Established in 1979, ElectroMech is one of the largest EOT cranes manufacturers in India commanding highest market share and recording 50 per cent average annual growth. They offer precise solutions for wide-ranging applications in manufacturing plants and infrastructure projects through a complete range of hoists and cranes.
Tushar Mehendale, Managing Director, ElectroMech Material Handling Systems Pvt. Ltd., narrates the growth story of materials handling equipment sector in India and market outlook, the factors affecting his company’s growth and production facilities to Renu Rajaram.
Excerpts from the interview:
With vast experience in the Indian materials handling equipment industry, could you please narrate the sector’s growth story and market outlook for the next five years?
In the Indian MHE industry the industrial cranes segment is highly fragmented. According to our estimates, the industrial cranes market in India is approximately to the tune of Rs. 1500 – Rs. 1800 crores per annum. This market size has slightly shrunk in the past couple of years due to the slowdown in the Indian economy. Approximately 30 per cent of the cranes are required by government-owned companies and the remaining 70 percent comprises the requirement from private sector. Region wise distribution in terms of quantities shows that Western India contributes 50-55 per cent of the total requirement, while Southern India follows with 20-25 per cent, Northern India with 15-20 per cent, and Eastern India with 5-10 per cent. Roughly 40 per cent of the total crane industry in India is dominated by the top 10 manufacturers in the organized sector. The remaining market shares comprises of more than 300 small crane companies.
The next 5 years should see the industry return to its Rs 2500 crore market size and 15 – 20 per cent YOY growth rate. Of course, this is subject to a stable, growth oriented government at the Centre that can focus on infrastructure development and establishing India as a manufacturing powerhouse. We are already seeing signs of a turn-around in the economy and are bullish about this stream of recovery to turn into a torrent of growth.
What are your views on the present economic climate in the country and its impact on Material Handling equipment business?
The last three years have been quite interesting for the Indian industry. On account of the infamous “policy paralysis” the growth of the capital goods industry was affected. The last 2 years were particularly painful in terms of new business. Luckily for us at ElectroMech not only have we managed to maintain our top line but have also improved our bottom lines on account investments in revamping the processes and making operations more leaner.
What is the capacity of your existing plant at Pune?
Our plant at Pirangut, near Pune is spread over 20 acres of land and has a manufacturing area of 23,000 sq. m. We have implemented a piece flow process within our plant that enables us to have a capacity to manufacture easily in excess of 1,500 cranes. This year we will be manufacturing in
excess of 700 cranes and thus can claim to be the largest manufacturer of cranes in terms of volumes. Our semi-automated stacker crane system in the stores enables us to store all components in a systematic palletized manner and enables quick retrieval. The plant is equipped with state of the art CNC Plasma cutting machines with an innovative vertical plate storage system that enables fast and precise cutting of steel used in fabrication of the cranes. We have semi automated welding systems that ensure a consistent and top class welding quality. We can also boast of one of the largest paint booth in the industry having a length of 50m and a width of 8m. This is a down draft type paint booth that allows us to paint multiple crane components at the same time. Our dispatch area is also unique and is serviced by a giant 42m span single girder gantry crane with a SWL of 20t that speeds up the dispatch process.
Tell us briefly about your company’s growth in the country and abroad?
ElectroMech has partnered with Stahl for their explosion protected range of products used in hazardous industries like refineries, chemical, etc. The manufacturing plant in Pune is one of the largest crane manufacturing facilities in India confirming to international standards of manufacturing and quality assurance. With an equipment base in more than 17 countries and a subsidiary company in Dubai, the company is steadily marching towards becoming a global brand of repute.
What would you say will be the critical factors for success for leading players like ElectroMech in the coming days?
The immediate future will certainly be interesting for the industry and will come with its unique set of challenges. The pent up demand coupled with clearances on thousands of crores of stalled projects will mean that we could see a sudden surge in demand for capital equipment as well as construction equipment. Maintaining ones quality standards while catering to this volume and at the same time innovating to offer customers the best solutions will be a key factor to success in the coming days. Retaining talent is another factor that will ensure a smooth transition into the growth phase that the coming years should bring.
