Founded in 1972, Shandong Lingong Construction Machinery Co., Ltd, located in Linyi, China, is a national large-sized backbone enterprise in construction machinery industry and is ranked among the top five wheel loader manufacturers worldwide. SDLG branded products include wheel loaders, earth-moving scraper and excavator series, road machinery series, mining truck series, and small-sized construction machinery series serve the value market.
B. Sridhar, Head, SDLG Business, Volvo India Pvt. Ltd told Sandeep Menezes it will take another six to eight months for the construction equipment market to start growing again.
Excerpts from the interview:
It’s been six months since the new government has taken over the nation’s reign, how do you foresee the construction equipment industry’s performance?
We can’t say that the market has changed completely. But there is positive sentiment because of the many new initiatives that the government is considering. Some of the few projects like in the road sector have already started in some locations.
But whatever the decisions have happened at the ministry level – it has to percolate into the market, this has not happened yet. It will take time because major investments and land acquisitions have to happen.
How long will it take for the construction equipment market to start thriving again?
Our feeling is that it will take another six to eight months for the construction equipment market to start growing again. If most of the stalled projects get kick-started by mid of next year – then it may take another two years but going forward there is only growth ahead.
The government has been pushing with its ‘Make in India’ campaign. Comment.
As of today, we don’t have any plans but going forward if there is a need then definitely we would like to do it. In future if the market grows exponentially, then we have to support that growth – we can’t import everything, therefore we will also have to manufacture here. It all depends on the market growth in future.
Even in importing there are constraints because then we have to depend on vessels and also other issues have to be cleared. Therefore as long as the volumes are less, we will continue to import but if the market grows and volumes pick-up then we will also have to rethink.
Safety during project execution is a big unresolved issue across India. Comment.
If you look at our products, it complies with all the safety norms of India in terms of emissions and safety. We have safety features incorporated in the products because it is a big concern for us.
In our motor graders, we are supplying with FOPS and ROBS cabins so that even if any accidents happen the operators will not get any injury. Also these cabins are air-conditioned which leads to extra comfort for the operators.
The interest rates have not softened to the extent expected and most construction equipments are purchased on financing mode. Comment.
We have financing tie-ups with all the leading NBFCs and banks also. Therefore if the customer profile is good then financing will not be an issue.
As far as interest rates are concerned there is a worry because it is high. But it also depends on growth and machinery requirements. We feel that going ahead the rates will come down.
What do you expect from the new government in terms of support for the construction equipment industry?
We want the government to remain focused and action should happen on the ground.
GST delay is a big issue for all the manufacturers. Today all the manufacturers are suffering because of all the various local laws and rules. With the clear majority that this government enjoys, we feel that GST will be implemented within the next one or two years.
We are facing a shortage of trained equipment operators and technicians nationwide. Comment.
We have our own operator training school in Bangalore. When ever we sell machines, we also train the customers’ workers. Few of our dealers get youth from ITIs and we send our trainers to train them.
Over the next two years, how much growth do you foresee for SDLG in India?
We expect a year-on-year growth of around 20 per cent for SDLG in India.
The main drivers for this market growth will be the upcoming infrastructure projects like the proposed bullet train between Mumbai and Ahmedabad. Once all these projects commence then the ancillary segments will be needed to support the execution of these projects – therefore going forward there will definitely be growth.
SDLG and Volvo CE both operate in India, how does a customer differentiate between the two brands?
We want to bring up both the brands in India. Therefore we will not dilute any brand since our strategy is of dual brand. We will grow both the brands and continue offering products as per the needs of the market.