..says Rohit Grover, Managing Director, JREW Group. Started as a small company from Chandigarh in 1973, JREW has grown today into Rs 150-crore company having facilities at 4 strategic locations including one at NCR. During his tenure of more than 15 years, he has played a pivotal role in changing the growth graph of the company to newer heights. In conversation with IPF, Rohit Grover analyses the construction equipment market and performance of his company.

 

Kindly take us through the journey of JREW. Which are the key end-user industries that are driving the demand for your products?

JREW Engineering has started its operations way back in 1973 from a small factory in Chandigarh with only 8 people and a few machines for bright bar manufacturing. With the professional & ethical working, it soon attracted some new customers from the region and entered into fabricated and machined components for earth moving machines, material handling equipment, agricultural implements and railway parts. Now, JREW takes pride for exporting various precision components to multinational companies in developed countries of Europe and South America for the last almost seven years with zero PPM and zero delivery failure. Recently, we developed some highly engineered attachments for construction and mining equipment industry.

 

How has been the performance of your company in 2016-17 and what are your expectations for 2017-18?

Despite demonetisation in 2016, we have grown around 22% in 2016-17 as Government’s focus on building roads and infrastructure is on the rise. Apart from the growth in our existing business, we have also developed some new attachments for the industry that has also added to our top line. In the year 2017-18, we are expecting a further top line growth of around 20% that is if not very good, but satisfactory in the present circumstances.

 

Road development in the country helped the sales of earthmoving and road equipment manufacturers in 2016. How did your company benefited from this?

As our company manufactures and supplies engineering components for earth moving machines and construction equipments, we have been benefitted from the road development happened in the country during the year 2016. We are manufacturing front axles for JCB, Caterpillar, Volvo, Terex, Escorts and Leeboy etc.

 

How was the demand for original construction equipment parts in 2016 from the manufacturers as compared to previous 3 years?

The overall Indian market for original construction equipment parts has grown up more than 30-35% compared to previous 3 years. 

 

Being an original equipment manufacturer, what are the new trends have you witnessed in the construction equipment industry?

Being in the construction equipment industry, we have witnessed that new products have been developed by various construction equipment manufacturers for Indian market like tele handlers and skid steer loaders. Earlier products that are already present in the market are backhoe loader, wheel loader, tracked excavators, etc of various capacities. But industry felt that there is saturation for these products and developed new products for sustainable growth.

 

How the installation of technologies in construction equipment is playing a role in increasing productivity at the job sites? 

For road building experience at the job sites, these new technologies and products are playing a vital role to speed up the work along with increase in the profitability. Market leaders in construction equipment market have also introduced a live-link in their machines to track the running hours and place of working using new technology like geo-tagging and other IoT (Internet 

of Things).

 

Do you think the demand for advanced and eco-friendly machinery will cast away conventional equipment in coming years?

With the new advanced and eco-friendly technologies, conventional equipment will be less in demand in the coming years and new technologies would steadily replace the old technologies.

 

In October 2017, the Government announced a number of road connectivity projects at an estimated cost of Rs 7 lakh crore. Will this give a boost in demand for construction equipment (CE) industry?

Certainly, we are having high hopes to increase in the demand for our products in the coming few months and years as the government has prioritized the road connectivity projects. But announced funds of Rs 7 lakh crore would be first divided into various segments of infrastructure sector and when the money would be released by awarding the contracts to the implementing partners, only then the real spurt of growth will come in the construction equipment industry.

 

CE makers are developing advanced, modern equipment. Against this background, how will suppliers like you help CE makers in this goal?

The total focus of the CE makers is on total cost of ownership (TCO) for the customers that includes the buying cost, spare parts cost & delivery, dealership and service network and resale price of the equipment. One of the leading CE maker has put up geo-tagging in its equipment so that one can know the exact status of the location of the equipment. These kinds of advanced features were earlier available in auto industry only, but now other customers are also getting aware of these kinds of new technologies coming in the market. They are ready to pay a little extra for the higher quality products that deliver uninterrupted performance.

 

Is GST having a positive (or negative) impact on your industry?

As far as our industry is concerned, there is hardly any impact because of GST except some teething problems that were supposed to be faced by all the industry in the initial stage. But, in the long run, when we will acclimatise with the entire system of GST, it will definitely benefit the country as a whole in its economic development.

 

Automotive industry is witnessing changes in emission norms. How are auto component manufacturers helping OEMs to face 

these changes?

Climate change is something we all are aware of and in the last few days, we have seen some examples of its impact on human life in Delhi because of smog. The industry as a whole is committed to stand and follow stringent emission norms and help the government and society on this front. Auto component manufacturers are helping OEMs to design more sustainable products that can reduce carbon emissions for the future vehicles and a lot of efforts are also put up into this direction.

 

According to your experience, in recent time, what the end-users are expecting from construction equipment manufacturers? 

In the recent time, customer’s expectation in terms of quality and reliability of construction equipment has increased substantially. Apart from these, customers also expect smart aesthetics from these machines.

 

How will be 2017 in terms of growth of construction equipment industry?

In 2017, we are expecting at growth of 20-25% in the construction equipment industry.

 

What is your growth plans for JREW in near future?

The growth plan in near future is to put up a dedicated manufacturing line for CE attachments in our Faridabad unit (that consists of a plasma cutting machine, press brake for bending, robotic welding stations) followed by a state-of-the-art paint shop with eleven tank solution. Apart from this, we are also planning to install some more CNC machining centers and horizontal boring machines to ramp up the machining capacity because of the positive forecasts from our customers in Germany. We are also exploring a few new customers in European market and talks are already on with some of them for a future strategic partnership for technology transfers etc.