Michael Schmid Lindenmayer, Managing Director, Putzmeister Concrete Machines."We are increasing our investment in India and our phase-II expansion is already on. We strive to give international quality to our customers at the best possible price by absorbing additional cost to the extent possible,” says Michael Schmid Lindenmayer, Managing Director, Putzmeister Concrete Machines. In a chat with Equipment India, Michael talks about the growth plans and the initiatives taken by the company to service the customer better. Excerpts from the interview.Globally, what is the growth story of Putzmeister, especially after the crisis?Worldwide it’s a picture of light and shadow. Overall, Putzmeister has recovered and is on the growth path again. The growth rate worldwide is not of the level we have in India. We registered good growth in South America, Brazil, China and Middle East. Europe is still flat and specialists think that there might be a light recession in the construction industry which is not a good sign for machine builders. Then, the US market is also not promising at this point of time. We are well established in the emerging markets. We have manufacturing facilities in Brazil, China and Turkey, and of course in India. We are a true global player and we have a growth rate of 10-15 per cent and we expect that the growth rate will continue in the next year.What was the performance in Indian market like?The overall industry growth is around 24-25 per cent, whereas we have clocked a growth of 70 per cent, even in trying times. We have benefitted from the growing trend where more customers are shifting towards concrete pumping. To give a glimpse of our overall growth in India, let me put it this way, we commissioned our plant in 2008 and today, it is too small. We are increasing our investment in the country and our Phase-II expansion is already on. When you finish one phase there is already a plan for the next one because this market is really amazing.What is your take on the likely investment of US$1 trillion on the growth prospects of the CE industry?The impact will be huge. All Tier 1 cities have upgraded or need to upgrade their airports; also many of them either have invested in Metro lines or are in the process of doing so. A huge number of thermal, nuclear and hydro power stations are needed to cover the future demand for electricity. There is renewed focus on the development of the road sector on a fast track. All these projects are expected to be accomplished in shorter construction times and in a better quality than in the past. This can only be accomplished by applying modern construction methods which are based on modern construction equipment. So the demand for construction equipment will be on a high level within the next years to come.What is the impact of the fluctuating cost of input materials on your performance?We have seen a regular rise in the costs of the inputs materials, be it steel, fuel, power or other commodities that directly or indirectly contribute to the final product. These rising input costs definitely make an impact on the margins with which the industry operates. On the other hand, we see that customer's expectations are increasing as he is more exposed to international quality products, he demands the same level of quality and service. We strive to give an international quality to our customers at the best possible price by absorbing additional cost to the extent possible.How do you tackle the supply chain challenges?Our high-technology equipment requires a lot of imported materials and components. To have all these components at the right time at the assembling belt is great challenge. In order to react quickly to the demand of the customer and to be complete, the product needs to be assembled in India. Due to the fact that the supplier market here is not as developed as in Europe, we have to import the majority of the components like hydraulic systems, control systems, critical steel structures from Europe. To manage this long supply chain is one of the main challenges.How do you counter these sorts of issues?Our major focus now is to localise production, especially aggregates which are currently imported from our parent company in Germany. We have identified some vendors who can provide the same level of international quality at a competitive price. We are closely working with these vendors and suppliers and guiding them to produce components as per our standards and requirements. We are also identifying the areas in which we can reduce the costs, so that we can make the products available to the customer at a competitive price.Does it have any impact on quality?We never compromise with quality. To tell you the truth, it’s our product quality that has won our customers’ faith and trust.Tell us about the service initiatives taken by Putzmeister.We are quite focused on service. When we started in India we had 35 people in service before we even hired the first salesman. So today, we are pretty organised in all the regions, we have set up call centres to take care of our clients. The reason we have these call centres is that if the service person normally responsible for the pump is busy with another job, we do not want our customer to wait until that person is free. We immediately want one of our service persons to be sent to that location. Moreover, with these call centres, I can control the entire fleet. We have 1,500 machines all over India. This shows that we have a business process behind and that all our issues are addressed in time. Our statistic shows that from a hundred calls, only 40 per cent is related to the pump where there is a technical problem. Our duty as an OEM is not only providing the equipment, we have to make a success story to the customer and get his job done. We do not ask if it is our problem or theirs, we just solve it. That’s why we have a concrete expert in all the regions.We have also started the concept of service vans in Bangaluru. In a short period, we will replicate this model in other cities, too. Our concrete pumps are high-tech products. The operation of these pumps depends on various factors like jobside conditions, concrete quality and skill of the operator etc. We address these issues by having a specialised team for concrete pumping, providing extensive training to our customers and having a wide service network with local spare parts warehouses. In the majority of cases, we send our experts to check the quality of concrete, whether the mix is right quality, pumpable, etc. We recently opened our office in Kolkata as headquarters for the east region, to provide faster service to our clients there.What is the potential for concrete pumps from the rentals market?The rental market is quite encouraging. There are a lot of infrastructure projects coming up and they are executed by corporate companies who normally purchase 50-60 per cent equipment and opt for rentals for remaining capacity as it gives them more flexibility. We are very happy that we have a strong presence in the rental segment where the demand for quality and reliable equipment with very low operation costs is high. We see very good market potentials from rentals.