Expanding into new territories
In an exclusive tete-a-tete with
Indian Cement Review
Richard Deng, Managing Director, Sany Heavy Industry, China
, speaks on the company's global positioning as a leader in the concrete machinery domain, the company's R&D initiatives and future plans
India is in the throes of a fast paced development in infrastructure projects. How do you see Sany being a part of this development?
We can definitely see that India is now in the throes of a fast paced development in infrastructure, and we believe the government will continue to increase its spending on infrastructure. With a rise in living standards, people do desire better infrastructure. Sany is very happy to be part of this development. As a global company manufacturing a wide range of engineering and construction equipments, we can provide Indian customers with one-stop solutions. Three years ago we started manufacturing facilities occupying 80 acres, for we believe such investment will allow us to better serve Indian customers and contribute to India's economic growth and infrastructure development.
How has the acquisition of Putzmiester augmented Sany's presence in the concrete machinery space? Are you planning to make any further acquisitions?
The acquisition of Putzmeister is a strategic move made by Sany to upgrade the concrete machinery industry to a new high. The marriage of the two great concrete machinery manufacturers will surely allow us to learn from each other in order to provide customers with better products and service, and this is a blessing for Indian customers too. In future we will not be competitors struggling against each other for customers and market share, but partners joining hands together to service our Indian customers and India's economic development.
In the short term, Sany will not have any further acquisition, but any decision made by Sany is to provide our customers with better products and service. Whatever we do, we do it for customers.
Which are the countries where you have established a presence? What is your strategy to grow your business in countries where you do not have a dominant presence?
Headquartered in China, Sany is the dominant player in the Chinese concrete machinery market. We have also expanded our manufacturing and R&D operations to the US, Germany, Brazil, apart from our 21 overseas sales companies.
The three core competencies of Sany are R&D, manufacturing and service, and Sany has been putting a lot of resources to enhance the three competencies. It is our belief that customers will naturally choose your products if they can get most value from investment in buying your products. That is also why we are going to build multi-functional 6S centres and 4S centres across India to get closer to customers and better meet their needs.
In the next 4-5 years, we are planning to set up another facility with much higher capacity than what we already have. At present, our Chakan concrete equipment plant is already operational and now we will be going in for the crawler crane and excavator manufacturing in the same state-of -the-art facility. We have plans for two more plants in the same location. The construction has yet to start and operations will start in next two years.
Please comment on the R&D initiatives of your company? What is the spend of your company on R&D as a percentage of your overall revenues?
As is mentioned above, R&D is one of the three core competencies of Sany, and Sany has never hesitated in allocating various kinds of resources into R&D. Every year Sany allocates 5 percent to 7 percent of its overall revenues for R&D purpose.
How big is the company's dealer network in India? What kind of sales and support services you offer to your clients?
We are providing sales and support service through our six regional offices, 9 warehouses throughout India and 24X7 days service and parts support to customer. We have also developed a strong network of 34 dealers across India to support our clients efficiently.
Sany is always about strength and swift service with world class facility and impeccable quality. We continually attempt to provide greater efficiency and more extra smile to our customers. Sany is the answer to the ever increasing need for convenient, constructive and cost-effective solution in the world of construction machinery industry.
What are your future plans? Are you planning any brownfield or greenfield expansion in India?
Sany is very optimistic about its development in the Indian market and Sany will evolve together with India, the industry and our customers. Whether we are going to launch brownfield or greenfield projects totally depends on customer's needs, company's growth and our forecast of the market.
How do you view the impact of the recent Indian budget on the construction machinery sector?
After declaration of Union budget 2012-13, we are positive about the growth in construction and infrastructure equipment sector. The actual implementation of the GST model will be important for all. With the government discussing with different states, we hope to see a practical implementation of GST by August. I think this will help a lot for equipment manufacturers as this will reduce taxes on sales of equipment and interstate movements.
The signs for the road construction segment are very promising considering the government's plan to invest Rs.10,000 crore and introduce external commercial borrowings. It has planned 8800 kms of road construction, which will provide more avenues for projects.
Limit for tax-free bonds in infrastructure sector increased to Rs. 600 billion for 2012-13.
Budget is expected to ease financing constraints faced by certain infrastructure segments and improve the investment scenario. The access to viability gap funding for irrigation projects is expected to facilitate private sector participation in the sector.
Please tell us about the Corporate Social Responsibility (CSR) initiatives of the company in India.
We have already taken up CSR activities like arranging blood donation camps, tree planting, and donation of study materials to underprivileged school children. We have also planned to construct a temple for the village near our manufacturing facility.