Interview with Amit Gossain, Vice President—Marketing and Business Development, JCB India Ltd.

What is the growth the company is looking at in the coming years? And do you see steady infrastructure growth or will there be some kind of a slowdown? What are your projections?

If you look at India as a country, the chances of a slowdown are not much. There is a lot of infrastructure development that has to happen. You yourself know how many roads have to be built and how many power plants need to be made. And the telecom industry is also doing very well. But I think, from our perspective, a lot of projects that was announced earlier have been stalled. The government needs to focus on these projects and ensure that they take off at the right pace. Also, big projects need to be announced very quickly so that there is some positive sentiment. From an infrastructure point of view, I think the growth is going to be there. And we do expect 10-15pc growth in the next few years.  We should grow faster than the industry.

Is there any segment in the construction equipment space that needs to be explored by JCB in India?  Can you share your views on that?

When you look at the number of products that we have launched in the last few years i.e. range of excavators, compaction equipment, wheel-loaders, etc, we constantly upgrade to have the best-in-class among our peers. We have also launched the lift-all range. But there is a lot of mechanistaion that needs to be done. There is a product called telehandlers---telescopic handlers which lifts paletised products. It is not only safe, but highly productive.  So that concept needs to come in India.  It is very important that people who look for building houses look for mechanistion. That is a product which we can look at and introduce. Right now, people think that it will replace manual labour which is not the case.

What about your export markets? You had earlier said that JCB has exported in small batches to countries like Indonesia.

If you look at India as a market, we are very aligned with the SAARC nations. So it’s Nepal, Bhutan Bangladesh, Sri Lanka. Out of them, some of the countries like Nepal and Sri Lanka have been affected by the political problems. But the industry is going to pick up there because they too need a lot of infrastructure. So that is our prime focus. We do not intend to export our products in the developed markets because that is looked after by JCB’s UK operations which meet their specifications.

How important are tier II and tier III cities for JCB India?

It is extremely important for us. This is because the growth of the Indian economy will be underpinned not only from the metro cities, but also from tier-II and tier III cities. You will find a lot of highways passing through tier II and tier III cities. So these cities are as indispensable as any metro city for us. If we give them a solution to build the infrastructure quickly on mechanised things, then they are willing to look at it. In the rural markets, you can show them how you can do a fishery or a pond with a backhoe loader without any manual labour. It is going to save a lot of effort. That’s why a non-metro city is important because it is going to give us additional volumes and expand the markets and the applications.

JCB has recently launched an EcoMaxx engine, which the company claims to be a world-class indigenously-developed engine. What are the opportunities that you foresee from this engine?

The very same engine is already there in the UK for the past 5-6 years.  It’s on 140,000 JCB machines globally. So we have a proven engine that we are manufacturing globally with the same technology. Secondly, we have also proved that we have the best engine as we produced the world’s fastest diesel car-Dieselmaxx. So that technology is the same. It’s a BS-III engine which meets the new emission norms. It is the most fuel-efficient engine in construction equipment in India. And it’s got 16 valves in products such as backhoe loaders. So it has more forces. The third point is that it still meets the BS-III norms, but still not turbocharged. So, most BS-III engines are turbocharged. So that’s why our products are fuel-economical.

You have talked about your design centre, can you tell us what it is all about?  Is it contributing to only JCB products in India or your global operations?  And what kind of activities is happening over there?

The design centre is in Pune. And it designs not only for India, but for JCB use worldwide, either partly or fully. So they are a batch of young engineers there and learning and designing things. There are about 60 odd people there. They have all the technology there to design machines or components. The centre, which is having a dedicated team for the said activities, is expanding and will become big one day. The designers are continuously innovating.

How your merchandise business like apparels, shoes, etc, progressing? And how many dealer outlets have you earmarked for this?

If you look at the apparels and other merchandises, we sell only through our dealers. Our business is growing in this vertical because there are a lot of customers who see a display at out outlets and eventually buy it. So that’s a good expanding line of business. As far as safety shoes are concerned, they are managed by a company called Rehman Industries, who are India’s second largest shoe producer and one of the largest in the world. So safety shoes are doing very well in the industry circles.  Our designed-products are manufactured by Rehman Industries.  They will also expand their capacities.

The automotive industry is seeing an increasing number of explorations in the ‘Nano’ segment. So can we expect the same from the construction equipment making industry in India? Can we expect a similar initiative by JCB India?

Right now, I can’t answer this question. Because people upgrade from cycles to motorcycles and then to cars.  I think Tatas were successful because they wanted to offer a better lifestyle to consumers. So they introduced the Nano. People buy tractors for their living because they are farmers. But when it comes to construction equipment, it needs to move things. I don’t know how much cheaper you can make it because if it’s ultra-cheap, you won’t be able to move it. You can’t remove steel from the equipment, which is a basic input. This is because basic products and basic levels have to be incorporated at a certain level to actually have the productivity that is required for the project. Now, if you have to finish a project in a shorter timeframe, and you get cheaper equipment from China, it might break down and may not be able to push the amount of earth that is required. Furthermore, the project may not get timely completion. Here it is absolutely important that the product is right for the project. But you are right. Can we have a more affordable product? Probably at a later stage, but not in a ‘Nano’ style.  You need to have a product which is absolutely able to do the job.