We are an Indian company catering to global customers. All our parts are indigenously made. So, we have already achieved 100% localisation, says Mr. V. Senthilkumar, Managing Director, Propel Industries in an interview with the Crushing and Quarrying World team.
Do you observe any fundamental change in customer behaviour before and after the COVID-1 9 pandemic?
The year 2020 has been a different year for everyone. The pandemic has had a great impact on all aspects of people’s lives. Customer behaviour has changed. There is a decline in discretionary spending and the preference for trusted brands is for everyone to see. Certainly, technology is ruling the roost. Ever since the lockdown started, we have been trying our best to support our customers in every possible way. We are holding hands with them so that we can wade through this tough phase without much trouble.
Customers stay connected with us more, these days, through digital means and this is certainly a win-win situation for us. We are able to solve many field issues by guiding the customers over phone. We have upheld the ‘Customer first’ slogan always and it will remain so, in the future too. All our plans will be driven by this slogan.
How has the SOP -COVID-19 measures benefited your organization and the Supply Chain.
The SOPs given out by the central government has certainly saved many a lives. We, at Propel Industries, strictly adhere to the same. We are able to protect our employees’ health during the pandemic which in self is a great achievement. I always believe in my greatest asset – manpower. Their wellbeing is my priority.
The pandemic has pushed us to re-evaluating our supply chain. I think it is important to diversify the supply chain risks just as India is on its way to becoming the preferred destination for global companies.
The restrictions on people’s and goods’ movement has affected the supply chain leading to the shortage of raw materials.
If raw materials has to be imported, then the supply chain was getting affected. The longer product cycle and increased financial liabilities is being faced by industries in all sectors. Thankfully, we are an indigenously-grown company and so our supply chain did not feel a huge impact.
When do you expect the capacity of your Factory to reach Pre-COVID-19 level?
I am optimistic about getting back to normalcy very soon. With the vaccination drive happening in full swing, I have more reasons to be so. Economically, we have to do well and get back on track for the benefit of our people and for the nation. Propel Industries has been doing well in the last few months and I wish the momentum to continue.
NHAI is very Optimistic about awarding 11000 kms in FY21 (Till Sept 31, 2020, NHAI Awarded 40 projects of 1330 Kms worth Rs.47289 Crs), will these new upcoming road contracts enable you to meet the FY21 target.
Undoubtedly, there is huge investment happening in the infrastructure industry. Recently, the government has extended its Rs 111 lakh-crore ($1.5 trillion) National Infrastructure Pipeline to cover more projects by 2025. This has been done in an effort to help economic growth just as the entire nation is recovering from the pandemic-induced recession.
The National Infrastructure Pipeline has now been expanded to 7400 projects 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.
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.
What do you foresee Private Sector (39% of Rs 19.6 Lakh Crores from FY20-25 as per NIP data) participation in Highway Project Implementation, considering GoI have 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.
Can you highlight govt’s subsidy in Construction Equipment Finance to improve your business.
The demand for construction equipment is going up in many parts of India. I think the government is committed to infrastructure speeding and so the rules are consumer-friendly.
Will your organisation be able to achieve 100% localisation in next two years?
We are an Indian company catering to global customers. All our parts are indigenously made. So, we have already achieved 100% localisation. The Prime Minister’s slogan – vocal for local – is best suited for Propel Industries as we have always held the ‘Made in India for global customers’ tag with pride.
Do you cater to Large Construction cos/Midsize sub-contractor/Retail Contractors.
Our customer base is vast, cutting across state and country borders. We manufacture more than 150 products and so our customers range from large construction companies to retail contractors.
Do you feel used machinery (2nd hand Equipment/Re-furbished Equipment) market is getting importance in the current scenario to reduce the capital cost of road project?
Mostly debutant businessman or company prefers used construction equipment because it is the best way to gauge the market, requires lesser investment, and poses lesser risk 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.
How are Banks/NBFC’s responding to Financing Construction Equipment’s after Govt’s announcing Atmanirbhar Bharat Package 1,2 &3 for the Economic Growth.
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.
On the Technology front, your equipment’s are supported by AI to benefit the contractors, if so, can you brief us on this.
We have rolled up our sleeves and are working towards making the best use of new technologies in our production process. We have realised that incorporating IoT has helped in cost optimisation and has improved productivity. The use of IoT has led to the use of Artificial Intelligence which is beneficial.
Can you highlight about the Exports of your Equipments?
Within a span of 11 years, we have extended our operations to 14 countries and are fast becoming the preferred supplier in all these countries. Our dedicated sales and service team ensure that we carve a niche for ourselves in whichever foreign soil we place our foot on. We are planning to expand our dealer network overseas so that Propel becomes a ‘Made in India, sold globally’ brand.
Any New Product launch in the coming months?
Prowash V2.0 is the new product we are going to launch soon. It comes with enhanced performance and reliability. There are four models in this product. They are PW 100, PW150, PW 200 and PW 250. We are introducing 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 & MVS 2060 4 Deck. We will also be introducing vertical shaft impactor in the models AVVI 55, AVVI 75 & AVVI 100 to handle wet feed materials. This ensures dust suppression at the output, thus safeguarding environment against air pollution.
How does your organisation plan to address carbon neutrality in the coming years?
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. Let us all join hands to make it a reality.
This interview was first published in the April 2021 edition of Crushing and Quarrying World magazine.