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A report on the Organization and the

Industry based on the study


conducted at Schwing Stetter India
Pvt. Ltd., Chennai.

Prepared by,
Anoop T koshy
Manu R
(Students: DC school of Management&
Technology)
CHAPTER 1
INTRODUCTION

Indian Mining (earthmoving) and Construction Equipment Industry (ECE), is at a watershed in


its evolution and set to experience strong growth, spurred by the nation’s rapid economic
development. The industry spans a range of equipment for almost all construction/infrastructure
needs. It was sized about US$ 2.4- 2.6 billion for the year 2007 and has a growth of over 30%.
The exports growing at 30% is expected to be US$ 100-200 million by the end of 2010. The
sector is highly fragmented- top 6 of about 200 domestic manufacturers contributes 60% of
output. 71% of the sector comprises of public limited companies including PSU’s and 29%
private limited, or joint ventures including closely held private limited companies
.
With a wide production capacity base, India is perhaps the only developing country, which is
totally self- reliant in such highly sophisticated equipments. India has only a few, mainly medium
and large companies in the organized sector who manufacture these. The technology barriers are
high, especially with respect to mining equipment and therefore the role of SME’s is restricted to
manufacture of components and some sub-assemblies.

The key players in construction equipment industry in India are JCB India, Caterpillar, L&TK
with Komatsu, Telcon with Hitachi, Schwing Stetter, Action Construction Equipment Ltd.(ACE),
Escorts Construction Equipment Ltd.(ECEL), Bharat Earth Movers Ltd.(BEML) etc.

The ECE industry has a critical role to play in making India one of the world’s top five
economies by 2025. Construction equipment players have a unique opportunity to help realize
the potential of this sector and, in doing so, garner their share of the US$12-13 billion revenue
potential.

Schwing Stetter India Pvt. Ltd is a 100% subsidiary of M/s Schwing GmbH and belongs to
Schwing group of companies, market leaders in manufacturing equipments relating to
construction industry, more specifically for preparation, placement, and
transportation of concrete. It is a trend setter and a leader in supply of
concrete construction equipment in India.

The group manufactures Concrete mixing equipments (batching plant),truck mixers, concrete
pumps, shotcreting machines used for concreting tunnels and recycling plants for conversion of
waste concretes. They are the only group in the world with the whole range of equipments
pertaining to the process of concrete making. The group has its operations in 12 countries and has
global presence in more than 145 countries.
OBJECTIVES OF STUDY

PRIMARY OBJECTIVE

The main objective of the study is to get an idea about the whole organization as such and to

understand the nature of the industry.

SECONDARY OBJECTIVES

• To understand organization structure of the company and to get an idea about the various
departments and its functioning.
• To know how the key business processes are being carried out in a manufacturing
industry.

• To know about various policies and programs of the company.


Why Schwing Stetter?

SSIPL has been an important player in the Indian Construction Equipment Industry in
India with its major focus on the concrete manufacturing equipments. It has been a trend setter
ensuring best of their products and services to their customers- at all times. The company has
dedicated itself to a common quality policy wherein one of the focus points is building
confidence and value systems. Over the years, SSIPL has undergone many transformations in its
capacity, technology etc. under the leadership of Sri. A Sundaresan, with the stinted support of
qualified and dedicated staff.

SSI bagged the “BEST EUROPEAN COMPANY IN INDIA AWARD” in the SME Segment,
titled “IMPRESSA AWARD” conferred by the European Chamber of Commerce in the year
2004. Further, in the year 2006, the company bagged the ISO 9001-2000 Certificate .in the
recognition of the Quality Management Systems they follow in various spheres of activities of
the company. It has been able to achieve substantial growth over these years.

CHAPTERISATION
The report is prepared in five different chapters. The details of each chapter are as follows:

CHAPTER 1:- It gives an overall introduction about the study conducted. It includes a brief
account of the industry profile, company profile and the objectives of the study.

CHAPTER 2:- This chapter includes the industry profile. It is divided into two segments. The
first one deals with the global industry scenario and Indian industry picture in the second
segment. The major players in the industry are also discussed.

CHAPTER 3:- It covers the details about the company, the products and services offered
organization chart, operations and the departments.

CHAPTER 4:- This chapter gives the SWOT analysis of the company.

CHAPTER 5:- It is the conclusion part. It gives some details about the study, methodology,
findings and suggestions.

CHAPTER 2
INDUSTRY PROFILE
GLOBAL SCENARIO

Construction equipment is one of the key segments of any manufacturing sector. Construction
and mining equipment cover a variety of machinery such as hydraulic excavators, wheel loaders,
backhoe loaders, bull dozers, tippers, concrete mixers, wet mix plants, breakers, vibratory
compactors, scrapers, rope shovels etc. They perform a variety of functions like preparation of
ground, excavation, haulage of material, material handling, road construction etc. These
equipments are required for both construction and mining activity.

