I believe that India holds significant possibilities to continue its growth.

The applications we work in require not only high qualitative productive safe equipment but also a strong support network of parts and service.

- Jerry Andersson, Managing Director, Epiroc

Epiroc is a leading global productivity partner for the mining and infrastructure industries. With cutting-edge technology, Epiroc develops and produces innovative, safe and sustainable drill rigs, rock excavation and construction equipment and tools. The company also provides world-class service and solutions for automation and interoperability. In an exclusive chat with Construction Times, Jerry Andersson, Managing Director, Epiroc shares his views on the current trends in mining and construction sector and highlights innovative solutions offered to its customers. Excerpts from the interview…

How do you assess the current growth trends in mining and construction sectors? To what extent the pandemic has impacted these sectors, and especially Epiroc's business performance?

 Mining sector in India turned around in India about 4-5 years ago from a negative to a positive trend and the annual growth rate last two years have been around 2-3 %. That is generally a pretty low figure for a country as India with such resources and with an industrial production in SouthEast Asia at 3.6% in 2019. At Epiroc we have a balanced exposure to the construction market which have had a target of about 5.6% for the period of 2016-2020.

The pandemic has severely hit both these sectors at the short term. Demand for excavators and backhoe loaders, breakers and other tools have had a crushing blow to their trend. Demand have dropped to a period of almost 0 and in mining, the demand for minerals went down drastically as production have slowed down globally. Indian government have tried to battle this by maintaining the production in coal sector to stock pile and reduce import dependency. They have also started to auction some blocks hoping to speed up development in mining sector and secure workers positions as this is a labour intensive market. As long as mineral prices are low though it is hard to see anyone really investing in mining, something we see short term at our customers. Also the unique rules initially in India not to allow companies to adjust to the situation with relation to staff, in combination that there is low off-take have brought both the mining and construction market into a tough liquidity crunch.

Epiroc India has in this period had to take hard measures to secure the cash flow in order to secure salaries etc. Management has taken a salary cut over a period of time and we have held the salary increase as well. We also had to adjust some staff with third party suppliers, as our customers have changed and reduced the scope of work.

Depending on how government is going to handle lockdowns etc. ahead I am confident that Epiroc India now is in a good position. We have stopped the salary cut for the management, strengthened the insurance policy for the people and are soon to go ahead with the increments.  In the last three years we have grown our business in the Indian market by more than 30%. 2020 will most likely break that trend, but I see it as a short to medium term situation. We adapt to the market and will come out strong considering the situation in this year.

The government has initiated steps to allow commercial mining. Will the same bring a demand trigger and what time frame do you expect this to happen?

Privatization in mining have been going on since 1993 in India, when steels mills and power plants initially started to be allowed to mine coal. In early 2000 a study indicated that the gap in 2011 there would be a gap in demand and supply for almost 70 million ton. With power demand in India increasing fast the gap is growing as well. There is definitely a huge capacity in terms of resources in India. The timing is a bit unfortunate though. End key users of power, steel, cement etc have been put in a somewhat distress situation with their company financials and I believe most likely, they will re-evaluate their plans for operationalization of auctioned mines which may delay the process somewhat.

The government may be expecting a huge investment of 33000 crores in next five to seven years, but there are hindrances. With several procedural bottlenecks (even if possibly better now) and global giants divesting stakes in coal mining its uncertain how many foreign investors there will be. Just allowing commercial mining is only one step, there are land acquisitions, forest clearance approvals, environmental laws and other things in India that needs to be looked at for these things to take speed. The target of five to seven years are probably very optimistic and although some mines in iron ore may become operational it will most likely take longer time than expected, especially at this stage.

As technology is fast evolving, so are the business process. Could you brief us on your process automation solutions? What are the new solutions you are excited about?

