India's leading private rolling stock manufacturer Titagarh Wagons Ltd (TWL) in recent years has diversified its business operation with its foray into manufacturing passenger coaches (EMUs). Umesh Chowdhary, vice chairman and managing director of TWL speaks to Probal Basak about now company's plan to aggressively bid for metro tenders in consortium with global players. The company is also chalking out its investment plan for its proposed foray into shipbuilding business. Edited excerpts:
The 2012-13 rail budget saw an significant increase in proposed spending on rolling stock.How much of that has translated into order so far for manufacturers? What has been the order-book for Titagarh Wagons in the current year?
The tender amount budgeted was for Rs 33,000 crores including wagons, coaches, locomotives etc. The total budged allocation for purchase of wagons was for 18000 wagons last year at an average price of Rs 25 lakhs per wagon, out of which tender were invited for about 15700 wagons valued at Rs. 2800 Crore only and the first tranche of about half of that has been released by IR sometime in January whereas second tranche is expected in the next month.
Out of the above tendered quantity TWL received 20% of the above order.
You are now making passenger coaches as well. How this venture has benefited TWL?
We are manufacturing Coaches (EMUs) used in the local trains as part of suburban mass rapid transport. In fact TWL has the first mover's advantage in this space and with the recent order secured, is in the process of consolidating its position. The first order received by TWL for manufacture of proto type of EMU was in the year 2007 and since them we have manufactured and supplied 8 rakes to the Indian Railways which has successfully demonstrated its performance. Having done with that we have now received orders for 23 rakes of EMUs/MEMUs and our planning to consolidate this business to get into the metro coaches etc.
How confident you are about this new venture of manufacturing metro coaches?
TWL is keen to get into metro coach manufacturing segment and has stated participating in various metro tenders in consortium with world leaders. Till date we have not secured any metro contracts, but are however aggressively pursuing this opportunity.
International player like Spanish giant Construcciones y Auxiliar de Ferrocarriles (CAF) is planning to set up a manufacturing unit in India to tap the increasing demand of railway vehicles and equipment in the country. Are you worried about competition from big international players?
We have already started setting up of our manufacturing facilities and having demonstrated the efficacy of our product. We are not apprehensive of competition in any manner. While we agree that a lot of international giants are intending to set up facilities in India, it is also true that the opportunity available in the metro coach manufacturing space is significantly large and therefore adequate for various players to coexist.
Are you worried that the railway in recent years has announced its plans to have more of its own wagon and coach units?
We have been focused on pursuing both the organic and inorganic routes of growth and TWL is equipped to take such developments in its stride with its pro-active approach to business. While in planning expansion of capacity may not be the most ideal scenario for either the industry or to the Indian Railways, we believe that the opportunity available in the wagons and coach field particularly in the Freight Corridor etc would be substantial enough for efficient players where the old or new to coexist.
It is now official that TWL is entering the shipbuilding business with your subsidy Titagarh Marine Ltd (TML). Can you elaborate on your investment plan for the same. What is the status of the project?
TML has acquired a shipbuilding company engaged in the business, operating from the ship yards in its possession since a number of years and having requisite license/registration in order to expedite its foray into marine business. Investment would be now required to be made, the details for which are being worked out. The detailed project report would be shared once the necessary corporate approval are taken for the same.