Volvo retains mining advantage; looks at new avenues of growth

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The endeavour at Volvo Trucks India is to be a trusted partner of their customers.

Story & Photos:

Ashish Bhatia

Volvo Trucks India started its journey in India in 1996. It started by offering long-haul trucks in the form of FH, FM and the FL. It found a calling in mining trucks over time. The economics of trucking turned the Swedish truck maker into a household name in heavy-duty mining tipper segment. In the long-haul highway segments, it was left to find a niche in the ODC segment. With 33 per cent of the business coming from the mining sector, Volvo trucks are going strong. They are adapting, innovating and partnering with the customer in the quest to achieve the position of a total solutions provider. Successful in striking a lasting rapport with its customers, especially in the overburden (waste or soil removal) applications in mines, Volvo Trucks India has found a place of pride in the niche market. According to Dinakar B, Senior Vice President – Sales, Marketing & Aftermarket, Volvo Trucks India, “A difficult market it is. Others, global majors have tried and failed.” Constituting over 90 per cent of its business, the remaining 10 per cent is attributed by on-road trucks – ODC carriers. Volvo Trucks India has found a niche.

The niche

Finding a niche in the mining segment was not easy. According to Dinakar B., the company does not offer an entire range of mining products in India. The main stay is the FMX heavy-duty tipper range. It has made a mark. It has made a difference as operators seek high productivity levels. Providing a total value preposition, the FMX range has made a name for itself. Drawing attention to the nineties and early 2000, Dinakar B averred that customers earlier purchased either heavy dump trucks or lower tonnage (10-tonne to 16-tonne) trucks. “With business purely dependent on the tenure of the contract and the nature of the customer’s work, it was necessary that we offered him the right solution. The conventional trucks in two axle, and in 6×4 configuration, with a power range of 180 to 200 hp posed certain limitations. Our mining trucks quickly made a mark. They could be relied upon, and were capable of withstanding work cycles of longer duration. So the operators switched over to Volvo trucks,” explained Dinakar. Pointing at an uptime of 24 hours, he expressed, “As long as the customers maintain their vehicles well, they are assured of a reliable truck.”

Apart from the need to work long hours, mining trucks have to offer higher productivity, carrying capacity, and an ability to pull from the lower bench to the higher stock bench. “It was after gauging the performance, that the operators decided to invest in our multi-axle trucks,” mentioned Dinakar. To support the mining trucks portfolio, Volvo Trucks India has built its own service and spares network. It has deployed its own engineers at customer sites. According to Dinakar, what makes the difference is the ability to provide a complete solution. It is what makes a difference. The brand immersion, according to Dinakar, is based on the three pillars of safety, environment care, and productivity. The market share of Volvo Trucks in India in the premium mining trucks segment is approximately 60 per cent. Competition is not idle. What continues to work in favour of Volvo mining trucks is the belief in technology, and aggregates that can stand up to the abusive nature of continuous working cycles in Indian mines. Keen to maintain 60 per cent market share in the mining segment, Volvo Trucks India continues to drive technology and offer the right solution.

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The right solutions

The introduction of Automated Manual Transmission (AMT) called I-Shift has provided huge benefits to the operators. Customers, according to Dinakar, have reported saving of five to six per cent over a similar manual transmission truck. He pointed at the FuelWatch challenge the company conducts every year to how fuel efficient its trucks are. Early this year, the company successfully conducted the eighth edition of the challenge at Singrauli, Madhya Pradesh. Striving to raise the skill levels of the drivers, increase fuel efficiency and consciousness towards environment, FuelWatch is becoming an integral part of Volvo’s sales strategy as far as the mining trucks are concerned. Refraining from selling trucks unless they are certain that they will make a profitable business case for the customer, Volvo Trucks India, once certain, not only sells the truck, it also provides support such that the trucks can run 24×7. “We assure the customer of a 90 per cent plus uptime,” said Dinakar.

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Setting up a benchmark by offering service and spares at the mining customer site, Volvo Trucks India is ensuring that breakdowns don’t last for more than 24 hours in most cases. “It entails synergy agreements, full maintenance contracts, parts contract, and technical support to the extent of offering helpers to Volvo Trucks customers,” according to Dinakar. Among the noteworthy initiatives that Volvo Trucks India has taken is the Indian School of Mining, Dhanbad. The school is helping customers to achieve high efficiency. To Volvo, the school is presenting an opportunity to understand customer needs. Having 200 touch points, and 750 technicians, Volvo advises its customers to invest in a team of technicians, as soon as the truck count goes up to 15.

