Young, energetic and well-experienced with global exposure, ParagSatpute, Managing Director, Sandvik Asia Private Limited talks to Construction Times about the company’s growth journey and future plans in the exclusive interview.
Please share with us your journey with Sandvik and how Sandvik is contributing to Nation Building.
ParagSatpute: I have been with Sandvik for over 20 years. I started my career in India as a Sales Engineer, working for the Sandvik Materials Technology business. I was one of the first expatriates to work on a global assignment in the UK from 2002. After managing the operations there for a few years, I moved to Germany, heading the European sales division and then to Sweden as the global President of the ‘Wire and Heating Technology’ product line, a part of our SMT business area, manufacturing mainly wires, heating systems and components for furnace materials. I also had the opportunity to work with the Group CEO of Sandvik, along with members in the Group Executive Management team, towards formulation of the long-term strategy for the Sandvik Group. It was then in 2014, I moved to India as the Managing Director for the Indian operations. The last three years have been interesting for the industry and for Sandvik.
Having experience of working with multiple markets and regions, I consider India as an emerging market with a promising growth in the coming years. While the European and American markets are technologically advanced, India is extremely dynamic in terms of population, geography and sectoral diversity. In the last three years, the focus of the government has been on infrastructure, power, manufacturing through ‘Make in India’, building Smart Cities, skill development and digital advancement. These complement our product portfolio. We have products, which go into each of these segments. We see it as a great journey so far, the future looks even brighter!
What are the growth prospects of the market from Sandvik’s perspective?
ParagSatpute: We have seen a distinct change in the sentiments across the markets. With our products, technology and experience, we can partner in the development of the country to contribute significantly in building a strong nation. Since 1960, we have been here in India. We have grown steadily for over five decades to have six production units across India, a very good network of sales offices, warehouses and a strong, as well as, loyal customer base spread across both private, as well as, the government sector. This combination of our strong presence and experience augurs well for our growth in the coming years in India, with good focus on the key sectors initiated by the government.
How would you describe Sandvik’s growth trajectory and opportunities?
ParagSatpute: We have been growing at a steady pace. In the last three years, we have registered a double-digit growth and we expect to continue the trend. We see a very clear uptake in certain sectors that we are active in: for e.g., road construction, as well as, underground mining. Our products in infrastructure development, such as crushing and screening equipment, tunnelling equipment and surface drilling equipment have seen a boost in demand. We have also evolved and our strong product portfolio is backed by a robust aftermarket competency, tailored to our customers’ needs has resulted in a win-win situation and contributed to a higher revenue.
Please enlighten our esteemed readers about Sandvik’s global strategy.
ParagSatpute: We have a clearly defined global strategy. We invest to become leaders and our aim is to be No. 1 or No. 2 in the markets, where we operate. Second part of strategic focus is technology and innovation. Sandvik is a 155-year old company. The long-standing success can be attributed mainly to our appetite is staying ahead of the technology curve. We invest 4 percent of our global turnover to R&D every year (2016). India is an important R&D base for Sandvik, with over 300 engineers that accounts to almost 15% of our group R&D capabilities. Research is focused on several priority areas, such as developing new materials, efficient industrial processes including automation and information and communication technology (ICT), energy efficiency and additive manufacturing (3D printing).
Another strategic focus is to make sure, we are quite quick in responding to the changing trends in the market, with decisions as close to the customer as possible. We make this possible through a product area business model, where each PA is responsible and accountable for its own operations, as well as, profitability. Another thing sets Sandvik apart is our commitment to incremental and continuous improvement Our Group CEO, Bjorn Rosengren has well explained this concept by saying, “I believe that strong performance is about small improvements every day.”
Another key driver for our growth strategy, particularly in India, is the need for exceptional people. We aim to bring the right people on board and train them, enhance their skills to ensure they can deliver to the best of their abilities. In India, we have roughly 3,000 people, stable and growing.
Please describe your business model.
ParagSatpute: We have multiple different product lines operating in India and the customer segment is quite diverse, right from tools and tooling systems for metal cutting, as well as, components in cemented carbide and other hard materials; equipment and tools for the mining and construction industries; products in advanced stainless steels, special alloys and titanium, as well as, metallic and ceramic resistance materials.
This obviously calls for a diverse go-to market model to span, such a large country. We have both direct customers and wide network of dealers. We can reach all pockets and areas in India, in an efficient way, either through direct channel or a dealer network or our own stock points and warehouses. We have a rebuild unit in Nagpur, combined by our training centre. Class room training and practical hands-on training are imparted, on how to maintain the equipment.
What is Sandvik doing in the roads and highways sector?
ParagSatpute: An excellent network of roads and highways helps improve productivity tremendously. India needs a good infrastructure. I am glad to see; it has picked up pace. In the infrastructure segment, we specialize in equipment, tools and services for the breaking, drilling and crushing niches in the construction industry. Application areas include tunnelling, quarrying, well drilling, civil engineering, dimensional stone, demolition and recycling. Deploying commendable solutions that aid highway construction projects like the Golden Quadrilateral and Delhi – Gurgaon Expressway, Sandvik’s tunnelling jumbos have been in operation in large rail-road projects, strategic oil storage caverns and classified military installations across India. Sandvik is proud to be a preferred supplier to DG Border Roads for construction of roads along the borders of Pakistan, China, Bangladesh, Bhutan and Burma. Some of India’s largest sand manufacturers has opted for Sandvik’s crushing solutions, which has delivered the desired productivity and enhanced their satisfaction.
What are Sandvik’s contributions in the mining sector?
