Having already invested over $1 billion in India, US-based machinery giant Caterpillar is now readying to use both organic and inorganic routes to make it big in the country that offers tremendous opportunity for its future growth. Caterpillar India’s country manager Ramesh Tipimeni talks to Surya Sarathi Ray of The Financial Express on company’s future plans here particularly in the field of mining and infrastructure sectors. Excerpts:
Do you have plans to set up more manufacturing units in India?
Caterpillar’s key manufacturing facilities in Thiruvallur and Hosur manufacture building construction products and industrial power systems respectively. Later this year, Perkins (Caterpillar’s subsidiary) will commence manufacturing its 4,000 series range of engines to cater to electric power customers in the Asia Pacific region in Aurangabad. Commissioning work at the Aurangabad facility is currently underway, and it will employ some 450 people. We are quite bullish on the Indian market. We have been investing in our operations to support the ever-increasing consumer base here. Going forward, we anticipate growth potential in most of the sectors we operate in India, especially in sectors such as mining, and construction, and are in favour of pursuing both organic and inorganic routes. We would like to collaborate with a valuable business partner, not just an equipment supplier.
What would be Caterpillar’s strategy to raise its share in India’s infrastructure and manufacturing industry?
The aggressive plans for infrastructure development in India represent a tremendous opportunity for companies like Caterpillar. We have plans to launch several new products in India, besides introducing innovative customer support initiatives. For example, most recently, Caterpillar’s Financial Products Division and Tata Capital Financial Services Limited (TCFSL), have come together to offer customers finance options for purchasing Cat® equipment and also offer customer friendly schemes.
Companies from China and Japan are constantly trying to sell their dismantled units into India. How would you resist that?
We are aware of these growing challenges, especially in the wake of the slowdown in markets such as China. We are sure that authorities and policy makers would be taking appropriate measures to tackle such situations. We are confident that with our superior quality of products and highly efficient and pro-active customer support initiatives, we will be able to not only overcome such market place hurdles but will also be able to continuously grow in the Indian market.
Technology plays a big role in your scheme of things and India offers low-cost IT workforce. Do you plan to cash in on that opportunity?
Our Engineering Design Centre (EDC) located in Chennai, with its highly competent team of engineers, plays a pivotal role in the company’s overall product/technology innovations initiatives. EDC partners with businesses across the globe and provides comprehensive product development and associated engineering services (design, virtual validation & virtual manufacturing).
What kind of support do you require to make it bigger in India?
We are positive about growth in India especially with the government taking many concrete steps and initiatives towards building the nation’s infrastructure and providing better connectivity of roads, highway, ports etc. We are happy with the “Make in India” campaign launched by PM Modi and view it as an important step to showcase the exceptional talent and capabilities of a country as rich and diverse as India.Infrastructure development should be free of concerns such as land acquisition especially at the state level, clearance-related delays after changes in tendering and scope, and difficulties in achieving financial closure. Timely and fair settlement of these concerns is essential to maintain progress.