The major hurdles that will dent the ´Make in India´ campaign are poor quality of finished goods due to lack of workmanship and technology deficit in designing quality equipment, says Amarnath Ramachandran, President - Designate, LeeBoy India. Excerpts from the interview..
What are the challenges in localization of products?
The only challenge to localization is numbers. Our annual grader forecast for India for all graders put together is pegged at 400 units. Every 60 km of highway requires approximately two graders. Our potential highways to be built is 20,000 km (logically the forecast should be much higher). Major companies like CAT and Komatsu manufacture their own transmissions and axles in-house. For a company like ZF, Carraro, or NAF to set up a tandem axle manufacturing facility with the leftover quantity does not make any commercial sense. That is why there are no piston pump manufacturers, no large transmission manufacturers (other than those for backhoe loaders).
What policy initiatives do you expect from the Government to catalyse growth?
There should be a strong political will to stamp out corruption; there should be a central authority which quickly uplifts manufacturing standards to global levels. There is no need to sit and reinvent the wheel here; we need to immediately adopt ISO standards for testing, noise, safety, emission etc. If this is carried out without exemptions, then we will immediately see a marked improvement in quality of output which will ensure that exports improve and also people will prefer a local alternative to imported options. Once contractors get familiar to building within zoning laws, and on-time completion, we will see more contractors getting work overseas. FDI in roads and Defence will substantially increase manufacturing contribution to GDP.
What are the major hurdles to the ´Make in India´ campaign?
The major hurdles that will dent the campaign are poor quality of finished goods due to lack of workmanship and technology deficit in designing quality equipment. These are major issues apart from the other regular issues like poor industrial infrastructure, poor roads, congested ports, excessive documentation and delay in movement of goods. This is clearly highlighted by the fact that we have, in India, the same road construction equipment which was used to build the Autobahn in Germany, our roads are a far cry from this.
What are the major challenges in supply-chain management?
Supply-chain management will automatically get easy when volumes go up as there will be a host of vendors setting up shops here owing to demand. Transparency in tax laws, single-point grievance redressal for foreign investors, etc are needed.
Could you elaborate on the range of products manufactured?
LeeBoy manufactures a range of products that include: Motor graders: Two models - 985 (15.2T, 173 hp) and 785xl (13.2T, 150 hp); Crawler excavator: 523 (24.2T, 169 hp); Backhoe loaders: Two models - 699 (7.6T, 99 hp) and 679 (7.5T, 80 hp); and Concrete batching plants: 30-180 cu m/hr.
What is the export potential?
We export over 60 per cent of our products to countries in Africa, South-East Asia and the Middle East.
What is the demand-supply scenario?
The situation is very bad but we are confident that demand will increase. The confidence is based on the deplorable state of infrastructure today. This however, converts into a major opportunity for our sector.