Kobelco Construction Equipment India Private Limited (KCEI), a subsidiary of Kobelco Construction Machinery (KCM), Japan, was established in the year 2007 in India. Headquartered in Noida, KCEI set up a nationwide network of authorised dealers. Now, the company is fully equipped to meet customer expectations in terms of service and parts, through an efficient logistics system, covering over 100 outlets in India and Nepal.

Vikram Sharma, MD and CEO, Kobelco Construction Equipment India Pvt. Ltd, is of the opinion that every manufacturer entering a new market has to go through a learning curve as he shares this and much more with EPC&I.

As an established leading player in the Construction Equipment market in the country, what is your opinion on Infrastructure development activity in the country?
The government initiatives of the past two years have started showing results in recent months. There is a positive sentiment in most areas. We have seen our sales growing substantially compared to the corresponding months of 2015. With availability of funding and faster execution of projects, the demand for Construction Equipment (CE) is likely to remain healthy.

While some research analysts and economists claim that it is skewed more towards road building activity, development of power plants, ports, airports, etc continue to lag behind. Do you subscribe to this view?
Probably, roads attract lot more attention and directly impacts a larger group, thereby creating such an impression. More information about roads is also shared in the public domain. The other projects have longer execution periods, and require larger funding over a longer period of time.

What would you say are the main growth drivers in a highly competitive market?
Most infrastructure projects involve substantial earthwork, at least initially, and also create a demand for aggregates. Hence, the direct impact on the demand for earthmoving equipment. For non-road projects, more specialised equipment are required.

How have the policies and initiatives taken by the government to develop the country’s infrastructure reflected on your company’s growth?
As already stated, we have seen our equipment sales grow substantially when compared to the corresponding months of last year. After a long time, we have to make our valued customers wait for deliveries. We have already taken steps to enhance our production capacity and hope to improve deliveries soon.

What are the company’s expansion strategy and potential segments in Indian construction equipment business?
Kobelco has been recording steady growth in numbers even when the market was facing a downturn. We had always focussed on strengthening the support network across the country and this has helped us retain our customers even in difficult times. Our machines are the preferred choice in most common applications for their high Value-for-Money proposition. Quality improvements are an ongoing exercise at Kobelco. We have recently launched our 35+ Ton Excavator, the SK380HDLC Heavy Tracks with the best-in-class Undercarriage. It will have a clear edge over competition.

In the face of aggressive competition putting strong price pressure, coupled with the liquidity in the market which will impact cash flow and profitability, what are the transformations that leading companies such as yours need to bring about to ensure that you not just grow at a predetermined rate but grow substantially?
Price has been a dominant factor in the CE industry for long. However, there is undoubtedly a shift, though gradual, in the evaluation criteria of buyers. They have started appreciating the advantages and benefits of factors like fuel efficiency, higher output, trouble-free operation with high machine uptime, quality of site support, etc.  The share of brands offer greater value is bound to improve in future.

Many manufacturers in the country are making innovative strides to modify their existing lines to enable them to deliver higher production outputs, improving the productivity and, simultaneously, offering a good RoI. What are your plans on this front?
We have always been delivering the best RoI as we did not compromise on the quality of our components. Our own R&D Centre in Japan has several innovations to its credit and help us maintain a leadership position. We have been increasing our customer base year-on-year.

Based on requirements of Indian OEMs’ array of individual products and standards, how are the equipments featured and designed to have complete equipment integration?
Our various models are clearly designed for performing the common tasks in the respective segments. We do offer a range of options to allow the customer to select the right combination for optimal performance and output. This is based on a close study of each application and the demands of the site conditions.

How do you ensure installation flexibility?
Our machines are delivered to our customers in a ready-to-operate condition. We provide specific training to the customer staff in operation, maintenance and safety so that they can derive maximum benefit.

How is the technology placed to suit Indian requirements taking into consideration that the equipment works for extended duty cycles and adverse conditions within the country?
Every manufacturer entering a new market has to go through a learning curve. Kobelco has been able to fine-tune their equipment to meet the customer expectations. In fact, the HD (Heavy duty) series was developed with the Indian market in view. This has helped us cater to some similar markets demanding tough machines like in South-east and West Asia. We are regularly exporting Excavators made in India to these markets over the past several years.

OEM support and cooperation for future product upgradation is important. How are aspects like prototype performance assessment in varied working conditions being addressed based on the emerging requirements of the Indian customers?
Our field teams are like our eyes and ears and actively share valuable feedback with our factory as well as the engineering teams. Product development is a continuous activity in Kobelco, and this helps us stay ahead.

How are you addressing issues regarding affordability, business expansion and retention?
Japanese companies follow strict fiscal discipline while maintaining the quality of deliverables. We plan for the short as well as the medium terms with multiple scenarios and continuously monitor and update.

What would you say are the primary challenges going ahead?
We expect to face serious challenges from used as well as cheap equipments from other countries unless the government takes suitable steps to restrict them. Lack of regulation with respect to emission and safety is another serious concern.

What is your forecast of CE demand in the days ahead?
There are many types of growth projections doing the rounds. However, a 15 to 20 percent growth is highly probable across the industry with higher growth in some segments like Earthmoving equipment.

Lastly, any new products and services expected to be launched at bc India 2016?
Well, we have a limited presence as we are currently in the process of merger of our Crane Company into our organisation by the end of the current financial year. We are displaying our Okada range of Rock Breakers which have been re-launched with substantial improvement in durability and productivity. Also, we will highlight our new version of the SK380HDLC as stated above.

“We expect to face serious challenges from used as well as cheap equipments from other countries unless the government takes suitable steps to restrict them.”