JCB India to rev up world's biggest backhoe loader outfit by mid-2009

Written by M Sarita Varma | Thiruvananthapuram | Updated: Feb 19 2009, 07:03am hrs
World's largest backhoe loader production facility will get going in India by mid-2009. JCB India, is going hammer and tongs on this ambitious capacity expansion at Ballabgarh facility in Haryana with eyes on the infrastructure needs of India's $492-billion Eleventh plan.

"We are also looking at the South East Asia market, where we have a presence through excavator, competing neck and neck with Japanese equipment-makers," Vipin Sondhi, MD and CEO, JCB India said.

The company, which set off on its manufacting foray in India with its plant at Ballabgarh in Haryana,has pumped in about Rs 130 crore in 2006 to set up two new plants in Pune.

In its flagship product backhoe loader JCB already enjoys 75% market share. The production will be upsized from 50 a day to 100 a day by the second quarter this calendar year.

Not that the worldwide demand slowdown has not bruised the Indian arm of UK-based construction equipment manufacturer, "There could be about 15-17% dip in sales turnover between 2008 and 2009, but the phenomenon cannot persist through the next four to five years," says Sondhi.

Equipment sales of JCB India shot up from 10,860 in 2006 to 17,192 in 2007. But it plummetted to 13,470 in 2008. From Rs 3,450 crore, turnvoer fell to about Rs 3,000 crore in 2008.

Sondhi says that the slowdown started pinching when the price of cement, steel and bitumen had sneaked up by 30-50% and contracters had second thoughts about big projects. "For us, this is a time to think of better business efficiencies. For example the cost of transportation of machines have been a big chunk of our overall costs and we needed to trim it someway." he said, explaining the stress on after-sales-service-oriented dealer networks.

Kerala has the largest branch network among all State-wise dealers.

"There was an 85% surge in volumes in 2007 in Kerala, which we expect to recoup in the coming years," said George Vinci Thomas, MD, India Techs, which has undertaken the JCB dealership in Kerala, Because of the State's thrust on Inland Waterway development in the Eleventh Plan, JCB India counts on making it a viable excavator market.