Fausto Carboni, General Manager, BU Mobile & Wind Solutions, Bonfiglioli
We not only have a factory but also have an engineering centre which is able to handle the requirements from the customer and design specific products, tailor-made for Indian customers, says Fausto Carboni, General Manager, BU Mobile & Wind Solutions, Bonfiglioli. Excerpts of the interview.
How do you view the current market trends?
Our expectations were much better than the reality turned out to be. We saw a good trend in the market till the month of June last year and then everything went quiet. The overall market is unfortunately in very severe recession. One of the reasons for me to be in India was to measure the market momentum and observe the general feeling of the operator. I would say it is not as bad as the figures would suggest. People see the market in a bad light now but everybody is optimistic for the future.
We are here for the long term, so we take home this basic optimism which is not for today but for tomorrow and the day after tomorrow; everybody is still betting on growth. Secondly, we see a strong trend of manufacturers tending to utilise India as manufacturing base for exports, leveraging on the increased competence of the Indian manufacturing capability as well as the currency and the labour content. That in turn, will bring to us more business opportunities as suppliers of components because if international manufacturers are reluctant, their Indian businesses are a supply base for exports, and that will induce an incremental increase in business for us in this country. We expect to see something much better in the future.
What are the important value-adds through technology upgradation and customisation for the Indian customers?
In order to bring a better value proposition to the customer, in the last two years, we invested in an engineering centre in India. This means that we not only have a factory but also an engineering centre which is able to handle the requirements of the customer and design a specific product tailor-made for local requirements, not necessarily the same products we make in Italy. What's more, we are able to produce it in our factory. So we have a full-fledged company in reality and this enables us to put in front of the customer, the best value proposition. India is a big country with very specific needs; they do not necessarily need the same product here as everywhere else.
What are the green initiatives Bonfiglioli has taken?
Our green range of products include the travel drives we introduced in India, hydraulic motors which are able to save fuel and be more efficient, with variable speed systems which can be utilised by the manufacturers instead of the traditional single-space system. For the future, we are looking at electric drives as a dramatic improvement in fuel efficiency but it is still too early now to talk of production. We just want to really be ready to go into that direction as well.
So from hydraulic drives to electric drives, what is the cost difference?
Today the biggest hurdle is not only the cost. The cost difference is there but the major problem is energy management - batteries or generators or electronic control. So that is the portion of technology that needs to be developed for construction equipment.
What is your marketing strategy in the current slow market?
First of all, the market in India is changing. It is changing from general purpose machinery to specialised machinery. This is the time when we come into our own, because we are the manufacturers of tailor-made transmissions for specialised equipment. For instance, we are there as the market goes from backhoe loaders as a multipurpose machine to wheel loaders and excavators. In reality, our marketing strategy in India is a little different from other countries because in India we are at a transition stage. So we just need to apply things that we have seen in other parts of the world and then go seeking the new trends in the world market. This is true of all earthmoving and road construction machinery. When you move from the traditional rollers to the new generation of hydrostatic drum driver rollers with vibratory system and so on, these need specialised transmissions and the performance requirement is increasingly high. Therefore we can make this a value add. In my opinion, our market in India today is only a fraction of what it will be in the future because the portion of the market we are working on is increasing and will be increasing even more; we have seen the same trend in other countries, too.
How do you assess the dealers and distribution network of your products?
Our sales floor is limited because they need very few skilled professional players. We do not need distribution as such. People in the aftermarket need standard distribution to reach the customers in different regions of India. We are not part of the same picture. We need to speak with maybe 20-30 players in the country. So our current sales force accounts for very few people but they are effective in reaching the OEMs.
In terms of after sales service at our factory in Chennai, we have a competitive sales force; we have a competitive engineering force which can give our customers all the support they need. Our customers do not require us to directly service the machines, but we need to give instructions to their mechanics. So one typical thing with people like excavator manufacturers is that they send mechanics to our factory, and we train them how to dis-assemble the transmission; then they will handle the business themselves. So we just need a few regional offices in different places with people for logistics.
Do you provide the necessary training or technical skill development to the customers?
Yes, we do. They want to do it themselves. Our component is very integrated in the machine.
Kennady V Kaippally, Country Manager, Mobile & Wind Solution, India, Bonfiglioli
"We believe that the enhanced investment forecast on infrastructure sector, as per 12th Five Year Plan, will be a strong growth driver for the equipment industry in the coming years. Opportunity for supply chain flexibility and the impact due to exchange rate escalation have renewed equipment manufacturers' thrust for localisation. BTPL,100 per cent subsidiary of Bonfiglioli Italy, with its technological strength and local footprint, is poised to benefit from this shift. By bringing global solutions at doorstep, we are providing strategic advantage to our customers."