Unlike its peers in the market Caterpillar provides end to end solutions which in turn ensures that productivity increases and projects get completed on time says Vivekanand Vanmeeganathan, Managing Director, Caterpillar India.
Caterpillar on Make in India
The event allows us to predominantly manifest the message among industry stakeholders that Caterpillar has been making in India for a long period of time and we look forward to continue the trend. We believe that the market opportunities are huge and the potential for growth is significant. We just wanted to showcase how serious Caterpillar has been in this market in the past, at present, and how serious we will be in the future. Make in India is a good way to showcase it. By partaking in the Make in India event Caterpillar has reinforced its commitment to the nation.
Make in India has been envisaged to drive the industrial growth in various states, any industrial growth in any part of the state will drive one thing for sure – it will increase the income of the individual which will eventually drive lot more urbanisation. And when you say urbanisation, urbanisation will drive infrastructure, infrastructure will drive power and power will drive mining. Considering the fact that Caterpillar operates in the resource, construction, energy and transportation industries,any state attracting investment directly will indirectly provide an opportunity for us.
The Construction Sector in India and Future Challenges
I think predominantly the concerns have not been very specifically with the manufacturer, it’s more to do with the industry. And everybody had more or less similar concerns. The concerns primarily pertained to environmental clearances for mining and land acquisition for building roads and other projects. I think the issues pertaining to mining clearances have been resolved and it is evident from the fact that new mining blocks have been allocated. This move has been facilitated by the fact that the government has aspirational plans about doubling the coal output and we are seeing the demand translate into numbers. On the construction side there is still some work to be done.
What happened in the last couple of quarters was that the stalled projects were given some extra thrust and this led to a boost in the demand. We do not necessarily have to talk about thousands of kilometres of road when we have thousands of kilometres of road which is stuck. That means the funding is present, the government is committed to it, but India is not progressing at the rate that we should be. The current focus of the government is in the right direction; so once the revival of the stalled projects happens in full swing, there will be a good amount of sustained demand that will be created. Needleless to say that we will continue to have more opportunities to build roads because India definitely lacks infrastructure. The rate at which India is growing, that is 7.5 to 8 percent – there will be a huge gap in the demand and supply.Exponential needs will rise and we need to increase the pace at which we are executing the projects.
The Necessity of Skill Development and Skill India
Skill Development has been an integral part of our entire operations as we make a complex product. It is not a general purpose product; you can’t have people with generic skill building these products. So we have been investing a lot not just on the employees but also our dealers and suppliers to train them effectively. In fact some of our suppliers have clearly told us that the quantum of skills we have given them has positioned them as global suppliers.
There has been a great deal of skill development that has happened from the time we have been present in India.Requirement of precise training from the product perspective was an utmost necessity. We have been doing it for a long period of time now and the thrust on Skill India has given us new momentum. Caterpillar designs highly complex and productive machines. The machine will perform to an optimal level and perform the tasks that are required to be performed only when it is operated by a skilled person.
It is not possible to skill everybody given the population we have and hence we need an initiative like Skill India to generate necessary traction. If traction continues to stay the way it is which I believe it will, we will definitely get skilling done more aggressively than we had done in the past. Apart from precise investments, the success of this initiative lies in the fact that with the right skills, people can operate the machine in a way that it attains the functional efficiency.
The government is aspiring to double the production of coal or doubling the pace at which the roads are getting constructed. A part of it implies adding more equipment or going for a different technology. Significant amount of this exercise depends on skilling of people and I would say Skill India is definitely going to make a big difference to the pace of projects subject to the fact that all the roadblocks are removed.
Corporate Social Responsibility Initiatives by Caterpillar
We have a MoU for building skills with the government; we have signed the agreement with Government of Rajasthan to start with. We want to align our CSR activities with the priorities of the government, this enables us to develop a remarkable amount of synergy and likewise we see a significant amount of progress. We are also looking closely at the Clean India project or the Swachh Bharat Abhiyaan, since our products are predominantly positioned to serve these initiatives. We would look forward to actively participate in ‘NamamiGange’ the integrated Ganga conservation mission.
Clean India has emphasised on the fact that waste management is necessary to have a cleaner and greener nation. And come to think of it, the waste management sector in India is locked in the stage of infancy, it’s not organised, it might be an overstatement but I think only a fraction of the process is organised. If you look at the developed nations, the Europe or the Americas, waste management is a much more organised sector. When that happens you will get sanitation in-built into the part of the process, a totally different market comes into play which until now never existed. I think we have a product portfolio to really support that and currently we are really doing what we can do on the CSR front from our standpoint to support this initiative.
On Advantage Caterpillar and the Advanced Components and Systems Division (ACSD)
Unlike our peers in the market we provide end to end solutions and this ensures that productivity increases and projects get completed on time.All the machines that you can possibly put to operation in a project at the stage of inception or in an ongoing project are available under one single umbrella; this is perhaps our greatest exclusivity.
Caterpillar’s ACSD Operations facility in Hosur is home for Small Drive train (SDT) Transmissions that has a wide range of applications. The operation started off with a handful of employees and grew exponentially attracting more business each year since its inception in 2010. The assembly facility has state of the art equipment and practices and lean manufacturing principles. Current market segments that this operation serves are backhoe loaders, wheel loaders, telehandlers and site dumpers.
The facility exports nearly 90% of what it makes to Caterpillar locations and to OEMs around the world and is a model of the “Make in India” initiative.The product group has in its line up power shuttle and power shift transmission families and can support variety of other applications as well – rail service vehicles, motor graders, front end wheel loaders, airport service vehicles & baggage handlers, mining service vehicles, industrial augers, rough terrain forklifts, telescopic handlers, to name only a few.
With talented and efficient design & manufacturing skill set based in India and also supported by Centres of Excellence around the world, the operation boasts of positioning itself well to produce quality transmissions at a competitive cost.
Role of the Government
We primarily work with the contractors who have been appointed by the government. Having said that,on the basis of the day to day communication that needs ensues between us and the government;I would say that the government has been extremely responsible and proactive.
Specialised Solution for Roads and Highways
At one point in time we were building 2 kms a day and the aspiration was to get 20 kms a day, nobody thought it was possible and now we are thinking about 16 kms a day and we have an aspiration to reset it to 30 kms and it is not going to stay at 30 kms, it will be reset to 50kms. One thing we have to understand is that we can’t use a general purpose machine for everything, we need to go for specialised solutions and from that point of view Caterpillar has got a product portfolio to give specialised solutions, which can increase productivity and speed up the process; this will eventually open up some new opportunities. It is a question of time and as of now everyone is using a general purpose machine but it will have to change because there is a point beyond which you cannot use a general
purpose machine.
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