Construction equipment companies should focus more on exports
Director’s Take | August 11, 2021
Newspaper reports suggest that many developed markets are opening and that is a good sign, says Mr. V. Senthilkumar, Managing Director in an interview with Jyoti Verma of Crushing and Quarrying World. He also shares the company’s journey in the pandemic era and opportunities it has given.
How has the ongoing pandemic affected the construction equipment manufacturing industry, globally and in India?
We, as global citizens, have to be resilient and fight back the COVID 19 pandemic which has indeed distorted the financial balance of the entire world.
Like every other sector, the construction equipment manufacturing industry is having to deal with pandemic-induced lockdowns, human resources management, raw materials management and many more related issues. The construction equipment industry in India is worth $6.5 billion and the new BS4 emission standards are leading to opportunities abroad which in turn will help the industry wade through these challenging times.
Newspaper reports suggest that a number of developed markets are opening up and that is a good sign. I expect the construction equipment companies to focus more on exports. This trend will also benefit the crushing and screening industry. We, at Propel, are exporting to 14 countries, as of now and we will expand our base to many other countries, as well in the coming years.
How has the Covid-19 pandemic and the following lockdowns affected your operations, products and services in India? What plans do you have for the forthcoming months?
At Propel, we have turned to technological means to stay connected with our customers and support them in their business. We are doing our best to break the virus transmission chain by vaccinating our staff members and following COVID protocols to the T.
With the second wave of Covid-19 subsiding, economic activities are slowly starting up. Daily operations still remain a huge challenge as we have to ensure that SOPs are followed. We have turned to technological means not only to smoothen our operations but also to protect our staff members. We are moving towards making the best use of Internet of things (IoT) and embracing the finer aspects of Industry 4.0.
In the last financial year, we were able to maintain our performance, thanks to my able and hardworking team.
My first priority is the safety of my employees. In case, people fall sick, their work is immediately delegated to others. During the intense lockdown phases, there were few customers who needed our support and expertise and we had to help them out.
Every time, a lockdown is announced, we gave out guidelines to our customers to ensure the machines are properly maintained. Remote monitoring and control is one aspect on which we are working rigorously right now so that distance is never a hindrance.
Globally, what have been company’s advancements in terms of R&D, technology adoption and new products/services/programmes in recent months. When do we expect these new products to come to India? Any product launch expected in coming months?
The R&D department of Propel has been approved by the Department of Scientific and Industrial Research (DSIR), Government of India and recently, we commissioned a dedicated R&D lab attached to it, Our R&D lab has the necessary infrastructure to measure and analyse specific gravity, water absorption, bulk density, bulking, slit, flakiness, elongation, abrasion and impact, among others.
The R&D lab is equipped with an abrasion tester, flakiness tester, elongation tester, compression/crushing tester, impact tester and equipment for sieve analysis. The properties of the rocks and minerals thus tested will act as a guiding tool for customers. Testing will enable the customer to understand the feed gradation for the input material, determine the shape and size of the aggregate, analyse the properties of the sand and check if it is as per the IS:383/IS: 1542 standards and understand strength and durability.
In terms of new products, very recently, we have launched the Prowash V2.0. It comes with enhanced performance and reliability. There are four models in this product: PW 100, PW150, PW 200 and PW 250. We have also introduced the Rinser screen to improve the sand-washing efficiency in our vibrating screen models MVS 1540 2 Deck, MVS 1845 4 Deck, MVS 2060 3 Deck and MVS 2060 4 Deck. We have also introduced a vertical shaft impactor in the models AVVI 55, AVVI 75 and AVVI 100 to handle wet feed materials. This ensures dust suppression at the output, safeguarding against air pollution.
For this financial year, we plan to launch six more products, apart from empowering our earlier products with automation.
4. Tell us about the company’s SOP-COVID-19 measures and ways these have benefited the organisation and its supply chain.
At Propel, we have been strictly adhering to the SOPs given out by the government. Travel has been kept to the minimum. My team has been told to make the best use of technology.
The pandemic has forced us to re-evaluate the supply chain. It is high time we diversify the supply chain risks. The restriction in the movement of people and goods has affected the supply chain which has led to the shortage of raw materials.
In case the raw materials have to be imported, then the supply chain gets affected. Industries cutting across sectors are facing the problems of longer product cycle and increased financial liabilities.
Thankfully, we are an indigenously-grown company and so our supply chain did not feel a huge impact.
5. In India, NHAI is optimistic about awarding 11,000 km in FY21. Will these new upcoming road contracts enable you to meet the FY21 target? Are there other such opportunities or new projects that you are excited about?