I believe the stage we are at in India right now is very exciting. Emerging from completely analog machine-labour driven mining and construction market is rapidly turning into a computerized modern world which put new demands on everyone. The process where the customers step by step learn and see the benefits of each and every new equipment and then ask for more in next one is a very exciting and rewarding process. While some of our customers are exploring the benefits of our Mobilaris system, an underground asset management system where you will be able to see every person or equipment that you tag in realtime on a 3D map, others are just starting to explore the automation tools that help positioning the machine correctly when drilling. In India, for surface mining we have recently also delivered a remote operations system where the operator can sit in a safe and comfortable environment operating several units by same operator. The productivity and safety enhancements that these systems give are enormous and I am very excited to see how the customer will realize this.

Connectivity and automation helps increase equipment productivity, especially help increase efficiency and safety.  Brief us on some of the tools you have developed in this area?

Our toolbox in this area covers a wide range of products. It starts with the more basic systems like Certiq or HATCon, where you in realtime can monitor productivity of your vehicles/tools and also see the need for service. Then, there are the different telematics solutions that help the operators perform better. Automatic positioning, autodrill, autoload (to effectively fill your scoop in the loader each time) etc all are systems to help the operator and bring efficiency into the operation.

There are autonomous drilling/bench remote/tele-remote that helps you operate your assets in distance which brings efficiency and safety for the operators. In some countries (not yet India) we are even making vehicles completely autonomous as a response to increasing demands for safety and efficiency.

Mine/asset management system, Mobilaris, creates a virtual map of the whole operation and where you can do planning, monitor assets, handle traffic management, direct your staff and give realtime information to operators, drivers, service people and much more for the underground mines. This system you can connect with any equipment or person. It is really the future for managing underground mining.

Other programs include Surface Manager which is for the surface mines that connects the performance of your units and you can evaluate and improve on your planning and production.

Finally there is also the ‘My Epiroc' which basically any customer can use and keep track of performance and usage of their equipment in. In essence there is a lot of functionalities and programs that can help you in this area and at Epiroc we have them all, the question is whether you are ready to utilize them.

Brief us on the measures taken to support your customers during this crisis?

The primary thing during this lockdown have been to ensure that operation at sites can continue. Offices may close and there are travel restrictions, so you need to make sure that those who still are working can continue to do so. Engineers have taken the extra burden, stayed longer on sites than usual.  Extended support have been given through online trainings, we also created safety manuals/handbooks how to return to work, how to behave at work which we have shared with our customers and partners. All may not have the resources to create a structure around it and this gives a guidance what to do.

Could you brief us on the initiative to skill up technicians and operators?

While new technologies may help the operator, it also put new demands on the service people. The requirement that is needed today as a service engineers require knowledge in hydraulics, mechanics, electrics and electronics and a fair amount of computer knowledge. A skilled service engineer also needs to know application knowledge so that he can really understand how the machine is to be used and adjust parameters when conditions change. There is simply no place that today educate people in one go that is needed for modern service engineers, so whenever we supply a machine, we conduct compulsory training to operator and service technicians at site. We certify all our technicians/engineers to ensure their skill levels are on top. When needed and possible we also send people on specialist courses for technical and application trainings abroad to make sure they can add the value to customer.

How do you expect the trends to unfold post Covid?

I believe that India holds significant possibilities to continue its growth. There are definitely potential in both the construction and mining market. India is expected to be the 3rd largest economy in the world and a continuous investment in infrastructure that is so highly needed will drive a demand internally at least, which will drive Indian market. Also I believe there will be other trends, such as working from home that will be more accepted in the future. In the supply chain sector, taking that lockdowns and new barriers are coming up, I believe we will see a stronger sourcing for resilience rather than only best competitive offer. We have to adapt our mindset to whatever the situations that may arise again.

Why should a customer come to Epiroc? What are core competencies and strengths of Epiroc?

Firstly because of our commitment to you as a customer. It is a personal commitment from our sales and service people to make sure that our high productivity equipment comes to its right. That it helps you lower your total cost of ownership while increasing production. Our service network is also one of the strongest competitive advantage in India. Equipment, if used correctly are not supposed to break but the applications we work in require not only high qualitative productive safe equipment but also a strong support network of parts and service. It is just the nature of this business.

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