Terex Backhoes perform faster while digging and loading at lower operating costs, with durability through quality and technology innovation.These products have been developed in India for the Indian market, says Vijay Sharma, Executive Director, Terex Equipment.In an exclusive chat with EQUIPMENT INDIA, Vijay speaks about the changing trends in the backhoe loader industry. Excerpts from the interview.The sales forecast by Off-Highway Research for backhoes is 36,000 units by 2015, up from 30,000 in 2011, whereas for the crawler excavator segment alone, the forecast is 35,000 units, up from the 2011 figure of 14,500. Is the backhoe's dominance decreasing?It is beyond any kind of doubt that the backhoe loader has been the flag- bearer of the construction equipment industry in India during the last decade.From the levels of 3,000 backhoes in a year to over 33,000 units in 2011, the Indian backhoe loader industry has seen phenomenal growth. During the next three to four years, we firmly believe that the backhoe loader industry will touch levels of 45,000-50,000 per annum.However, at the same time, there is more demand for higher capacity machines like crawler excavators and wheel loaders as timely commissioning of highway projects have become a big factor in the infrastructure space.This is why the sales of excavators has grown by leaps and bounds, and is going to compete with the levels of backhoe loaders in terms of volume over the next few years.There is a school of thought that states there is a visible drift from the backhoe market towards the wheel loaders market, especially in the below 10T capacity. Compared to the total volume of backhoes, though, the growth in terms of numbers for loaders is a meagre 5,000 units, though it is still a growth of above 80 percent. There is definitely a growing demand for machines with higher capacity and output as there is more pressure on the construction houses and contractors to commission the projects on time.Also, as there is more of a thrust on the mining sector as a whole, the demand for wheel loaders has increased, especially in the 10-12 tonne category. However, except for a couple of domestic manufacturers, these machines are still imported and so the cost of ownership is very high vis-à-vis backhoe loaders. Hence, the government needs to encourage more local production of such high capacity machines which in turn is going to benefit the overall infrastructural growth of India.In such an evolving scenario, is there any shift in your business strategies?What are the major value propositions from Terex Equipment in terms of fuel efficiency, performance, back-up service and availability of spares, etc?Since the start of Indian operations in 2005, Terex Equipment has been relentlessly working towards providing advance technologies at the customer's doorstep and that too, at an affordable price, coupled with world class after sales support. We are allocating a good portion of resources in developing value for money products for our customers. Our strong distribution network is instrumental in providing round- the- clock after sales support. As a result, we are building a strong platform of satisfied customers, who swear by Terex as their true and trustworthy partner. At the same time, we are ensuring that all our employees have undergone rigorous training sessions on product know-how, organisational behaviour and customer support. Our finance arm, Terex Financial Services, is helping us provide prompt financial solutions to our customers. Over the last two years, TFS has been instrumental in forging exclusive tie-ups with leading financial institutions in India like HDFC Bank, Tata Capital, and more.Due to these arrangements, we have been able to address the long- term demand of our customers. As a result, our machine sales have been benefitted, especially in those regions where our customers found it difficult to get quick financial support.The growth of the mini-excavator market was successfully blocked by backhoes initially. Do you think that the projected growth in the mini- excavator market will impact the backhoe market?We don't think that the projected growth in case of mini-excavators is going to impact the sales of backhoe loaders in India. This is mainly because of the fact that the backhoe loader is a versatile machine and can be used for numerous applications in the field of earthmoving. Of late, there is higher awareness about the utility of this machine in rural markets and more farmers- cum- entrepreneurs are starting to own these machines.Could you throw some light on the challenges faced by the industry? What solution do you recommend for the problems?Rising input costs, higher wages and higher interest rates are becoming a matter of concern for the CE sector. Thus, there is definite pressure on our margins. As a result, most of the players in the CE industry including us, were forced to increase machine prices by 4-5 percent on an