JCB looks for more on-ground action
JCB India, which recently announced an investment of Rs 500 crore in a fourth plant at Jaipur and launched its 50,000th engine from its Ballabhgarh plant earlier this year, is bullish on growth in the quarter starting October 2013.
Amit Gossain, executive vice-president, marketing, business development and corporate affairs, told Autocar Professional that while the company has not seen ‘much de-growth’ in recent months, that fact that none of the expectations from Union Budgets in recent years have fructified on the ground as a result of problems around land acquisitions issues and environmental clearances, has affected the overall environment.
In addition, he says, delays continue to plague on-going road projects thanks to issues that contractors have with build-operate-transfer (BOT) projects but with the cabinet committee on investment looking at the issues carefully, things can improve. In addition, work on road maintenance is ongoing but not picking up speed, he said. Overall, industry growth has been of the order of 10-15 percent.
While JCB does benefit from a falling rupee (it exports parts from its Pune plant to the UK as also Brazil and the US), it does not import much to have an adverse impact on its revenues, adds Gossain. However, the company is keen to look at the potential in countries like Sri Lanka, Bangladesh and Nepal as well as the Delhi-Mumbai freight corridor. The National Highways Authority of India (NHAI) has also recently approved six road projects in Rajasthan as that bodes well for JCB India’s business.
New business opportunities
Meanwhile, new areas of business are emerging and Gossain mentions three areas include irrigation projects, telecom (the laying of networks) and solid waste disposal by municipalities. The last mentioned function has emerged as a business opportunity as a result of it being outsourced by the governments concerned. This is creating opportunities for backhoe excavators. In addition, attachments to JCB products are a key area of JCB’s marketing push given that they are key to applications in agriculture as well as fisheries.
However, the more significant growth areas remain roads and hydel power plants, both key areas of infrastructure that could do with a much-needed boost.
Now while JCB India has seen some de-growth in the last several months, it has grown faster than the overall construction industry growth rate. The company has also benefitted from its exports business that has received an unexpected boost from a weak rupee.
Meanwhile, on the product front, JCB India has launched a new version of the JS205 where it has focused on enhancing the product's fuel efficiency. The company, which since 2011 makes its own engines, says that those who use this product can save an estimated 250,000 litres of diesel in a year, assuming an eight-hour daily cycle. The JS205 testing was benchmarked against rival products.
Explaining how the company works on its products, Gossain says the process starts with asking customers what they need. The trends that are emerging include more comfort, luxury and a feeling of more openness. Working backwards, JCB India has worked on design aspects. As an example, he mentions the backhoe loader that can move 360 degrees and lean to whatever angle the operator desires. In addition, another of JCB India’s customer-centric initiatives is to incorporate a new filtration system that enhances the life of the filter oil and lengthens component life.
On the Human Resources front, the company has set up 11 operator training schools that provide potential operators to customers of JCB’s products. With nine dealer-operated and two company owned, these training schools are not only a way for companies to get trained staff but also a means for self-employment.
These training outlets are located in Jamshedpur, Patna, Jalandhar, Raipur and Silchar among other places. Among the company-operated ones is the facility set up in Chhindwara in collaboration with the Confederation of Indian Industry.
Gossain points out that JCB’s machines are key sources for self-employment. Giving an example, he speaks about army resettlement plans in which defencepersonnel buy JCB machines to operate themselves and as they buy more machines, there arises the need for trained operators. So while this is a means to self-employment on a small scale, the one-month training course emphasises aspects such as safety and machine operations with a focus on fuel economy.
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