Banking on technology

The BSIV FMX 460 8×4 tipper the company recently launched employs SCR and I-Shift Automated Manual Transmission. Introduced in 2014, the I-Shift was developed with the use of enormous on-road data gathered by Volvo Trucks in real-world conditions. Found on all Volvo brand of trucks sold, it is being improved continuously. Currently in the fourth generation, it is an indication of advanced technologies that a Volvo mining truck in India have come to possess. According to Dinakar, the I-Shift is far more advanced than what the competition has to offer, and assures class leading fuel efficiency. Drawing attention to Volvo having developed 10×4 tag and pusher axles with a 480 hp and 520 hp power engine variant, Dinakar expressed that the mining trucks that Volvo Trucks India sells, come with a mining software package. It supports good start-ability on gradients and operate-ability under less than optimum conditions. Work is underway to further enhance the software, which supports features like ‘jerk start’, ‘I-roll’ and ‘Eco-roll’. The FMX tippers, unlike the FM 460 puller, do not feature a crawler gear in their I-Shift AMT.

Market trend

With existing customers looking at a better duty cycle, and better cost per cubic metre handling, the market for niche application tippers is evolving in two to three directions. New entrants are looking to attain similar operating efficiencies. Coal requirement in India in terms of the thermal power necessary, is taking its own course to develop. Most coal excavation today, or coal mining requirements, are broadly being catered to by entities like Coal India Limited., Singareni Collieries Company Limited (SCCL) and Neyveli Lignite Corporation India Limited. They are looking at Mine Development cum Operations (MDOs). Privatisation and the auctioning of blocks is taking a definitive shape. Over the next two to three years it is expected that the dependence on Coal India Limited and government activities will reduce in contrast to the dependence on MDOs.

Citing an example of NTPC Ltd., which has taken a few blocks from Coal India Limited, Dinakar expressed, “The former will not buy coal from Coal India Limited going forward. The way the blocks are shaping up, they will make NTPC self-sufficient. The blocks will be handled by private entities. When these private entities enter the MDOs, they will look at more efficient ways of earning, which would lead them to attain cost benefits. They will look at a higher class of equipment like multi-axle dump trucks. This is where we see an opportunity.” “As MDOs rise, and local players take over the handling of coal from the surface, Volvo Trucks India is looking at an opportunity to transport coal. It is evaluating the market,” he added. Aware that overdependence on a particular segment could make it vulnerable, Volvo Trucks India is looking at other vital, growth oriented segments. Said Dinakar, “We want to expand beyond coal, and sustain our leadership in coal

mining.”

Dinakar B, Senior Vice President – Sales, Marketing & Aftermarket, Volvo Trucks India

Q. What is the mining segment contribution to Volvo Trucks India?

A. We are in the niche market. We do not offer a complete gamut of products in mining. Our mining trucks, or multi-axle mining trucks go to government contractors. They make a difference to those who want to take advantage of their productivity and value. Much depends on the contract tenure and the work that these contractors do. Going back in time, in the 1990s, or early 2000, our truck positioning was about total value preposition. Customers purchased heavy duty dump trucks or lower tonnage (10-tonne to 16-tonne) trucks. Multi-axle trucks were alien. Trucks back then were either two-axle or of 6×4 configuration with power ranging between 180 and 200 hp. What made our trucks tick was their ability to endure long duration work cycles. Our trucks have an uptime of 24 hours a day. They don’t need regular intervention except for preventive maintenance. As long as the operator maintains them, he is assured of reliable trucks. Offering better productivity, better carrying capacity, and better pull from lower bench to the higher stock bench, our trucks have won the confidence of the operators.

Q. How has the mining product portfolio performed over the last three years?

A. The year 2015 was the best year for Volvo trucks in India. We touched an all-time high of over 1200 trucks with a market share of 65 per cent. In 2016 calendar year, we experienced a drop of five per cent (60 per cent). We sold 1100 trucks approximately. Our market share today is 60 per cent. Competition is growing as others are experimenting with various methods and strategies to invade the niche segment that we are in. What we have learnt is that you as a manufacturer have to believe in technology, build aggregates that can sustain the loads, and the nature of continuous working cycles. Despite trying, the competition has not succeeded. I am confident that we will retain the 60 per cent market share.

