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Alfing Kessler, the founding company that produces heavy-duty industrial forgings , is still in place. In 1950, Dr. Albert Grimminger, who was at that time the part of Alfing Kessler, acquired a stake in a small axle company. From there, the formation and great success story of Kessler & Co took place. Dr Grimminger never changed the name of the company, Kessler is still there even though it has no direct relation with the Kessler family or Alfing.

Now the company is around 75 years old, and is primarily into specialty off-highway axle including military axles. The company does not deal with conventional on-highway truck axles or commodity driveline parts. Kessler has also specialised gearboxes in its portfolio, but these are very different ones, which are used in an all-terrain crane for example. The product portfolio is too big to the extent that if you come to the Kessler’s shipment warehouse, you will find all axles, transfer-cases and gearboxes, every product is different from the one other.

What is the current market size for your products? Which are the segments that are driving demand for your products in the region?
When it comes to the company as a whole, Kessler deals in 15 primary applications. There are many more specialty applications in military and aerospace. In India, out of 15, we are doing about five to six.

In the mobile crane segment, you will find a lot of Kessler axles and various other products. Another application is the ground support equipment. These are the axles for the aircraft pushback tractors. There are also the axles for low-flow bus to bring passengers from the boarding gate to the aircraft and back.

Most of the global aircraft rescue firefighters have Kessler axles and T cases in them. These are not the conventional firefighters that we see in India. These are very different because the speed is too high; they not only pump the water but also run at a very high speed. Ground support is one of the primary applications.

Then we have all kinds of medium to heavy-duty forklifts, container handlers what we call in the totality Port equipment applications. These are reach stackers, heavy-duty forklifts, and the container handler as one part. The other parts are rubber tyre gantry cranes, harbour mobile cranes, straddle carriers, and automated guided vehicles. In this, we have been providing solutions for several decades.

The other important application in Kessler is mining, especially underground mining. We do have applications in surface mining and shallow mining trucks, but these are very heavy duty and super special in some very critical applications of the mining area.

The other Kessler application is agricultural machinery. Kessler does not deal in single reduction axles. They are meant to drive the vehicle at a speed. In agriculture, the company deals with combine harvesters. For eg: Sugar-feed harvester is very critical and heavy-duty in industrialised agricultural fields. For the driveline components that have failed in the technical purpose, Kessler pitches in. We do not mind giving one or two prototypes a year and are always keen to be a development partner of a new model or programme.

The military is another important application. Whether you need vehicle mobility, Kessler is always there. We also have Transfer case solutions for military applications. The last but not the least ,electric mobility is the segment we focus most from technology perspective. With our experience and our understanding of the system, we are also increasingly offering individually tailored electric drive system solutions for all applications and intend to further expand our portfolio in this segment.

Which new markets you are eyeing up to scale up your business in India and around the region?
From the lens of Kessler, the country is still not very industrialised by the nature of applications when compared to the industrial nations like China, Japan, Korea, Continental Europe, the USA, and others. However, we see a great future for our applications and products in India in long term.

We have a good history in the port equipment market and material handling. We are now getting some traction in mining applications. Because of one of the largest mining countries in the world, but we have a long way to go.

What is the new product that you are trying to bring in India?
The new product in India is a traditional product from Kessler. We have seen some interesting applications from our experience, which are not there in many developed countries. In prime moving applications, to transport a boiler, from one place to another. These very different applications are not available in many countries.

So what are the challenges that you are currently facing in India and globally?
At a global level, material cost explosion is what we are facing for almost a year now. It is hitting not only us but also our customers, OEMs. Because of this cost explosion, there is a disruption in the supply chain. Once the cost is increasing, you have to spend a lot of time in negotiating and re-negotiating – with both the suppliers and the customers. And we do all these efforts to keep our delivery performance at the highest level which is always key for us.

Because of Covid-19 [fortunately or unfortunately], the industries in which we deal with, have not been hit to the extent that it has others. In ports equipment and trucks, our industry is making record sales. If you go to China and ask for a brand-new stacker, it will get 12 months to get a new one, and you will have to pay a hundred percent in advance. If you have to get an axle from Kessler, we are working with the 2023 production plan. The year 2022 is just already booked.

Therefore, there is the material cost explosion, supply chain disruptions, and order board is not a problem. These are good problems to solve but they are all coming at the same time.

