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None can match Asia: Kevin Thieneman

Interview with Country manager for China, India and Southeast Asia, Caterpillar India

T E Narasimhan 

Despite the slowdown, construction and mining equipment major Caterpillar is bullish on India. After launching a backhoe-loader manufacturing facility in Tamil Nadu in April, the company is planning to invest $150 million (Rs 800 crore) for setting up a manufacturing plant for Perkins engines. Kevin Thieneman, Caterpillar's country manager for China, India and Southeast Asian nations, says, in an interview with T E Narasimhan, these engines are manufactured only in the UK so far. According to him, Caterpillar India continues to look for additional ways to invest in India. Edited excerpts

Giving the current slowdown in India, how bullish is Caterpillar about the country?
The GDP (gross domestic product) growth slowdown is a matter of concern to Caterpillar. However, we are bullish on long-term prospects for the mining and infrastructure industries. While both sectors have traditionally been controlled by state-owned enterprises, increased emphasis on private participation is opening up more opportunities for both domestic and international players. Opening up of these sectors certainly indicates acceptance of global standards and best practices which are bound to present great opportunities to foreign players like us.

Any government action or policy required to boost the sentiment?
Public financing should continue to comprise the bulk of infrastructure investment and much more is required to improve the situation in infrastructure space through reforms. Despite several plans to introduce single window clearance mechanisms, there have been little visible improvements. A holistic reform of the power sector is imperative to put the power sector on a strong growth path. Today, the increasing power deficit is impairing the efficiency of manufacturing operations and reducing their global competitiveness.

In 2011, Caterpillar announced $210 million investment plan for India including setting up an engine manufacturing facility for electric power gen sets. What is the current progress?

No other region of the world can match the growth opportunities that Asia presents for Caterpillar and its dealers. In particular, the aggressive plans for infrastructure development in India represent a tremendous opportunity to serve existing and new customers. In April, Caterpillar launched the company’s new backhoe loader manufacturing facility in Thiruvallur near Chennai. Caterpillar has decided to invest $150 million in a new plant to manufacture Perkins powerful 4000 Series engines in India. It is envisaged that the workforce will grow from 60 employees at the plant’s inception to approximately 450 when it opens in 2013. The 4000 Series is currently manufactured only at Perkins’ Stafford facility in the UK.

Overall, any change in the company's business strategy in India?
We currently employ close to 3,000 people in India across five facilities and are investing in our operations across to support the ever-increasing customer base here. India is already one of the primary sourcing hubs for us. About 80-90 per cent of the off-highway trucks that are manufactured in India are exported.

What is the current capacity and utilisation of the backhoe loader facility in Thiruvallur?
The facility is close to or near capacity, but we should not give unit volumes. Presently our dealers are in the process of ramping up their branch network. It will increase from 132 branches to 176 branches by 2013.

In April 2012, you said this facility would cater to domestic market. Still the plans remain the same?
We will continue the production of the current 424B model in two variants. We plan to add more models in the next two-three years, both for the domestic and the export market.

By 2015, where do you see Caterpillar in the Indian market in terms of market share?
We are bullish on India given the huge growth potential of the economy and we hope to capture a significant share of the market. Caterpillar is a global leader in most markets and we aim to be the same in India.

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First Published: Sat, September 29 2012. 00:34 IST