Deepak Garg is clearly excited about the road ahead for the construction equipment industry.
As MD, Sany India & South Asia, he is now anticipating good growth which explains why the stage is now set for his company to expand capacity.
Over the next 15 months the company plans to expand capacity by two-and-a-half folds with an investment of INR 500 crore, which will be managed through internal accruals. Two sheds with a total of 12.05 acre in size will come up in the 80-acre plot in Chakan near Pune, where the company’s factory currently churns out 9,000 pieces of heavy equipment annually. This expansion project will take the total capacity to over 25,000 units per year.
So far, the company has invested INR 750 crore in the Chakan facility to set up about four sheds with a cumulative space of 13.1 acres.
“We will have three more factories which will be twice as large as the existing one at Chakan. This will call for an investment of INR 3,000 to INR 4,000 crore over a period of ten years,” Garg told Mobility Outlook in a recent interview.
Therefore, in ten years, the cumulative capacity will be close a lakh of units. (25k from the existing plant and 75k from the proposed three plants).
With the Centre focusing on quick completion of infrastructure projects, Garg said the need of the hour is innovative products with faster turnaround capabilities. Across the landscape, there are a host of projects underway like metros in all major cities for instance.
These will have a cascading effect in terms of demand for power generation and doubling annual cement production to 140 million tonnes in the next five years. Steel plants will also see expansions thanks to growth in highways, railways, ports and real estate. All this puts in context why Sany is preparing the base for its next round of growth.
Existing Product Range
The company offers products in four segments — excavators, heavy equipment, mining machinery and road & port machinery — accounting for over 40 products and 150 variants. Garg said Sany has “good capabilities” to localise in a shorter time frame. “From start to prototyping and commercialising the local product, we can do it within six months,” he added.
This is possible with the group’s focus on performance and timelines which, in turn, draws its competencies from the huge R&D setup at headquarters in Beijing, China. Consequently, new products customised to the Indian market with components sourced locally can actually be launched in just three months. “They give us two prototypes, we conduct trials quickly and it is localised,” said Garg.
Electrification of products is also happening and some which were recently launched in the material handling segment come with electric options. “These are being promoted gradually. With electrification for the automotive sector already underway, we are trying to promote this or our higher-end industrial equipment,” he elaborated. The group is also working on hydrogen technology and has some prototypes for fuel cell technology.
New Opportunities
Sany has prioritised mining as a focal area since its competencies are in sync with the needs of the entire value chain. It makes large excavators and dump trucks right now with plans to launch a slew of new products in a year. This will help customers seeking one-stop solutions.
Sany will also introduce new product lines in the road machinery from September. Plans are also on to begin manufacture of wind turbines this year. As Garg said, the group is an integrated player right from making wind turbines to power generation, including commissioning and installation. “Sany is an end-to-end player in the renewable energy segment,” he added.
In the case of India, it will confine itself to wind turbines in the range of 2.5 MW to 3.4 MW and the first supplies will kick off to a client in December. “Perhaps, a year down the line, we could look at making solar power products in India,” said Garg.
Exports
Sany also uses its base here to export fully built-up units to Africa, Southeast Asia and, more recently, the US for which it is developing eight more products. “Sany America will also look at India for some components and once we expand operations, we can meet this requirement,” he said.
The group has come a long way here since the time it began with just four motor graders in 2002. Investments in manufacturing followed in 2006 and the plant became operational in 2009. Beyond end-to-end solutions, after-sales service is another important area of focus where it has introduced customer retention initiatives like the enterprise control centre (ECC) and full maintenance contract (FMC).
ECC is a multilingual call centre set up at the factory and manned by its own staff to ensure that the mean time before call and services are kept at the minimum level. The idea is to help customers enhance machine availability. FMC helps the company offer a comprehensive service offering and higher productivity.
Sany has set up a flexible assembly line to make equipment of different kinds and sizes in order to manage market volatility and cater to specific needs. It has also created dedicated business units to support customers across different segments.
Nearly 1.2 MW is generated through solar power and Garg said the goal is to use 90% renewable energy. As part of the sustainability efforts, 98% of every piece of equipment made is recyclable while the equipment is compatible with biodiesel.
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