average. However, we believe that the Indian infrastructure development story is going to offset this passive scenario. The demand will keep its pace over next two to three years irrespective of rising interest rates and prices. We also recommend that our Union government provides a level playing field vis-à-vis imported machinery from China, in terms of custom duties and registration issues.Tell us the about the range offered by Terex Equipment, and its unique features.The new range of backhoe loaders – TLB 740S with 76 hp Kirloskar engine and TLB 844S with 90 hp Kirloskar engine - is a result of continuous upgradation in innovation and technology. In the compact loader segment, we are manufacturing HEMAN 175 Skid Steer Loader, with the option of 65 hp or 80 hp engine, making us the only local manufacturer in this space, in India. This machine, which has more than 50 standard attachments, is an engineering marvel. Further enhancing its product offering to Indian customers, Terex recently introduced RL 4000 Light Towers, which addresses the requirement of construction houses and builders to work efficiently even during night.Terex Backhoes perform faster while digging and loading at lower operating costs, with durability through quality and technology innovation. Highlights of this product are fuel efficiency through unique Smart UC Hydraulics. These products have been developed in India for the Indian market from the application and maintenance points of view. They are almost completely indigenous. Tougher, stronger structural parts such as boom and dippers, heavy-duty stabilisers with adjustable wear pads have been introduced to achieve longer service life than competition in Indian tough applications.Improved protected hose routings and other hydraulics have been designed in segments to achieve lower replacement costs and longer uninterrupted working.Our Skid Steer Loader is known for its compactness, maneuverability, versatility and ease of maintenance. With its wide range of attachments, it can perform in the most demanding conditions and can be termed as a perfect profit- earning tool. The lighting tower is equipped with advance features like powerful 4000 watts of output from metal halide lamps, which is enough to illuminate 8 acres of work site, 360 degree tower rotation and 30 ft tower height at full extension; this machine is suitable for all kinds of illumination needs. Recently we have introduced the TL 210 wheel loader in the 13 tonne category with a payload capacity of 4.5 tonne and vario-power transmission fitted with hydrostatic drive.Brief us on the attachments offered along with backhoe.At present, we are offering a good number of attachments with our backhoe loaders like rock breaker, 1.2 cu m loader bucket, 0.3 cu m excavator bucket, ripper tooth, 7-in-1 clam shovel, extendible dipper, trenching bucket, ditch cleaning bucket and more.What is your view on the emerging competition in the CE market and your strategies to take on the competition?With the kind of growth happening in the Indian CE industry for last two to three years and the potential lying ahead, the competition is bound to increase, along with the arrival of new players like Mahindra and Ashok Leyland-John Deere, as also some Chinese companies. However, we see enhanced competition as an opportunity for us to work harder in improving our offerings to our customers. Our R&D cell is continuously striving to design new add-ons to our existing products and we are quite confident about the relevance of these new features to our customers. At the same time, we are also in process of adding new products like the world renowned Terex wheel loader, mini-dumper, soil compactor, in our portfolio.Regarding Indian markets, what propels the product—CE price, quality, and brand or value additions?The Indian customer is very conscious about the output he gets for spending every paisa from his pocket. But there is a continuous shift of preference from machine's buying price to reliability and performance. This is why we are trying our best to offer a performance-oriented product with acceptable quality and that too, at an affordable price. We can proudly say that Terex as a brand, is now considered as a provider of value for money products which deliver reliability and high performance output.Tell us about your manufacturing facilities in India? What is your current manufacturing capacity? Any plans for capacity augmentation?At present, Terex Equipment has a state-of-the-art manufacturing facility at Greater Noida, spread over 35 acres of vast land. This facility is equipped with advance manufacturing technologies like plasma cutting, robotic welding, ultra modern paint shop and many others. Here we have a production capacity of 2,500 machines on annual basis.However, foreseeing the tremendous potential and opportunity available in future, we are already in the process of ramping up our capacity to address the increasing demand for our products.