VG Sakthikumar,Chief Operating Officer,Schwing Stetter India. There are many announcements from the government which augur well for growth, says VG Sakthikumar, Chief Operating Officer, Schwing Stetter India. Excerpts from the interview. How do you assess the current CE market scenario and its growth prospects in the long term? If you do an analysis of the moving average of quarterly sales of companies, we are just in the process of moving up, to get back to the original trajectory of sales growth; it will take at least two more quarters. So, business is expected to come back to its original position around then. However, the long-term growth potential for the country is tremendous; there is no doubt about that. The current slowdown is a temporary lull; everything will move steadily in another two years. The industry will not just grow, it will grow manifold. A lot of infrastructure work and activities are happening in the country. The current level of equipment production or purchase will not be sufficient to implement these projects and therefore it has to grow at a much higher speed than it is growing now. As per your assessment, which are the major areas to be addressed on a war footing? The most important thing is getting your operational efficiency right and being in a position to ensure that you stay fit and be prepared for temporary setbacks. Companies that miss out this will have a serious problem in the long run. In terms of investments and financial aspects, as the requirements grow, one has to be careful when investing. At the moment, it is not a good time to go for expansion of any product lines as it will only put pressure and create problems in the market. We have to be watchful and be prepared. We have to be optimistic and cautious at the same time. Regarding policy initiatives, there are a lot of delays due to issues like land acquisition. However, things are changing. After the Presidential election, there were so many announcements which will make growth even faster than what it was in the first few months of this year. We are hopeful because the mood is positive and we are expecting a lot of things to change on the ground. What is your take on the downward trend in the Chinese CE market? The Chinese construction equipment market is currently down but at the same time, it is more of a problem for fringe players rather than big players and multinational companies. As for the issue of machines coming out of China to other markets like India, if somebody makes a good product and is able to give good service support, and if the customers view the product as something they can trust, all should be fine. But how many are prepared to do that at this point in time? Customers are very intelligent. Now the Indian market is mature and customers look for value for money. So they will know that if you buy a product, you need a good support system and the machine should work without any problem on site for many years. So we are not worried about a price war because we have been selling our products at a higher price than the competition and we know how to make a customer understand the value proposition offered with our products and services. The cost of average equipment in India is still very low compared to international market prices. How long will you be able to sustain the pricing levels? Optimisation is the most important thing. You have to give a high quality product at optimum cost and that is the challenge for people who want to be in the Indian market. If you are not in a position to do that, then maybe India is not the place for you. To assemble a product in Germany will cost much more than what it will cost in India. The labour costs and logistic costs are also different. It is not as if the same product with the same cost is sold at a lower price in India. Indian operations take care of that. We are able to build our products here at the same quality and at competitive prices. Given the intense competition, what is Schwing Stetter's core focus? In simple terms, we can put it like this: when the market is doing well, everybody can do business. When the market is tough, only companies with a serious commitment to the market will survive. We are that type of a company and hence, we do not have a problem. I am not saying we are doing better than last year, our business has come down but compared to players in the same line of business, as a market leader, we will be the last one to be affected. What strategy have you adopted to stay in the competition? There is no specific strategy. We continue to do business the way we are doing and that itself is helping us. There is nothing extra we are doing, except for trying to make our system operationally more efficient. We will be launching more products in our ongoing efforts to bring in more technology and products to India. Many real estate and urban development projects are coming up these days. What opportunity do you see there? This is a small portion of our requirement. We are undoubtedly doing well but we need total infrastructure projects to pick up for us to do well in all areas. Real estate can drive growth in ready-mix companies business and with some specialised products. If you have to grow, you need business from all infrastructure projects: in power, road, airports, etc. How do you differentiate your products in terms of competition? All our products are superior. It is a known fact that we have the lowest fuel consumption for the same type of job- in-class and our products have a long life; our oldest working machine in the country was manufactured in 1972, a 40-year old machine. That is the reason we enjoy this type of market position. Could you brief us on the company's initiatives on skill and capacity development? We have four training centres at the moment, one each in Delhi, Kolkata, Chennai and Pune, and will be opening one in Hyderabad soon. We will be expanding this activity and will train our machine operators and the machine operators of our customers. We also conduct a lot of reference courses. Most of the concrete pump operators in our country have been trained at our training centres. Our training department works parallel to our business operations. They have their own target and employees, only for training. We also act as an outsourcing agency for many construction companies who want their employees to be trained. Any more capex or product launch plans for the company? Yes, we will be launching a lot of products during the forthcoming bC India 2013 in Mumbai. How do you see the growth potential in another three years? It will grow. India's GDP growth rate was revised four times by the Government of India itself, which means these are very turbulent times and nothing can be predicted. I can generally tell you that it will be good but cannot predict in percentage. So we have to wait and see. We are hopeful, though. If you are able to work efficiently then you will be in a position to achieve growth. When the going gets tough, the tough gets going.