Q. How are you adapting to the evolving needs of the market?

A. Mining in terms of the over burden removal work is evolving in two to three different directions. Existing customers are looking at a better duty cycle, and at better cost per cubic metre of handling. New entrants are looking to attain similar equations, and are scouting for entities to partner them. For the production of thermal power, the coal requirement is taking its own course to develop. Most coal excavation or coal mining requirement today is catered to by Coal India Limited., Singareni Collieries Company Limited (SCCL) and Neyveli Lignite Corporation India Limited. They are looking at Mine Development cum Operations (MDOs). Privatisation and auctioning of blocks is taking a good shape. Over the next two to three years, the dependence on Coal India Limited and government activities will go down. Dependence on MDOs will rise. NTPC Ltd., for example, has got a few blocks from Coal India Limited. It will not buy coal from Coal India Limited with the MDOs shaping up well. It would be self-sufficient with its own blocks. The blocks will be handled by private entities that will enter the MDOs. The private entities will look at efficient ways of earning. They will attain cost benefits, and will look at higher class of equipment like multi-axle dump trucks. Such a move will lead to efficient coal handling. Coal handling, from the pit to surface, is by government companies. Coal handling, from the surface, is by local players. We see an opportunity here. Volvo trucks could play a role provided the working conditions are conducive.

Q. Where do see the most traction coming from?

A. Our products in India are specifically developed for overburden applications. The flagship offering is the FMX 460 BSIV. Its advanced I-Shift technology, developed from the enormous on-road data gathered by Volvo Trucks in real-world conditions, is tailored for mining application. It is far more advanced than the automated manual transmissions offered by others. We have also developed 10×4 tag and pusher axles with a 480 hp and 520 hp engine option. The 33 cu. m. coal body on the FMX 460 is seeing good traction.

Q. How has the I-Shift evolved over the years?

A. The I-shift that we offer, comes with a mining software package. It is particularly suitable for hilly gradients and heavy loads. With the challenge of making it work on gradients and with heavy loads. We are continuing to improve the software on an ongoing basis. We recently improved the shifting part of the I-Shift. It entailed hardware and software changes, and resulted in smoother shifts. While features like ‘jerk start’, ‘I-roll’ and ‘Eco-roll’ improve fuel efficiency and performance, the I-Shift AMT of the FMX 460 does not come with a crawler gear. It is offered on FM 460 puller. Where the tipper’s first gear ratio is 14.9 that of the first crawler gear of the FM 460 is 32. There are two crawler gears on the FM 460. They help to tackle very heavy loads (greater than 325-tonne). In India it is approved for 150-tonnes.

Q. How do you plan to make the transition to BSVI by 2020?

A. Our product development team is working to meet the BSVI emission norms by 2020. We already offer Euro6 trucks globally. We will offer the best solutions to our customers.

Q. What is the extent of localisation in India?

A. We have up to 20 per cent localisation in India, which includes the body and a few components barring the driveline. The driveline is imported.

Q. To avoid unnecesary inventory, how is the demand for trucks and spares gauged?

A. We follow a project tracker. Each and every project is tracked. We map upcoming projects; gather details from sources. We also track the prospective buyers and bidders. From them, we understand the requirements. We also ask our customers about their future plans. We also rely on trend analysis. There are instances when we have to work up an error margin despite the best scientific methods we use. Our planning cycle is of five months. We have to import CKD kits from Sweden, and thus take into consideration the shipment, local clearances and assembly. We have to have a five months forecast. A certain degree of clarity is necessary. Inputs from retail organisation, and historical data from customers are obtained. It is used in combination with the other data to gauge future demand.

Q. How do you create brand awareness, and reach out to the customer?

A. Our strength lies in the fact that we have our own network. With it, we remain closer to the customer. We have always aspired for customer success as they use our equipment. In mining, it is not just the truck, it is instead the complete solution that we offer. Our brand immersion is based on the three pillars of ‘safety’, ‘environment care’, and ‘productivity’. Our products are fuel efficient. In terms of per cubic metre efficiency, the introduction of I-shift has hugely benefitted the customer. He is assured of five to six per cent savings. Testimony to this is the FuelWatch Challenge. It is our bit towards lowering the carbon footprint. Also, we do not sell a Volvo unless we feel that it is needed at the customer site. Once we are certain, we allow our trucks to operate 24×7 with an assured uptime of over 90 per cent. This is helping us to be a trusting partner to our customers.

