New business strategy

The company is working on several marketing strategies to gain chunks of market share. Concept selling was a challenge for this kind of product because the difficulty lay with creating awareness. One of the strategies implemented by Tata Hitachi was ‘Try and Buy’, where the customer had the opportunity to take the machine and make use of it. This approach, though, had huge associated initial costs; however, the company was able to recoup the investment due to the long-term customer satisfaction and expansion of its customer base which followed. 

However, with digitisation, direct engagement has become easier. Since there is a limited type of target customer for such products, the company is able to engage with the existing customer base, while also gaining new followers through social media and other digital avenues. The company’s wide range of products targets the requirements of the Indian market in the infrastructure and mining sectors. 

“State governments with elections are loosening the purse strings and releasing investment funds for infrastructure development. Many central government-driven projects like road construction for the ‘Green express highway’ which will increase connectivity for the automotive sector in Karnataka, are being promised funds. With this kind of demand, we are expecting the coming quarter to be good,” says Singh optimistically.

While Tata Hitachi is currently heavily involved in manufacturing excavators, it is moving into the wheel and backhoe loader segment. Its imports are at 30-35 per cent overall, but a range of equipment is completely imported, especially for large-volume products. This is something the company is trying to change by concentrating on localisation. 

Since the existing plants already have the capacity for an increase in production without any need for further capital expenditure, the company is in great shape as far as its expansion plans are concerned. While its current focus is on exporting to SAARC and neighbouring countries, the next plan of action is towards the Middle East and South Africa. It is already sending its machines on a trial basis for exports as the global market share for backhoe loaders is massive. The machines produced by Tata Hitachi follow global emission norms and tout the latest technologies like the telematics predictive analysis system.

Tata Hitachi’s stance on sustainability is unmistakable and is prioritised at all levels. The plants are solar-powered and they facilitate rainwater harvesting. The company promotes a circular economy where all scrap material is recycled. It supports refurbishing aggregates and increasing the lifespan of existing machines, creating huge value for customers. It also offers variable pricing business models, buy-back with competitive resale prices, full maintenance contracts and equipment rental solutions. 

The company is looking at threefold growth by 2030. However, the industry as a whole has faced multiple challenges and has not seen continuous growth over the years. Hence, with expansion into new products, new segments, new markets and exports, Tata Hitachi wants to achieve at least 10 per cent CAGR in the next 5 years.

The infrastructure sector is a key driver in India’s economic growth. The aggressive push and support from the government to speed up projects across the country will help all players in the segment. Tata Hitachi is well-placed to grab this growth opportunity in the coming years. 

Lending a helping hand 

The company firmly believes that long-term value creation for the business is linked to the organisation embracing sustainable development.  Every business needs to be intertwined with environmental, social, and governance (ESG) concerns. There is a paradigm shift away from the sole purpose of generating profits towards sustainable development and long-term value creation for organisations. 

Environment: Tata Hitachi is aware of the need to adopt environmentally sustainable practices in design, processes and products. The company’s product life cycle assessments lead to eco-friendly designs and reduce the overall carbon footprint of its products and services. This helped reduce the carbon footprint in manufacturing by 45 per cent in the last 5 years.

t also made significant investments in the plants at Dharwad and Kharagpur towards renewable energy, rainwater harvesting, and reusing ETP water for irrigation. The Kharagpur plant has an installed solar capacity of 10.5 MW which meets 74 per cent of its power requirements, while the Dharwad plant has a target to meet 90 per cent of its power requirements. 

Social responsibility: To encourage women’s participation in all areas of operations in the plant, various women-friendly policies and initiatives by the company helped see more women marking their presence felt on the shop floors. Their CSR initiatives are categorised under four broad heads – skill development, education and literacy, rural development, and healthcare.

Tata Hitachi’s Operator Training Centres at Kharagpur and Dharwad are on a mission to skill unemployed youth for the enhancement of employability and entrepreneurship under the Skill India program. Several key partners and NGOs have helped the company to mobilise young people. 

Healthcare: During the pandemic period, Tata Hitachi played a critical role, partnering with IIT Dharwad, by donating face shields, masks and sanitisers from its Dharwad plant to various hospitals. For this Covid-19 relief initiative, the company received a Certificate of Appreciation from CII. The company also ran regular medical check-ups and blood donation camps.