From the Indian perspective, the order book is still looking very good. In fact, we are breaking records this year. The challenge in India is the cost versus price. India being a commoditised market, every discussion starts with a cost. It does not start with the value, application, specification, quality, performance, reliability. We see this as a challenge and opportunity.

That is interesting! Still, you have over a 90 percent market share in the industry. I am sure there must be some scope for new innovations where you see the future. We have a presence and a full-fledged organisation in China, North America, and now India, we have a representative working in Japan and Korea. As a company, we are centralised, every engineering-designed application work is done in Germany. We do have a warehouse in North America and China, and the scale of shipments is very higher than those in other parts of Asia.

As for now, we have four plants located in Germany. Our four plants, one which was commissioned last year, are working in 100 per cent production. So far ideology was to keep things in one location and continue to support the programmes across the world, but in present we are also discussing to extend production to India or China.

So as mentioned earlier about China and the overall business on the Chinese supply chain side, do you have anything from China in operations?
A lot of commodity items like forgings and castings. We also buy those from India, Korea and Thailand. These are not of a major impact but are minor or reasonable disruptions. These disruptions are not hitting our supply chain very much. For example: earlier if the production lead time for our products used to be 12-16 weeks, because of disruption, it is around 18-24 weeks.

How did your company deal with the difficulties during the Covid period?
Because of Covid, most of the ports were busy transporting goods like vaccinations, masks, kits, PPE kits. So, most of these goods are loaded in the container and transported through the sea, which makes the seaports entirely busy. You will be surprised to know that the last two years were the busiest time for the ports. So one of the important industries for us is the ports. Stackers, containers, handlers, harbour mobile cranes, and all the other machines are working for 22 hours a day. This is the reason why there is a boom in the industry. Mining activities have not stopped regardless of Covid. Social distance norms are easily manageable in mining areas. Therefore, mining is largely untouched by this.

Similarly, many construction sites are also working all over the world. They are remotely located and follow the social distancing norms. What is impacted highly is the normal transportation, i.e. normal trucks, if you have a transferable job. So the transport industry was badly hit.

Can you share some technological advancements that have happened in the construction industry?
There is a huge transformation of digitalisation and electrification in the western world for everything. Not just the cars and vehicles, but also the tractors, stackers have turned electric.

All the port equipment, agricultural applications, material handling, and mobile crane applications will finally after some point in time be electric. You need a wheel; you need an axle to drive. So no one will re-invent a wheel. They are only reinventing the power source. In an electric vehicle, you have two main things; one is your storage of power, which is the battery the other one is the axle and motor, to take power to drive the motor. So we are not into storage, we are into propulsion system. Therefore, we provide an entire package, and our team in Germany deals with its entirety. And the company is investing heavily in this direction and we believe that we will play a major role in the electrified propulsion systems for off-highway machines in the future. However, for India, it is a long way to go.

What do you think about quality of safety and level of technology in India specially in construction and material handling Industry where is Kessler is dominant player globally?
When it is comes standards of safety, India is in its infancy, the several construction and material handling equipment are either not regulated or regulated through a century old standard, which are phased out even in some developing countries. We need to understand that a lot is driven due to cost pressure. Non implementation of latest global standards is also a key reason for poor safety levels at active sites. Safety standards and technology need to be upgraded side by side and is continuous process of evolution of any industry. Construction and material handling are no exception. As standards are not updated, level of containerisation and palettisation is among the lowest in emerging markets, forget Industrialised countries. This is one of the main reasons why total market size of warehousing equipment including forklifts is way behind than that of China, Singapore or even countries such as Thailand and Malaysia.

How do you see your company’s future in the next five years?
Our company works for the long term and five years are short term for us. We are exponentially multiplying our sales. We are not growing in percentages, mainly because of the huge variety of segments and the way the business is growing in this region. We see the multiplication of the applications. There is no chance that we are stabilising very soon.

We see the next 15-20 years to be very interesting for India. We are trying to scan India for our global sourcing model. Kessler is highly vertically integrated for non-proprietary components, but for proprietary items, we are trying to increase our dependency on India, because industrial GDP comes around 45-50 percent from the automotive industry. India has a decent automotive supply chain setup. We want to leverage the model of ancillaries to use for our off-highway kind of requirement.