Putzmeister has been in India for more than seven years and we are here to stay. We are committed to India, its people, its future and we are continuously developing new products for our valuable customers Wilfried Theissen, Managing Director, Putzmeister Concrete Machines. Excerpts of the interview.
Putzmeister had its focus on concrete pumps. Now it has spread its wings further...
Putzmeister has a long and exciting history in pumping, Mortar, concrete and Shotcrete pumping as well. This was and is Putzmeister's world but as we are constantly adapting to our customer needs we now also move into batching plants and transit mixers, to be able to offer a full range of Putzmeister products.
As technological leader we joined forces with the best players in the field. The latest example is the acquisition of Simem a world leader in batching plants, deal which will be finalised very soon. We have also bought Intermix in Europe which is a highly reputed transit mixer manufacturer.
When will the new range from Simem and Intermix be launched in India?
We will be able to produce the whole range of batching plants from 20 cu m to 400 cu m from Simem in India very soon. Some administrative points need to be finalised but in terms of sales, we are already working together. As far as transit mixers from Intermix are concerned, it will take some time because the price level in India is far too low for those sophisticated machines. You have at least ten players in the market; the capacity is higher than the demand, so why should we walk in now?
Is there an issue of overcapacity?
Yes, there is overcapacity created in all sectors, be it the construction equipment industry or the automotive industry. The demand is really down. For example, a country like Turkey, with 65 million people sells 350 boom pumps every year, and the Indian market counts for only one hundred. The problem is that when India was described a couple of years ago as the next super-power of Asia, everybody saw the huge potential, and a lot of people came in for a slice of that cake. But since that cake is so small, a lot of people are struggling now.
For almost 18 months now, the off take of equipment has come down. How has it impacted your performance?
Well, I would say it is more than 18 months; things started going down in September 2011, so it is over two years now, and I cannot see it improving really, until after the elections. Hopefully by the end of 2014, and in the next two to three years, the market should pick up. It absolutely has to pick up; the needs for infrastructure, housing, power plants, water treatment are huge.
On our part, we have been doing quite well. We have steadily increased our market share. The global market in India is down but we have compensated by exporting to our neighboring countries, for example, South-east Asia, South Africa, Japan, and Brazil. Basically, we have improved our quality significantly so that the products made in India are acceptable in countries which demand high quality standards. Especially Japan and we are successfully exporting to them.
What is your percentage of export?
It is about 25 per cent.
Do you find any kind of positive signals coming from the government?
Well, there are a lot of promises, but they always die down! It is fairly obvious the government has to get its deficit under control. The inflation must come down to below 5 per cent; it is around ten per cent now, this cannot continue. The interest rates are also far too high at 12 per cent, and this makes it very difficult for investors. Access to money is also very difficult in India, and on top of it, the devaluation of the rupee has made matters worse. It is good for exports but India is not an export country; India is importing far more than it is exporting. Therefore, it is hitting the Indian economy a lot, since one is unable to find all the parts one wants in India, so it has to be imported.
So, how do you sustain the costs?
Yes, it is a big burden because Indian customers are very price-conscious. In the long term, it's not going to be sustainable. We have still a high value of parts coming in from abroad but 80 per cent of all parts are localised.
Has there been any change in the market dynamics after Sany takeover of Putzmeister?
What is the takeover you are talking about? I think it is the media or some competitor who started this speculation. Putzmeister is an independent entity inside the Sany group. We have a one- brand strategy inside the Sany group, so Putzmeister is continuing like before. In India we have integrated the sales and service team of the Sany concrete division. Sany still has heavy machinery equipment but the concrete part is run by Putzmeister. There are two dominating brands today, Putzmeister and Schwing Stetter. In some segments, we are the leaders and in some segments, they are the leaders. So, that is fair enough.
Has the slowdown given you more time to focus on servicing the clients and getting ready for the upturn?
There is a continuous process of improvement in all what we are doing; we have heeded our customer needs, and have improved our services towards them. We are completely customer oriented and thus focus all our attention and energy to the customer satisfaction, which pushes continuously to improve the quality of our service and service and roducts.
Is there a specific reason why the demand for concrete pumps is low?
First of all, only about ten per cent of concrete is currently pumped and it is all about the speed of construction, which is still very slow in India. The need for mechanisation will increase with the need of faster and higher level of construction activities. Usually, a city like Mumbai or Delhi would need a hundred truck mounted pumps every year, but it is not happening (yet). Maybe lack of finance could be another major hurdle.
Putzmeister recently launched a smart pump. Why is it 'smart'?
The stationary pump we launched during Excon 2013 has an electronic control (OPS) which allows much better control and monitoring. The pump is a green and smart machine; green because it only uses 70 litre of hydraulic oil instead of over 300 litre used by the competition; and smart because it gives all the information about pumping hours, running hours, and wear and tear.
How do you ensure a quality supply chain?
This is very important. First of all, we have a good organization within the factory and we follow up with reliable suppliers. We not only educate our suppliers, we train them, enabling and helping them to perform better, so that they become reliable partners.
Brief us on your growth rate in 2012 and 2013.
I think overall, the market lost about 40 per cent in the last two years but we have been able to stabilise our turnover because of exports. We have been able to cut costs, so the bottom line has improved and we should hit break even. Our turnover was around Rs 250 crore in 2012. There was no growth in 2012-2013, and it would be less if we didn't have the edge of exports.
Is there any more investment on the anvil?
Yes, there will be investment when the need arises. Putzmeister has been in India since nearly 10 years and we are here to stay. We have a solid base here and we will continue to develop by bringing in new products whenever needed. At this moment, there is no particular need for additional investments; we will grow steadily vis-a-vis the market.
Why should a customer come to you?
Simple, because we have the best product, the best service and of course the best quality.
Where do you see Putzmeister five years down the line?
At the top, of course.