ParagSatpute: Mining in India has huge potential. We enjoy a substantial market share in underground metal mining equipment, with offerings in the range of 50 to 60 tonne underground trucks, 17 tonne underground load and haul equipment and twin boom jumbo, as well as, production drills. We have recently introduced the bolter miner technology for the first time in India, which will operate in one of the deepest underground coal mines developing gate roads. We have delivered optimum crushing and screening solutions in the iron ore, zinc and coal mines; bringing desired productivity, as well as, enhanced customer satisfaction. Our forte in top hammer surface drilling solutions has helped us offer innovative products in quarries, dimensional stone, coal mining and infrastructure sectors.
What about the training of operator of highly sophisticated machines in surface and underground applications?
ParagSatpute: While we do not directly operate the machine; we maintain and service them. Our product specialist and service team are well trained on the equipment and they handhold the operators, once the machines are at site. This continues till the operator is well-versed to run the equipment to its optimum capability. Through periodical refresher trainings, we keep them updated on the machine features and performance parameters. One of the recent innovative initiatives has been the product ‘Safety Campaign’ for operators to create awareness through discussions on safety features & guidelines that need to be followed, while operating the machines.
What about servicing the equipment in the mines?
ParagSatpute: We believe that even an hour of downtime can cost our customers significant productivity and financial losses, hence a robust aftermarket support is critical to our business and we are committed to it. We provide round-the-clock service support at all the major mining sites, by deploying a team of skilled on-site service engineers. We have various types of maintenance programs depending on the type of the equipment and customer’s requirement. The objective is to provide optimum equipment availability and partner with customers in increasing their productivity. We invest in training of our people, so they can deliver world-class service and create value for our customers.
What will be the impact of GST for equipment?
ParagSatpute: GST –our early assessment is that there is going to be some cash flow impact, because many of the equipment is put under the highest slab of 28%. However, I do not expect significant bottom line impact. For a company like Sandvik, we have been preparing for quite some time and are geared up for this transition. We have been proactively engaging in industry forums and having dialogue with the concerned authorities and the government, where they are open to the suggestions, as I understand.
Will there be an impact on pricing?
ParagSatpute: It is too early to comment on pricing, because it will depend on the reconstitution, post GST implementation. Reflecting from global experience in other parts of the world, there has been an inflationary trend initially, which has tapered down in the subsequent years. We have done our impact analysis for over a year and we are well-prepared for the transition. In fact, we are happy that finally, it is happening and are confident to see a positive impact in the long-term.
What role Sandvik as a company play in influencing government’s policy for the betterment of the whole industry?
ParagSatpute: We provide our inputs from our standpoint in various forums organised by leading industry bodies, for example CII. Being a Swedish company, we are also actively engaged with the Swedish Chamber of Commerce in India and participate through their network with ministries and DIPP. We do our own surveys and present it in the bilateral government-to-government meetings. This we do as part of the association, not as an individual company.
Please enlighten about Sandvik’s CSR and sustainable activities.
ParagSatpute: We have been into CSR activities since a long time, much before it was built into the system. As a responsible corporate, we need to support the communities surrounding us. We call it sustainable business, which goes beyond charitable projects. We also develop products and processes, which are sustainable. For example, cutting tools, which are made of carbide is a rare mineral. Globally, we collect these used tools, and recycle them at our facilities around the world, one of them being at Chiplun in India. This leads to a huge saving, in terms of natural resources and energy used to produce the tools. It is 40 per cent less, when you use recycled materials. This is a great example of creating a sustainable business model, without negatively impacting the environment.
Specific to communities, we are focusing on skill, which is the need of the hour; from primary education, right up to skilling at a senior level. We are sponsoring schools, wherever we have significant operations. We not only fund these projects, but also have Sandvik appointed people to monitor the progress and optimum utilisation of the funds. We have a strong focus on gender diversity. We are sponsoring girls to pursue higher education. We instituted the ‘Sandvik India Diversity Awards’ last year and the first awards were given this year. Here we recognise people, organisations and companies, who are doing good work in gender diversity. This time we received 170 applications, of which 8 projects were awarded and the plan is now to work in supporting them. We work with NGOs for child development, school for orphans, and a lot of people in Sandvik voluntarily offer service, including me and my family.
What are the technological innovations being incorporated in Sandvik?
ParagSatpute:Sandvik invests in digitization and automation in all business areas. Some examples of our solutions: intelligent tools and software for the metal cutting industry (SandvikCoromant and Seco Tools), automation and monitoring solutions for the mining industry (SMRT), CAM software for simulation and digital data management tools. We are connecting all our equipment and are adding sensors to collect data, which will be used for improvements and development of self-learning algorithms. We are also looking on how to add various sensors to our products, as a feature for our customers and for us to gain information of our products, in use. Our supply chain is being gradually updated to become smart and where customers have online access to place orders and get order information. We are also looking at the possibilities with Additive Manufacturing as a new way of supplying products. Within SMRT we offer automation solutions, which make remotes steering of mining drill rigs possible.
Describe Sandvik’s safety solutions.
ParagSatpute: For Sandvik, safety is ‘the’ priority. We have a very strong culture of safety, every person joining Sandvik get a detailed training on safety. We start any internal meeting with a brief on safety tips and in our equipment also, there are lots of safety features.
Last, but not the least, please tell us about Sandvik’s manufacturing activities in India.
ParagSatpute: We started manufacturing in India in 1960, becoming one of the first Swedish companies to establish a subsidiary with a manufacturing unit in the country. Today, Sandvik has a pan-India footprint with five manufacturing units in India located at Pune (Cemented Carbide & HSS Tools, Rock Tools, Solid Carbide Tools, Mining and Construction equipment assembly centre), Mehsana (Stainless Steel Extruded Tubes), Hosur (Wire & Heating Technology), Hyderabad (Rock Tools) and Chiplun (Carbide Recycling Centre). We are also an important export base for Sandvik globally, catering to countries all over the world.