How has your organization performed in the last three years?
Kennametal India has been on a growth trajectory for the last three years with strong performance in both revenue and EBT, registering a CAGR of 12.3% in sales and 9.27% PBT. As we all know, the last three years saw probably the worst economic turmoil ever, starting with Covid, then moving on to global supply chain constraints, heightening of geopolitical tensions. While there is a recovery in the horizon, we continue to face commodity inflation and other challenges. Despite these, we have managed to sustain our growth by focusing on strategic imperatives, while focusing on sustainability, people culture and values.
How is the market for tooling for the construction and mining industry shaping up in India?
The overall tooling industry is expected to growth at a CAGR of 9%-12% over the next five years. The last few years have seen India adopting mechanization in a big way to increase efficient and safety while reducing overall operational costs. This has led to the deployment of modern equipment that enable autonomous processes, accelerate cutting speeds and deliver accuracy. The tools being at the front end of these operations, customers are demanding high-quality, high-performance tools to ensure minimum downtime. They also require availability and technical support and where suppliers are expected to understand customer needs and offer value-based solutions accordingly. They see tooling companies as long-term productivity partners as the association with them is shifting from transactional procurement to performance contracts.
Can you take us through your product profile for the construction and mining industry?
Kennametal India’s Infrastructure business portfolio is broadly categorized into engineered wear components, surface technology and powders/advanced materials. Talking about the construction and mining industry in particular, we offer a range of innovative foundation drilling, road rehabilitation, mining, and wear protection solutions to customers. These solutions find a plethora of applications that are helping customers improve productivity and performance to support the nation’s ambitious infrastructure growth. For construction applications including foundation drilling and tooling and wear protection solutions for road planers, our team works closely with customers to suggest systems needed to help them get their job done more efficiently with less downtime and avoid costly repairs. These include tool cutters, tool holders and pullers, etc. Kennametal mining tools and products such as mining drill bits, drums, blocks, and picks stay wear resistant and get the job done in the toughest applications in underground and surface mining. Providing consistency, versatility, and wear resistance, Kennametal Carbide Wear Parts meet the challenges of the most demanding environments.
What are the after-sales services you offer to your clients?
Kennametal extends robust after-sales services to our customers. Our team is equipped to advise them on the best solutions for their most challenging applications - from tool recommendations to feeds and speeds, and also cater to any customizations required to help them achieve their productivity and efficiency goals. Our teams offer on-site trainings as well as support to ensure customers understand how to position tools correctly and are aware of the best practices for using tools.
R&D is a continuous process. What are the R&D activities taking place at your end to come up with next gen products?
As we constantly innovate, ideas transform into solutions. Customer needs are dynamic, and we align our offerings accordingly. Some innovations in the foundation drilling category include our premium 38/30-mm shank series conical tools and concomitant holders for hydraulic rigs and wall cutters, as well as the KF Series quick change flat cutters, weld on teeth and flat teeth with TC buttons, etc, which are known for maximizing productivity and boosting overall performance. In the road rehabilitation category, Kennametal recently launched Next Gen Road King® tool series that provides superior milling machine performance. Its new design elements maximize tool life and make tooth changes easy and efficient for operators.
Being an international player, what are the global best practices you would like to see its implementation in India?
As industry best practices continue to evolve in 2023 and beyond, companies need to uphold ‘Safety’ as their top priority. Through automation, robust SOPs, PPEs and tools, there should be constant efforts to identify hazards and minimize safety incidents. Secondly, the advent of modernization in the mining and construction space should encourage international players to deploy disruptive technologies proven elsewhere in the world. Here, Kennametal leverages its manufacturing facilities across the globe, backed by the subject matter expertise of its people. This synergy has enabled us to deploy several first-of-its-kind solutions in India. For example, one of conical tool variants, KSM18TP improved performance by 20% for a construction customer working on an airport development project in India, by enabling the reduction of the number of tools used in every machine. We have long term relationship with several OEMs where our India team in collaboration with Global Product Managers, continue to partner with our customers to enhance their productivity.We also need to strengthen our global supply chain and ecosystem to drive sustainable practices in India, especially in the area of recycling. For example, globally 90% of Kennametal’s End-of-life sintered carbide products and hard scrap carbide, on average, consist of tungsten carbide, which is infinitely recyclable and in FY22, 51% of the material used in feed plant production was recycled. It goes without saying that all of the above can be realized only through the skill and innovation mindset of our people, an area where we bring in best industry practices to build a high performing, diverse and inclusive team.
Which are the sectors that will drive maximum revenue for your organization in 2023-24?
Kennametal India derives its growth from diverse sectors. Not limited to mining and infrastructure, Kennametal has a strong presence across transportation, aerospace, energy and general engineering. In FY23, India achieved a 7.2% GDP growth, driven by the Government’s push on infrastructure development, increase in CAPEX, resilience in consumer sentiments and a boost to ‘Atmanirbhar Bharat’ (self-reliant economy) through PLI (Production Linked Incentives) schemes. The current fiscal also reflects a similar growth momentum in all the sectors we operate in. With focus on our strategic initiatives, we are well poised to benefit from these trends to achieve growth, though uncertainties continue to exist.