Q. How do you rate your aftermarket thrust?

A. For us, the aftermarket has shaped up well. We have the best aftermarket network in mining in the country today. We are looked upon as the benchmark when it comes to the supply of spare parts at the customer site. We ensure that breakdowns do not last beyond 24 hours. We continue to improve our methods, be it through synergy agreements, full maintenance contracts, parts contract, technician support or by offering helpers to our customers. Having invested heavily on the driver training, we continue to encourage our customers to take initiatives like the opening of the Indian School of Mining at Dhanbad. We have hired people to visit customer sites and understand their business. If there is a change, we suggest ways to tweak the operations such that the best results are had. Our partnering with the customer helps him to get the best out of his Volvo truck.

Q. What global trends will touch India?

A. We are looking at automatic braking, which exists in our global portfolio. The autonomous mining truck that was tested in the underground mines is another technology, which I think, is easy to implement in the Indian mines too. Dynafleet coupled with operational efficiency is a new initiative from us. It gives an exhaustive data on its own. It is the crunching of that data, and extracting the relevant information that is important. We are working with our customers on the same.

Q. Does India contribute to the global R&D at Sweden?

A. We give feedback to Sweden, which is the Volvo R&D hub. This is done to fine tune the India strategy.

Q. What synergies do you share with your joint venture partner Eicher Motors?

A. In the mining segment, if our customers require Eicher trucks, we help get them. At the operating level we have a good understanding.

Q. Do you intend to reduce dependency on the mining segment?

A. We are looking at islands of opportunities, where our products will offer a value proposition in 24×7 working conditions. We are looking at a highly productive environment for them. We may not look at new products for expansion, and the three to four potential segments that we see include bulk excavation similar to lift irrigation that is carried out in Telangana on the Godavari riverbed. It is a time bound exercise. We see blue metal and Granite quarrying as a potential area. The gradients are steep and require careful manoeuvring. In the area of on-road construction, our tip-trailers could serve. After determining the potential islands of growth, we would need to change our products so that they can adapt to the needs. We will announce a revised product strategy next year (in 2018).

Q. What are your growth areas and the challenges you see?

A. Overdependence on a particular segment is a challenge in my opinion. It makes any organisation vulnerable. As 90 per cent of our business in India today comes from the coal overburden removal segment in mining, 90 per cent of my workforce and network is concentrating on one particular segment. We are not looking at other vital growth segments, and that is the challenge. It is something that we are seriously working on. We want to expand beyond coal and sustain our leadership in coal mining.

BGR Mining & Infra Pvt. Ltd.

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Among the top three coal mining contractors in India, BGR Mining & Infra Pvt. Ltd., (BGR) started operations 25 years ago. It began with a few conventional tippers, and a small excavator when it won the contract to excavate six lakh cubic metre of overburden in four months. The project was a success and gave the company the confidence to grow. From a few conventional tippers, the fleet of BGR has grown to include over 2000 tippers. It is in fact one of the first few key customers of Volvo Trucks India to have put every model of Volvo tipper to use. Apart from a large fleet of Volvo tippers, BGR has come to have the largest fleet of Volvo 10×5 dump trucks. These trucks are helping the company to meet the growing demand for higher capacity. Said B Umapathy Reddy, Chairman & Managing Director, BGR Mining & Infra Pvt. Ltd. that it is Volvo’s approach to partner with customers, and to set a benchmark in after-sales support that we have come to see them as our preferred partner.

Dhansar Engineering Pvt. Ltd.

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Dhansar Engineering Pvt. Ltd. traces its roots to 1890. With the sixth generation of the Agarwalla family at the helm, the company has come a long way to become one of the leading coal mine contractors. Also into construction and transportation, Dhanbad-based Dhansar Engineering Pvt. Ltd. (DECO) began its association with Volvo Trucks some 15 years ago after it won the contract for earth excavation and filling at the Tehri Dam project. While Manoj Agarwalla, Director, Dhansar Engineering Pvt. Ltd., attributed the success of their operation in overcoming operating challenges in an extremely difficult strata, boulder formation and fragmented terrain to their partnership with Volvo Trucks India, Harsh Agarwalla, Managing Director, Dhansar Engineering Pvt. Ltd., mentioned that their decision to choose Volvo trucks has turned out to be right. “Volvo trucks lived up to our expectation,” he averred. With a 100 per cent Volvo fleet, DECO is one of the largest customers of Volvo Trucks India.