Arvind K Garg, Executive Vice President & Head, Construction & Mining Machinery Business, Larsen & Toubro Ltd
Arvind K Garg, Executive Vice President & Head, Construction & Mining Machinery Business, Larsen & Toubro Ltd elaborates on the various aspects of equipment selection criteria and the current trends in the market, from the perspective of an equipment supplier.
What are the fresh challenges emanating from paradigm shifts in customer expectation in large, medium and small buyer segments?
As far as procurement of medium to big size mining equipment by key players in the mining industry is concerned, the trend is towards evaluation based on Total Cost of Ownership, Life Cycle Costing, bundling equipment with Full Maintenance Contracts and Guaranteed Parts Consumption contracts. Then there are some major buyers, who would make purchase decisions based on Value In Use (VIU), where the superior technology and reliability factors of the equipment which would aid in higher availability and related increase in their production capability and value creation thereby, is taken into consideration.
The medium and small segments, buyers are gradually shifting towards assets which have better longevity and low CAPEX and OPEX. This will necessitate the use of world-class technologies in the Indian markets. We have already seen the Indian customers appreciating the use of Telematics, superior hydraulic and engine technologies which are helping the customers achieve superior equipment life and high reliability. The utilisation of machines in terms of number of working hours clocked per year is one of the highest in India. Also, the applications are very tough and the equipment is subject to extreme duty cycles. The equipment suppliers will have to continuously innovate and develop machines which can meet the demanding Indian customer requirement.
Also, customers have started using a wider range of equipment from the traditional class of machines being used. For example, there is a growing demand for mini excavators in the 2-4 T class which was not present a few years back. So is it for the lower HP backhoe loaders and vibratory compactors.
Equipment versatility is one more emerging trend where the customer is looking forward for using one machine on a wide range of applications with various attachments mounted on it. This is driving the demand for attachments as well in India.
Skilled manpower for operating and maintaining machines is in high demand in India. There lies a large responsibility on the equipment suppliers to help in developing the skill levels to meet the complexity of these machines. Operator and foremen training will be very important. The Government of India has also taken several good initiatives on ensuring healthy engagement with the OEMs through the National Skill Development Corporation in this direction.
How do you respond to the above challenges?
We, at Construction & Mining Equipment SBG of L&T, are fully geared up to meet the ever-increasing demands of our customers in the construction, earthmoving and mining equipment sphere in India. Our value-based selling is the key differentiator in the market place, due to which our customers treat us as their preferred partners in their pursuit for excellence. We have a dedicated Application Engineering Team who would advise customers on the best mining methods, equipment selection and other aspects (during pre-sales). Post sales, we also conduct continuous improvement programs jointly with customers which render tremendous value to our customers.
We had commenced execution of long term (8-10 years) full maintenance contracts way back in 2001 for our D475 Bull Dozer (850 HP class) and successfully completed the contract to the satisfaction of our customers. Our product support team today has vast experience in all types of large size mining machines including 240T payload capacity class dump trucks. Our comprehensive product range covering small to mid-size hydraulic excavators, bull dozers, motor graders, wheel loaders, compactors, as well as medium to large size mining equipment (excavators, dump trucks, dozer, wheel loaders, motor graders) generally makes us one-stop-shop for all requirements of our customers in construction, earthmoving, road making and mining applications.
We are the pioneers in offering cutting-edge technologies in India through our associations with global leaders like Komatsu, Scania and Sandvik. Also L&T products have several patented technologies which have been developed at L&T R&D centre in Coimbatore.
We are committed to offer best-in-class equipment and services to the Indian customers and are continuously striving towards excellence in technology.
Our products are adapted for various applications like tunnelling, stone quarry application, long reach, general applications, earthwork, irrigation projects, roads and have a wide range of attachments like rock breakers, bucket crushers, log handlers and demolition tools.
What percentage of customers consult you as a manufacturer, supplier or vendor, before taking procurement decisions? Could you elaborate on such customer profiles?
L&T has a rich legacy of more than 70 years in the construction, earthmoving and mining equipment industry in India. With superior latest generation products from our principals (Komatsu, Scania) and our own products, and with our vast sales and after-sales product support infrastructure in India, a very large percentage of customers consult us in taking appropriate procurement decisions. Further, many customers take consultative approach by treating us as their consultants/advisors in matters related to equipment procurement owing to our rich legacy in this industry and our motto ´In Service Lies Success´. Also the application engineering expertise of L&T is what customers always bank upon to make the right choice of assets for executing their jobs.
Are Indian customers willing to pay for superior technology and performance enhancing product features? If yes, to what extent and in which aspects?
Yes, we have witnessed this behaviour in Indian customers since 1998, when we introduced a Komatsu hydraulic excavator (20T class, model PC200-6) in the Indian market. This product had superior technology in terms of the hydraulic system, engine and mechatronics in the equipment. Indian customers were willing to pay a premium of nearly 15 per cent over other equivalent capacity outdated technology equipment which were offered by other suppliers. Today, we have introduced the equipment which can communicate on real-time basis with the ´Komtrax´ and ´Komtrax Plus´ technology, where in the performance and health level of the equipment is available to the equipment owners in their computers and mobile phones. This technology also enables customers to take informed decisions on preventive maintenance and plan in advance for the maintenance and overhaul of the equipment. The Indian customers are very much aware of the life cycle cost benefits of using the best-in-class technologies and desire to have superior products.
What are the common but significant areas most customers focus on while selecting equipment?
Technology, product features, productivity (production capability, fuel consumption), economic life, after-sales product support, the service provider and his capabilities, his investment in service infrastructure, re-sales value, past provenness in similar application, price point, emission compliance and other environment-friendly aspects, safety features etc, are some of the key considerations.