economy itself. JCB India Ltd., a wholly- owned subsidiary of J C Bamford Excavators Ltd of U.K., is the market leader for backhoe loaders in India. In this interview with The Hindu at its plant in Ballabgarh, Haryana, the company’s Managing Director and CEO, Vipin Sondhi, spoke on a range of issues affecting the economy and the construction industry. Excerpts:
How was last financial year for JCB? What’s your outlook for the industry in the current fiscal?
The year 2011-12 was a growth year. The best case scenario that the construction equipment industry can look at this year would be flat or minor de-growth.
The industry will be flat, though we would like to gain market share. We sold 27,000 units last year.
It would be best case scenario this year.
What are the reasons… global uncertainties?
No, absolutely no uncertainty. Projects on the ground need to move. There is nothing external. It has got nothing to do with Greece. Greece gets a lot of blame for what's happening in India. The fundamental is that we got to focus on their execution.
At the end of the day, we are what the progress being made by the projects. Even after being approved by Central government and achieving financial closure, many projects, be it road or port ones, have not progressed. Whether it is land acquisition or environment, the execution needs to be moved. As CII and industry, we want the government to take top 50 projects of national importance and execute them. Please don’t announce any more projects. The need is to take up the ones that are on the ground and which are stuck for inter-ministerial co-ordination issues, environmental clearances, may be land acquisition at the State-level… whatever it is …get these going.
Can you list some of the projects?
Let’s look at the roads. We know that the roads’ programme has not moved at the way we thought it would. The vision articulated in 2009 when this government took over was that it should be 20 km a day. We are far away from there.
So, it is important to have execution. The momentum and positivity will build up, and things will then start rolling.
How do you expect XII Plan to be?
It started off with average growth rate of 9 per cent. The Planning Commission is already saying that this may be too high to achieve. We should set a realistic goal and then execute. I will not talk of policy and planning and all that. We operate on the ground, and only want to see execution.
With regard to JCB, what are the plans ahead?
One of our big strengths is our distribution network, and we continue to expand it. We have over 430 outlets. Five years ago, we had less than half that number.
The objective is to go deeper and deeper into India, which means going as close to our customers as possible.
Obviously, our customer base is expanding, and it is going to all parts of the country.
Our machines are used in far away remote areas. So, you got to be as close as possible. We have around 6,000 people who are employees of our dealers, but who are trained by us for selling and servicing these machines.
In India, JCB has three world class plants. This [Ballabgarh] is the largest plant for making backhoes anywhere in the world across all companies. We have two world-class plants in Pune, and all plants produce a product to one global quality. Recently, we launched what we call the all-new 3DX backhoe loader.
It is a state-of-the-art one and gives fuel efficiency which will save our customers over 2 lakhs [rupees] a year. It gives a cabin which is over 20 per cent bigger than any other cabin, including our previous cabin, which means that the operator can sit in comfort. Besides expanding our distribution network, we would continue to introduce newer products.
What about exports?
My emphasis is to ensure that we retain our leadership position in the domestic market but, as I said, we have enhanced our capability for a single global quality and, therefore, we are exporting to Indonesia, we are exporting to some other parts of the world, but that is not the dominant theme. We are extremely focussed on the bread and butter, which is the domestic market.
There were talks of your expansion …
What we do is to ensure that we keep pace with the market, and we have capacity today over here [Ballabgarh] and in Pune. When the market recovers, we will start looking at expansion.
Isn’t there a much bigger role for JCB in national highways?
No, JCB, in particular, will have much greater role to play in State Highways and rural roads. That’s our strength.
For rural roads, manual work as well as simple digging and excavating this backhoe is ideally suited; it is a very versatile machine, and it is on wheels, so it is ideally suited for semi-urban, rural roads. And that’s why for us customers are individuals or people who are families who buy JCBs, they don’t necessarily participate in national highways and that’s our strength, the strength to participate in what is happening in the local village community.
The correspondent was in Ballabgarh at the invitation of JCB.