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Briefing on the market share and revenue model in India, Kamal Prakash Srivastava, Sales Head -EAFM, South Asia, Donaldson India Filtration Systems, says, ?Donaldson caters to two major segments, off-highway and commercial vehicles and is one of the market leaders across the globe. Our business strategy is two-pronged - our focus is both OEMs and the aftermarket, and I can proudly say that we have over 80 per cent of customers from both these verticals. From the Indian perspective, 65 per cent of the business is from OEMs and 35 per cent is from the aftermarket. Out of this 35 per cent, approximately 55-60 per cent of our business comes from off-highway vertical, 25 per cent from transportation sector, and the rest includes agriculture, and industrial verticals.?

For any industry, the competition between organized and unorganized players is a reality. In the filter market, the space is too crowded with some global firms and scores of domestic companies trying to take a mouthful of the pie, especially the aftermarket. Does this have any impact on a player like Donaldson? Srivastava quips, ?We are not too much worried with this which is a part of the game. Rather our business philosophy is based on four pillars - Quality, Range, Availability, and Competitive Price.? Explaining further, he says, ?Firstly, at Donaldson, whatever filter products we manufacture they meet,and many times, exceed the OE specifications. Since we are technology-driven company, our products are superior to competition. Secondly, it is our wide range. We develop entire range of filter solution for a machine. To be a leader in the aftermarket, one needs to have a complete range because in one way, aftermarket is not just a price-game but a ?range-game?. As a complete solution provider, I can?t expect my customer to buy air filter from me and tell him to source lube or hydraulic filter, or filters for coolants and transmission from another company. So, when we design and develop solutions for a machine, we develop the complete product solution for that machine. The customer will be happy to get everything under one roof.?

Srivastava adds, ?Another important factor is availability. It is another edge we have. We keep the inventory at our end, and make it available whenever and wherever the customer wants it, at the shortest span of time. Lastly, the success also depends on how competitive the price is. Our products are competitively priced.It doesn?t mean our products are cheap. As mentioned, our priority is to meet or exceed OE specification.?

He further adds, ?On a broader perspective, now we are complying with Tier III emission norms which will become Tier IV. In such as scenario tolerance level of the internal parts of engine is going to be restricted further. This means we are working with tighter tolerances which make it imperative the contamination-free oil for the media under which it can perform - for that you need better filtration. I think, today priority of a customer is to get a right product at the right price and the right time. So people will opt for better filter solutions.?

What is the demand for filters with extended life in India?

Srivastava avers, ?Globally, the trend is downsizing of engine and creating more power. As the engine is improved it needs improved aggregates. There is pressure on increased life for filters. If earlier it clocked 250 hours, the demand is to double the performance hours. But to get those extra hours, you also need improved performance of lube or hydraulic oil, because it?s a system approach. If you need improvement in the filter other part also has to improve, and that is happening in India.? He says, ?Here in India we normally supply filters with OE specs. However, if a customer is specific on using filters that give extend life we have special range developed for that. The cost is definitely higher and it depends on the choice of the customer. In India customer who opts for such products are very less, not even 10 per cent.?

Speaking about the cost factor, Srivastava had this to say. ?Filter cost for equipment maintenance is very minimum, it is just below one per cent of the total cost. However, its impact on the overall maintenance cost is around 10 per cent, ie, it can either decrease of increase the total cost by 10 per cent. If you use good quality filter it can reduce your overall maintenance cost by 10 per cent and vice versa.?

According to him a strong interface between different stakeholders is very important. He says, ?The interface matters a lot and it is very strong in our case, either directly or through distributors. We have invested a lot on R&D, on engineering team, testing labs, so the product what we can offer, we can share the information with the customer. On the other hand, development of filters depends on many factors like filter efficiency, dust holding capacity, flow rate, pressure drop etc. So, when we develop a product Filter efficiency, dust holding capacity, flow rate, pressure drop etc, what sort of filter products is to be put in a machine is decided by the OEMs. While designing the engine the filter manufacturers and OEM together decide what sort of filters to be put into. Then the product development happens, then we test it and bench mark it. That is why our first priority is to meet or to exceed OE specifications.?

Kamal Prakash Srivastava, Sales Head-EAFM, South Asia, Donaldson India Filtration Systems
?In product development our priority is to meet or even exceed OE specifications.?
?We are planning to improve our capacity by more than 50 per cent within two years.?
Donaldson is one of the leaders in earthmoving, construction and mining equipment market and has one of the best product ranges available in the market for Indian and international make machines, says Terry Lee, Managing Director South Asia, Donaldson. Excerpts from the interview...

What is the planned capacity augmentation in India?
We are planning to improve our capacity by more than 50 per cent within two years. The current capacity cannot support the growing market so we are considering more than 50 per cent capacity increase plan by 2017. Leading the Pack What is your R&D spend?
We at Donaldson invest 2-3 per cent of our income in R&D activities. Donaldson keeps on investing a lot of money in R&D. More than 70 per cent employees in Donaldson are from mechanical engineering background. So Donaldson is a technology-driven and R&D-driven company. We have an engineering R&D department here for engines and industrial products.

In the development of filter media, what are the challenges you face?
Filtration media is one of our core technologies and Donaldson is very proud of that. Donaldson has internal media development group and pilot plants. We invest a lot to develop our own media and ask our suppliers to provide those media to others. We are very proud of those media developments in-house, and the challenge here in India is our media is premium one, for example, if compared in car, our media is BMW. There are differences with local media. Some of the customers in India are always cost-driven and they want low-cost products. We can make it but that won?t be the right product of our standard. So we always provide high quality products. The media cost is always a challenge to me to convince the OE customers and sell the product.

What is your outlook for 2015?
The overall environment is favourable to all the equipment manufacturers and market, but still the construction market and mining market are sluggish. So the question is how the equipment manufacturers can increase their production to survive. They will slowly grow up under the ?Make in India? programme to improve export.