THIS YEAR OUR TARGET IS TO LAUNCH OUR FIRST TUNNEL BORING MACHINE

THIS YEAR OUR TARGET IS TO LAUNCH OUR FIRST TUNNEL BORING MACHINE

Rajeev Kumar, CEO, Friends Equipment.
We have plans to expand and diversify into various products because we want to multiply our turnover enhancing our product basket and service support. This year our target is to launch the TBM as a project like Mumbai Metro along require around 15-20 TBS, says Rajeev Kumar, CEO, Friends Equipment. Excerpts from the interview…

What are the growth prospects for the equipment that you deal with?
We are involved in the sales and service of construction equipment and spare parts from for leading Chinese equipment manufacturers; – Zoomlion for truck-mounted cranes and crawler cranes, and Sichuan Construction Equipment for big capacity tower cranes. Recently we have joined hands with China Railway Group for tunnel boring machines (TBMs). All the companies we deal with are leading players in China. As per growth potential is concerned, the demand for truck cranes was good the last year and we have supplied around 150 Zoomlion tyre-mounted cranes, during this period, especially models of 75T and 110T. We have also sold some big capacity range like 150T. The demand for tower cranes is also gone up and we have received good orders in the last recent three months. The machines are on their way for erection.

For TBM business it is just the beginning for us. We are in discussions with a few companies and we expect few contracts. We are also looking at Mumbai metro project as the project may need at least 15-20 TBMs to cover this project.

Who are your major customers?
Our major customer was Reliance as we supplied 124 machines to them, which are working well and we are also providing after-sales service to them. So without any breakdown these machines are being used by Reliance for the last one year. The availability of the machines is 99.9 per cent. We can say that the quality of Zoomlion range is really good. We also have other customers such as Gannon Dunkerley, Ideal Movers, Essar, etc.

How do you assess the opportunities for demand growth?
Actually the demand has decreased in the last two years due to the recession. We hope things will improve for which some big ticket projects need to take off. Projects like Mumbai metro, corridor projects, which are in the pipeline are likely to drive demand for more equipment in future.

There is a demand for crawler cranes also, but this year demand was down because tyre mounted cranes showed more demand in the market. We supplied some crawler cranes also in 55T, 75T, 150T, etc, though not in good numbers.

Is your business geography-specific?
We operate all over India and provide after-sales service through our service engineers placed all over the country. We supply spare parts through our ware houses in Mumbai, Jamnagar, and Delhi. We provide after-sales service within 24 hrs from the call. We have really improved our services in the last two years. In the beginning, it was 56 hrs, which reduced to 48 hrs and now 24 hrs.

We have received award from Zoomlion for our contribution to the industry. This is because of our quality after sales service.

How receptive are your customers towards advanced features in equipment vis-a-vis cost?
The customer is now more conscious on new technologies and safety features. They are now looking for more quality products from Chinese companies as more than 80 per cent customers in India use Chinese equipment. The Chinese OEMs have realised this and have started providing good quality products at competitive price. The rental rate is very low in India, so it will be very difficult for a company to buy costly machines and rent out which will take a long period for him on RoI.

What are the financing options that you provide for your customers?
Major financiers finance to our equipment as we provide equipment from leading players. We are also discussing with our OEMs to provide leasing so that we can provide the machines on lease. But we need to take different permissions and we are verifying the viability. May be in a year we will be having the leasing option in place.

What are your future plans?
We have plans to expand and diversify into various products because we want to multiply our turnover capacity by providing good products and services. This year our target is to launch the TBM.

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