Availability of spares and service would form the backbone of a successful partnership. What are the initiatives that ElectroMech has taken on this front?
There has traditionally been a large gap in service in the industrial cranes market in India. Service & maintenance was handled in house or in an informal manner with the OEMs from whom equipment was purchased. To bridge this lacuna, ElectroMech established Cranedge, the first Indian Company dedicated to offering professional services for any make of Industrial & Tower Crane. It is a one stop shop for Complete Crane Maintenance Services for Industrial & Workshop Cranes, Conventional Power Plant Cranes, Nuclear Power Plant Cranes, Metallurgical Process Cranes Explosion Proof Cranes and Tower Cranes.
Cranedge have access to the rich knowledge of ElectroMech who, with over 30 years of experience, is the largest EOT Crane manufacturer in India. Cranedge has one of the largest in house facilities dedicated for any kind of repair or modification job. Our background in crane manufacturing along with ElectroMech’s design backing ensures any work is carried out with the finest attention to detail with a finish that one would expect from a leading manufacturer.
Cranedge’s host of services cover: It provides lifecycle services for crane, which include, crane health assessments, annual maintenance contracts and other stand alone services such as certifications, load testing, commissioning & relocations. It also provides services that help customers get more out of their existing equipment, which include modernizations, overhauling, repairs and capacity enhancements. Cranedge provide spares and performance accessories. It is also in a position to develop specialized parts or spares and help customers with their spares inventory planning. It caters for consultative services such as operator trainings, crane performance audits & analysis and crane Kaizen.
Many international construction equipment manufacturers have set up shop in India, which they plan to use, or are using, for exports to neighboring countries. How well equipped are you to take on this challenge? Are you also exporting to nearby nations, or are planning on doing so?
International players entering the Indian market bodes well for the Indian economy as well as the industry. Competition ensures that customers have the choice get the best possible products and services to suit their requirements. This encourages Indian manufacturers to upgrade their product range to match international standards.
As far as the exports market go, we have installed cranes in over 17 countries and our export base continues to grow. Our subsidiary ElectroMech FZE in Dubai handles sales and service for the Middle Eastern and North African markets.
Any new technologies / innovations that you will be launching in the near future?
At ElectroMech, we are constantly upgrading our existing product range and working on bringing new solutions to the market to cater to our clients’ requirements. We will be launching two new products in the coming financial year.
Considering that the potential crane market in India is worth Rs 2,500 crore, the country lags in setting safety norms for manufacturing such equipment’s. What is your take on this?
It is true that India lags behind when it comes to setting of safety norms for manufacturing of cranes as well as safe operation of cranes. As far as safety in construction equipment is concerned, it is the responsibility of the manufacturer as well as the user to ensure all guidelines are being strictly followed. Any kind of carelessness while handling material can prove to be fatal. Moving goods against the gravitational force is a calculated science and hence safety is of prime importance. As the owners of an organization we should ensure that our employees are well informed about the basics of safety in the workplace. As a safety precaution, long and short term storage should be considered while planning the factory layout to reduce hazards and to facilitate proper placement and removal of materials. The management of any organization should look in to the matter and keep a close watch on how the materials are being handled. However the employees need to co operate with the management so that whatever is planned is also followed. Proper material handling training can significantly help reduce the amount of injuries and accidents in the industrial workplace.
Helping our clients with safety should be our first priority. Appointment of safety officers by the management and audit of safety in equipment and work place practices plus a clearly enunciated checklist of internal procedures at a construction site will certainly help maintain the lowest accident rates in the industry. It is a good indicator that international companies in building and construction are now forcing Indian companies to upgrade their safety norms and procedures.
In my opinion, safety is also a matter of education. It is trying to change people’s mind sets towards customary procedures which are no longer recommended and have become obsolete. It is high time that a safety manual is made part of the decision-making criteria.