Kolkata, Oct 11 (PTI) Construction equipment maker Sany Bharat, a wholly owned subsidiary of Shanghai Stock Exchange-listed Sany Heavy Industry Co Ltd, will increase its localisation to 50 per cent in the next two years to reduce dependence on imports, a company official said on Tuesday.
The Indian arm of the Chinese firm currently achieved 35 per cent localisation in equipment manufacturing, he said.
It is expanding its reach in the eastern part of India, and has opened an integrated sales and service division in West Bengal’s Howrah district to tap growth opportunities in the region, the official said.
“We now have a localisation level of 35 per cent for products manufactured at our Pune facility. We have decided to increase this to 50 per cent in the next two years. We import from Japan, Korea and China. During the Covid period, we faced cost escalation and supply chain disruptions that affected margins,” Sany Bharat Managing Director Deepak Garg told PTI.
Less dependence on imports will aid cost savings, he said.
“In the long run, when the vendor ecosystem will grow stronger, we aspire for at least 70 per cent localisation,” he stated.
The company had, in 2012, spent Rs 750 crore in its manufacturing plant in Chakan in Pune.
In terms of demand, Garg stated that the industry would expand by 10-15 per cent this year, while the firm is aiming at a 30 per cent growth in both volume and revenue in the current fiscal.
“We have sold 3,800 units of equipment, and this year we are aiming at 5,000. The revenue, which was around Rs 3,000 crore in FY’22, is also expected to increase to Rs 4,000 crore,” he said, adding that the Indian market will be the growth driver as the country is witnessing massive infrastructure building.
With the economies of South East Asian countries struggling, exports may continue to be depressed, according to him.
“Among construction equipment, excavators account for 80 per cent of volume, but contribute to around 45 per cent of our earnings,” Garg said.
The company adopted a strategy that combines sales, service, spare parts, and upskilling under one roof. The facility at Howrah is the seventh and the second in the eastern region after Odisha, he added.