Jan 4 2018 | Q&A

Cavas Dumasia, Vice President - Marketing & Sales, Godrej Material Handling

Cavas Dumasia, Vice President - Marketing & Sales, Godrej Material Handling shares his insight with MHE Infobank about his company, products and solutions, features, demand drivers, challenges, warehousing sector and equipment rental market scenario, operators training, customer support, green initiatives and market outlook.

About Godrej MHE products and solutions
Started in 1963, Godrej MHE has been the pioneers in material handling industry. We manufactured the first forklift truck in India. Since then we have been manufacturing counterbalance trucks of various capacities along with useful attachments. We have also added a full range of warehouse trucks and now represent major global players such as Crown. That along with our own exhaustive product range and storage solutions allows us to give a complete solution to customers who wish to set up or modernize their warehouses. At Godrej we provide three major solutions required in warehousing. One is the material handling equipment, right from a small pallet truck to a 25 tonne forklift truck; we have the range of reach truck and articulated trucks. That allied with our racking systems and automation solutions (in JV with Korber) allows us to provide a complete package of solution for a customer. Any requirement of a customer can be met by Godrej. It allows our teams to look at customers’ problems and requirement of solution holistically, without being sub-optimal.

We have pioneered many of the newer technologies in India and found solutions for industries. For e.g., we have a 10 tonne forklift truck which can go inside a container. We do a lot of customization. For steel manufacturers we have designed and developed a forklift which can carry steel coils of up to 10 tonne inside a container. We have also introduced paper roll clamps for forklifts. We have also pioneered tyre handlers in India handling tyres weighing up to 8 tonnes fitted on large earthmoving equipment. This equipment has rough-terrain capabilities and can go into mines. We continue to innovate to assist our customers add value to his operations.

MHE Features
While productivity, fuel efficiency and ease of operation are important for a material handling equipment, I would say safety is of paramount importance, because this is moving equipment in a plant or a warehouse. Godrej material handling equipment are safe as they adhere to the relevant IS standards. Yet it is a material handling equipment driven by contract workers. Hence we try to go beyond the standard to provide additional safety such as automatic speed reduction of equipment while equipment is turning. These features come standard in our equipment, while in many of our Indian competitors’ products this is an optional feature.

In emission we have seen a sea change. We see the opportunity in people wanting to be more environment-friendly. Godrej as a company is always environment conscious. We have invested in R&D towards development of battery-operated electrical forklift trucks. As a result, today we have a range of electrical products which are state-of-the-art, incorporating the latest technology available in the world.

Demand drivers
With consolidation of warehouses, and they getting larger and taller, it will necessitate mechanised handling and may be automation. As the land availability is shrinking, people are going vertical for storage of cargo, preferably in palletised format. To palletise and store cargo vertically, one will require material handling equipment. In the workforce also the trend is towards more skilled work rather than being involved in unskilled jobs. Consolidation of warehouses, shrinking land availability and the non availability of semi-skilled / unskilled workforce will push for mechanisation and automation.

Palletisation is a major factor that will drive the growth of material handling equipment in warehousing. Many large companies looking at making their supply chain more productive and efficient will look at how they can handle loads effectively. When loads are palletised, the backward and forward linkages also need to be palletised if the system is to be efficient. This will put increase focus on palletisation and utilisation of heights etc which will again enhance the demand for handling equipment. Growth in manufacturing and trade will really push the absorption of material handling equipment. “Make in India” will be a real boost to manufacturing sector which will benefit our industry of material handling.

The scale of warehousing operations is a major challenge in the growth of material handling equipment. Considering the current level of manufacturing, warehousing and trading activities in India, the market for material handling is at a low level compared to the industrial economy like India should have for the annual sales of lift trucks. In 2000, the number of lift trucks was about 1,600 and today it is about 10,000 which mean it has taken time to grow to this scale. Our warehousing set-ups need to improve in size and operations which will increase the requirement of more handling equipment and storage solutions. Today about 70 per cent warehouses are small in size where the scope for mechanization is not eminent. Warehousing and handling use sub-optimal and in such cases the logistics cost goes up. Other major challenge of varied tax structure is now gone with the GST.        

Market scenario - warehousing sector
Post GST, companies that distribute products through large number of warehouse / distribution points in India are definitely reviewing their supply chain. Before GST, there were the issues of various tax components such as VAT, entry/exit tax, octroi etc, and the related economics.

But today a company can take a completely different view of where they want to set up warehouses / distribution points, how they want to configure the supply chain, and so on. Today, GST has taken out the tax angle from decision making. Now the decision making will be totally based on the demand, supply, location (close to customer and / or vendor base), and logistics cost. This is a major change and is definitely going to change the logistics scenario. GST will be a major step towards reducing logistics cost. Now with the check posts and octroi points being dismantled trucks can reach faster which will reduce the overall logistics costs due to higher truck utilization and reduced operation costs.

Rental scenario
Rental is an ideal option for customers because it will keep away the issues of capex, equipment maintenance, dedicated operator, space to keep the machine, etc. Rentals allow a lot of flexibility to a customer. Rentals play a major role in the growth of material handling equipment such as forklifts, Reach trucks etc with about 25 per cent of the total market being catered by hirers. We expect this to go up to 40-50 per cent in the next 5years. Currently rental market is largely unorganised, however there are a few organised rental players and we are one of them. Godrej has been in the business for almost 10 years now and we have a matured model in renting to meet our customer needs

Training is imperative to update the operators and staff about the new and emerging technology developments. We have three training centres at Mumbai, Bhubaneswar and Chennai, and are planning to open one in the North. We train forklift operators at these training centres including customers’ operators. We also identify unemployed youth from the area and provide them training. Our training centre in Mumbai is the first forklift training centre in India to be registered under the National Skill Development Corporation (NSDC).

Customer support
We have a wide service network with 16 company owned branches and 51 dealers covering 72 locations across India, where we have factory trained mechanics and service engineers. Parts are stocked across these locations to provide easy availability to our customer. So we have mapped the whole of industrial India. Our aim is to be close to our customers. Our reach is a major advantage towards service support. We also provide warranty services, a range of AMCs and comprehensive maintenance. 

Green Initiatives
Environment conservation and preservation is another core value in the Godrej group. As an organization we have embarked on the journey to gain Greenco certification. 6 of our Godrej’s facility have been awarded LEEDs certification including 2 platinum, 3 silver and 1 gold certification for its different facilities. We aim to become water and carbon positive within the next 5 years. At Godrej Material Handling, we continuously monitor energy and water consumption and adopt measures to reduce this per forklift produced every year. We recently changed the air-conditioning system from a common conventional centralized AC system to a chilled water air conditioning system. This has reduced the energy consumption by 26%, besides making it possible to switch off / on individual blowers as against the earlier ducted system.

Most of our product research and development is focused on battery operated forklifts and we firmly believe that the world will move towards an non polluting electric future in the industry. We are also investigating the use of bio degradable oils and fluids that are used in our products.                  

Market outlook
The warehousing sector is on the cusp of a major change. We can expect changes happening over the next six months to three years as India graduates towards more organised modern warehouses from the current unorganised small ones. Material equipment market will grow in time with this. Successful “Make in India” programme and the GST will lead to a exponential growth of the industry.