TIL revives expansion of crane project

In 2017-18, the Kolkata based construction equipment maker TIL Ltd reported a nearly 25 per cent rise in topline to ₹400 crore. But its net profit dropped to ₹17 crore. Apart from the cost push, what particularly impacted the bottomline was ₹12 crore jump in wage bill."

In an exception to the barren industrial outlook of West Bengal, TIL is on a hiring mode. “We recruited 128 persons in managerial cadres last year, including six or seven vice presidents. We are looking for more,” the company Chairman and Managing Director Sumit Mazumder told BusinessLine .

The need is imminent. To make the best of the good times, TIL has revived the ₹180-crore plan (including ₹50 crore land cost) to set up a second factory at Kharagpur to manufacture a new range of high tonnage mobile cranes that are witnessing high demand worldwide.

The plan was actually taken in 2009 as part of a wider expansion project. But the economic downturn forced the company to postpone the crane project. The impact of the slowdown was so strong that TIL ended up selling its Caterpillar dealership (at ₹350 crore) in 2016 to pare debt.

Mazumder will not disclose the name of the technology partner or the exact product specification of the crane project at this stage. But, he says construction will begin soon and the project will be financed through sale of land assets in Uttar Pradesh, which was previously used for Caterpillar business.

The new factory will not only meet domestic demand as the technology partner will source a part of the production to meet demands from West Asia and the South Asia.

Cranes are biggest revenue churner for TIL. The company has an existing tie up with Grove, a brand owned by Manitowoc Cranes USA and dominates 65-70 per cent of the tyre mounted rough terrain and tough terrain cranes.

But the market is getting more competitive. While the Chinese makers are throwing serious price competition, big time global crane makers like Tadano are entering the market. TIL is, therefore, readying for competition by widening the product basket and improving the scope for exports.

Export opportunity

Mazumder, who is also the past president of CII, said in a recent trend foreign equipment makers are quietly increasing sourcing from India due to Make-in-India emphasis and protection to intellectual property.

For example, till a couple of years ago TIL used to make port and container handling equipment in collaboration with Hyster-Yale Group, only for the Indian market.

Today Hyster sources part of TIL’s production of reach stackers to cater global demands. This is over and above the rising demand for such equipment keeping in tune with the rise on container traffic.

“Exports currently contribute seven to 10 percent of total sales. We would contribution of exports to move up to 40 percent,” the TIL chairman says.

Exports are, however, a part of the total growth plan. Mazumder is confident that the political environment remaining same, India’s construction sector will continue growing at a robust pace. “We expect to grow at 25 percent on a year-on-year basis for next six to seven years,” he said.

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