We consider next five years as very important growth period of access equipment business in India and we are preparing ourselves towards this goal, says Subhamoy Ghosh, President, Mtandt Group. Excerpts from the interview.
During Excon 2013, Mtandt along with IPAF initiated steps to set up an association for access equipment. What is the scenario now?
The India council of IPAF is now formed and Mtandt is on thegoverning body of this council. We expect, with support of international IPAF body and contribution of active IPAF members in India, we will be able to make right representation to the policy makers of the country for stricter implementation of safe practices for work in height.
Do you think that the India construction practices/methodologies have matured enough to opt for advanced systems that you offer in man and material handling?
We have already seen some big construction and project companies are emphasising on the right practices and methodology. Although a lot of these initiatives gets diluted in ground scenario, concern of safe practices in construction industry is ever increasing. Once India comes back to the second phase of growth story, it will be quite important to complete our projects much faster than we have been doing earlier. With demand of improved speed will drive the demand for such equipment. One good sign for us is that people who have invested in these equipment do find them extremely useful and productive for their business environment and this has motivated them for repeat buying already.
How do you assess the safety related issues in India?
In general, concern and respect about safety is improving in every level. However, as I mentioned earlier, unless we relate safety with productivity, people will still not be motivated enough to invest in equipment related to safety. We will also require the government to bring in right regulation and implementation process for working with safe man and material handling equipment, which can really enforce companies to changes their mindset.
Success of access platform will largely depend on changing our mentality about safety. In this country, we still consider ´safety´ as an added cost to our business and thus become last priority for investment in most cases. Obviously, there is some exceptional companies, where ´safety first´ is not just another signboard, but considered as ´religion´.
We have to believe and understand safe working environment increases productivity and quality of work, thus safe practices can ´save´ substantial cost and help in improving bottom line.
Also, as a matter of fact, in our country new application areas are being created. Elevated metro projects, flyover construction, new airports and shopping malls with high atriums, and factory shades with high roofing are creating new opportunities for access platform business.
Which segments are expected to drive the demand?
In our product pyramid, we expect volume sales through products like vertical lifts (solution for 5-14 m) and scissor lifts. There is a big latent market for these products and we would like to create more easy connectivity between our potential buyers and sales network to capitalise on the volume business opportunity. We also see a big growth opportunity for truck-mounted solution for work platform and cranes, as mobility and productivity become an issue for faster execution of projects. Demand of truck-mounted access platform (for insulated solution) will also come in a big way in India, as power companies cannot afford shut down for maintenance work anymore. We are also very confident about the future of tele-handlers as the multifunctional material handling solution in Indian industries.
On the higher side of our product pyramid for access platform, we have possibility of sales of self-propelled boom lifts, crawlers and trailer-mounted access platform for utilisation in new airports, shopping malls, IT and business parks, big hospitals and certainly to the rental and fatade cleaning people.
What is the scope for growth of access equipment from rental?
There is a huge opportunity of growth from rental companies for access platform business. However, currently the rental industry is facing enormous challenge due to poor payment flow from their customers, post-contract negotiation for closing of long standing overdue. Unless transparency is established between the rental companies and their customers, the growth will not be sustainable at either end.
While we relate business of rental companies to possibility of sales of access platform, there is another scenario. In all other developed markets, rental companies are the biggest contributors of sales growth for access equipment. However, as of today, a large portion of demand for these equipment are catered by uncontrolled import of second- hand equipment.
Regulation on second-hand machinery import and their usage can be a booster for the sales of access platform. But, it is also important from the point of view of rental companies, that there has to be some incentive from the end-user for deployment of new machines.
To what extent Mtandt has geared up to meet the expected demand?
We are connected with world leading companies who have been continuously upgrading their products technologically in line with the ever-increasing demand of market and safety regulation. We are part of this growth as their partners in India. In terms of capacity, we do not foresee any challenge with any of our business partners overseas. They are all geared up to enter in this big developing market together with us.
Will there be any more capex in India?
Since we are currently in distribution business, majority of ourinvestments is on stock, marketing and distribution cost. However, we certainly have plans of manufacturing some of these equipment in most opportune moment and we plan our capex for same in due course of time.
What are the initiatives taken by Mtandt to sustain the growth?
As long as we are able to communicate our value addition with customers, in terms of product knowledge and after-sales support, we believe, we will remain the market leader. Our focus area was to build product range and we are now really having a strong position. In a big country like India, coexistence of different brands is quite possible. The winner will be the one who reaches maximum possible customers and able to convince worth of their offering technically and commercially. So, enhancement of coverage is our key strategy to win new customer and market.