The infrastructure industry is booming and this is attracting huge investments. Recently, the government has extended its Rs 111 lakh-crore ($1.5 trillion) National Infrastructure Pipeline to cover more projects by 2025.
I am optimistic that this will aid economic growth in India. The National Infrastructure Pipeline has been expanded to 7400 projects recently, which means there will be more demand for infrastructure sector. We have set ambitious targets for FY21 and I am sure team Propel will achieve it.
6. How many crushing machines have you installed in India and internationally?
We have more than 33 product families with 153+ equipment models. Year on year, we are launching more than 12 products. We have a list of at least 50 trusted financial partners who are playing a major role in our growth story. We have to our credit, more than 1200 plants and installations, and more than 1500 happy customers.
7. Please tell us more about the after-sales service/AMC programmes that you run for your clients
Propel is known for its excellent after-sales service. We have placed our service professionals at key locations across India so that service requests are attended to, at the earliest. Our focus has always been to ensure that the customers’ machines are up and running. Our service team is available round-the-clock and they also support the customers through phone and email.
8. How do you manage spare parts’ availability to customers spread across India?
We have warehouses in Maharashtra, Gujarat, Madhya Pradesh and Karnataka, apart from a house of inventory at our headquarters in Coimbatore, Tamil Nadu. We have an excellent process in place by which spare parts are routed to customers as soon as the order is placed.
9. Do you see an ease of liquidity in construction equipment finance, particularly for retail customer by end FY21?
In August 2020, The Reserve Bank of India announced a host of steps to ease pressure on liquidity and to maintain congenial financial conditions to ensure sustainable recovery of economic growth. In February 2021, the RBI set out various departmental and regulatory policy measures on liquidity management and support to targeted sectors, regulation and supervision, deepening financial markets, upgrading payment and settlement systems and consumer protection. I am hopeful that things will turn for the better.
The products manufactured by Propel Industries are financed up to 95percent on the asset cost by financial institutions (even for first buyers) due to low cost of ownership and early return on investment.
10. How do you foresee private sector participation in highway project implementation, considering the Government of India has allowed InvITS to tap pension and insurance funds?
As per the recent newspaper reports, the Insurance Regulatory and Development Authority (IRDA) is planning to allow insurance companies to invest in the debt securities issued by any pooled investment vehicles, including infrastructure and real estate investment trusts. This could bring more funds to infrastructure through infrastructure investment trusts (InvITs) and real estate investment trusts (REITs). The government is working out ways to bring in money to the sector. Experts have been stressing on the need for private investment into building a robust physical and social infrastructure. The finance ministry’s Economic Survey 2019, also mentioned that private sector participation in the infrastructure space is crucial. So, I see it happening soon than later.
11.Can you highlight Government’s subsidy in construction equipment finance to improve your business?
The government and the people are fighting the pandemic together, but I see that the government is focussed on the infrastructure sector and so the rules that are thus made are consumer-friendly.
12. Do you feel used machinery (second-hand equipment/re-furbished equipment) market is getting importance in the current scenario to reduce the capital cost of road projects?
I feel that a debutant businessman or a company prefers used construction equipment because it is the best way to gauge the market. It requires lesser investment, and poses lesser risk (financially) when compared to new construction equipment. Even experienced rental companies opt for used construction equipment. I feel there is always a market for used machinery.
13. What is your response to Government’s Atmanirbhar Bharat Package 1,2 and 3 for economic growth? Has these benefitted the company and the industry in general?
The Atmanirbhar Bharat package focussed on various sectors including social welfare, manufacturing, housing, infrastructure, exports and agriculture. Some schemes stood out while others were time-bound. There are some stringent qualifying conditions for some schemes. On the whole, I welcome the packages and I see it as a good way to put our economy back on the growth track. Banks are responding positively to the packages.
14. How does your organisation plan to address carbon neutrality in the coming years? Please tell us more about your sustainability-led initiatives.
I share this information with great satisfaction - 100 % of the power used by Propel Industries is generated using renewable resources. We use both solar and wind power. Being energy self-sufficient has been our dream and we have achieved it. We have a sewage treatment plant and the recycled water is used for our gardens surrounding the factory. We are looking at other ways too to address carbon neutrality. The executive director of the International Energy Agency (IEA) had issued a statement in January 2021 announcing the release of a roadmap to reach net zero by 2050. We wish to do our bit to make it a reality.
This interview was first published in the August 2021 issue of Crushing and Quarrying World.