Harpreet Singh Wahan, GM - Sales & Marketing, Enovation Controls India
We will be investing around $2.5 million purely on the manufacturing set-up. Since we are focused on technology and engineering, our investments are primarily on engineering and technology, says Harpreet Singh Wahan, General Manager - Sales & Marketing, Enovation Controls India. Excerpts from the interview.
The off-take of equipment has gone down considerably. Has this impacted FW Murphy?
We try to look at it from a different angle. Yes, I think though the sentiments of the market are not positive now, we look at it as a very good opportunity for equipment manufacturers as it is the right time to increase value in their products by using newer technologies and by looking at what is happening globally. When the market is on an upswing, people are majorly concerned about production and things like that and R&D and engineering are pushed aside. When things are on a level phase, we have seen renewed focus on engineering. Technology-wise India is 30 per cent behind global standards. I think this is good because it will help Indian manufacturers really prepare for the upswing; they should bring in technology at this time.
Is cost a major factor in the technology gap?
That is one of the areas. We do not have value of safety in the country whereas globally it is of prime concern. Second thing, both the process of automation/mechanisation and manpower are getting expensive. Machines become expensive because of emission norms and rising fuel prices.
Manpower is also becoming expensive. If you ask any equipment manufacturer, maybe five years ago, they could sent somebody to repair a small instrumentation fault at Rs 300 a day and today they need to shell out a minimum of Rs 1,500. This cost which has gone up will hit their warrantee cost. So, the entire technology needs to be more robust and I think we will have to change our attitude; we need to understand that even if initially we need to put in 20 per cent more on the cost front, it will help us in the long run because we will not have to run for warranty. I think that is the understanding that needs to come in.
How do you look at the integration of mechanics and electronics?
The scope for growth is immense. Today, close to 95 per cent of engines used in India are still mechanical and we have step-up products. These are products which take all the inputs from an analogue engine, analogue transmission or from any analogue part of the equipment and convert it into CAN, the protocol used by electronic engines. The moment it is converted into CAN, our ability to take decisions becomes electronic. So, though the engine is still mechanical, you have converted all parameters into electronic mode and you are taking decisions electronically. This very good interface that we offer our customers also makes the equipment`s future safe because all the equipment we offer work with plugs and electronic engines. So, tomorrow if the same equipment is fitted with an electronic engine, it does not need to change its instrumentation. This helps our customers who export equipment, too.
When do you expect the shift from a mechanical to electronic engine to happen?
Looking at it from an engine manufacturer's angle, it will be two to three years. We will see electronic engines take close to 60 per cent of the market and it will be primarily emissions-driven. The moment the equipment is asked to move to BS-IV norms in 2016, 80 per cent of engines will automatically move to electronic mode. We moved to BS-III or Tier-3 in April 2011 and we have a five years horizon. On the other side, globally today if you have to import engines, especially above 200-300 HP, it is electronic as those markets have already moved forward.
To what extent is FW Murphy geared to meet that kind of exponential growth in terms of technology and products?
CAN came in 1986 and we have been working on CAN products since 1990. Globally we are well respected by the majority of engine OEMs, be it Caterpillar, Cummins, Perkins, Volvo or Hyundai. We have also worked with a few big Chinese manufacturers on their CAN products. We also make engine controllers which is the heart of an electronic engine. So, we have been in the electronic engine business for the last 24 years and we are well geared for electronic engine growth. It was one of the reasons that we took a decision to come to India and establish our market here.
How long has FW Murphy been in India?
We have been selling products in India for 35 years but we have had our own presence for the last three years. Even though at present we do not have a manufacturing facility, we are working towards having it by the end of 2014. The facility will primarily manufacture India-specific products. We have already introduced a couple of products which are made in the UK at present.
What will be the investment?
We will be investing around $2.5 million purely for the manufacturing set-up. We rely heavily on technology and do not need a full-fledged manufacturing set-up. Since we are focused on technology and engineering, our investments are primarily in engineering and technology.
Did the devaluation of rupee hurt you?
To an extent. But our customers stick to us because of the value we provide and we also make them globally competitive. We are bringing world-class technology into the country and customers respect that.
The competition is getting tougher as the days go by. True. We have a lot of competition but I do not think you can really differentiate like that. On the hardware side, people can match us but it is our combination of hardware, software and application knowledge which is difficult to match, and they are what give us an edge. It is application knowledge which plays a very important role and our team here and globally is excellent when it comes to domain knowledge.
What is the kind of penetration you have been able to get so far?
We have been here for three years and we have been growing 35-40 per cent every year in spite of the slowdown. It is more to do with the Indian customer who wants more value. Today when a customer sees an advanced excavator, he wants the same, not because he fancies that but because he knows it will actually give him more value. Customers are becoming more aware and the market is opening up, so we want Indian manufacturers who are focusing on the export market. They have to match international standards. We spend a lot of time educating customers. We have very good relations with OEMs who did not work with CAN before we came in and educated them on electronic engines, in a way creating a base for electronic engines to come in.
How do you look at the potential for the aftermarket?
As a company, we primarily do OEM business. Yes, there is potential for the aftermarket but that is not our cup of tea. As we supply to engine and equipment manufacturers, we respect that things are custom-made for them.
Any new products launched for the CE market recently?
We have launched the PV 380, which is a display unit. It is a value-added product made for mobile equipment such as excavators, bulldozers, compactors, pavers and also for stationary equipment including compressors and pumps. We are getting quite a good response from our customers. We have also forayed into vehicle integration where we have launched an inclinometer which is a two-axis unit, a product which can tell one the angle a machine has moved. It is ideal for platform trucks and drilling rigs.