Global demand for construction machinery is projected to increase 5.3 percent annually through
2013. The developing Asia market, including India, China, Indonesia and South Korea, will see
the most rapid growth. Mixers, pavers and related equipments will be the fastest growing product
segment. In 2009 the world construction equipment demand was expected to reach $106 billion.
The growth will be supported by the expected continued expansion of emerging markets, with
high points including Eastern Europe, India and china. Within the triad (i.e., North America,
Japan, and Western Europe), North America is expected to maintain its lead in terms of both the
overall size of demand and growth potential, as the growth prospects for Japan and Western
Europe will be hampered by a combination of negative demographic and structural trends,
including aging populations and high level of regulation and taxation.

Future prospects remain very favorable in china, despite the recent weakening of the construction
equipment market due to tightening credit policies. Construction equipment demand will
continue to benefit from china’s aggressive industrialization efforts. While strong equipment
demand is usually foreshadowed by a combination of elements including favorable demographics
and burgeoning GDP performance. Eastern Europe is a somewhat different story, as the region’s
population is forecast to decline. However, based on the economic turnarounds experienced by
other countries joining the EU, expected infrastructure and economic improvements should
help to strongly increase construction equipment demand in the region.

Within the Triad, 2004 was a year of recovery and growth for North America, where expansion
in heavy construction equipment demand was driven by the explosive US real estate market.
Most competitors saw sales and operating profits improve after years of stagnation. Future
growth is expected to remain healthy in the region. Demand for construction equipment in Japan
will benefit from an improvement in fixed investment activity, but is expected to continue to be
undercut by soft public sector investment. Most West European markets are expected to post
only moderate construction equipment growth, with even strong-performing Spain experiencing
a tapering-off of demand. The strong euro-combined with an aging population, political turmoil
over the European Union itself, and other constraints- foreshadows moderate growth at best for
the region.

USA is the largest mining and construction equipment market in the world followed by China
(around 0.3 million units) and Europe (around 0.2 million units). The global Mining and
Construction Equipment (MCE) Industry has been on an upswing since 2003-04 and has grown
by over 15% annually until Q3, 2008-09. The growth was more pronounced in and was mainly
driven by the fast growing BRIC nations of China and India. The size of the MCE market in
emerging economies has also expanded significantly and now accounts for 50% of the global
market as against just 35% in 2004. The Indian market grew by over 30% annually during this
period but on a significantly lower base than in other major countries. The key growth drivers
were strong economic development, government and private investments in infrastructure, large
government projects like road building, high commodity prices (supporting mining activity), the
booming real estate industry and growing levels of mechanization.

The global MCE industry experienced a contraction in Q3 2008-09 as a result of reduced


construction activity, especially in the real estate segment; slowdown in mining activity and a
virtual standstill in equipment financing in the aftermath of the economic meltdown towards the
end of Q2, 2008-09. In 2008-09, the global MCE industry is estimated to have fallen by over
20%, mainly on account of a 38% fall in global demand for construction equipment while the
demand for mining equipment improved in little geographies. The fall in demand was led
by sharp declines in the key markets of Europe, Japan and North America.
Barring certain markets like china, the global CE industry continued to fall in
the first nine months of 2009-10 as well, although the magnitude of global
decline slowed down to around 4% in Q3, 2009-10. The mining industry on
the other hand has shown stronger signs of recovery in Q3, 2009-10, as
commodity prices started inching upwards. In addition to china, where there
has been a full scale recovery of demand supported by fiscal stimulus and
advancement in large-scale infrastructure development, markets like
Australia, Brazil, India, Indonesia, and Thailand have shown signs of a more
gradual recovery. Among the developed countries, the Japanese market
witnessed full usage of rental equipment in Q3, 2009-10. However, a lack of
consumer confidence in the prospects resulted in a weak demand for new
equipment. Normally, full usage of rental equipment is a precursor for fresh
demand.

WORLD CONSTRUCTION EQUIPMENT DEMAND

(Billion dollars)

Item 1999 2004 2009


World heavy construction
Equipment 70.7 81.4 105.9
North America 23.5 28.1 35.8
Western Europe 17.4 17.6 20.3
Asia /pacific 20.8 24.9 35.6
Other regions 9.0 10.8 14.2

(Source: study by The Freedonia Group, Inc.)

INDIAN SCENARIO
INTRODUCTION

The upswing in the Indian Economy has enhanced the demand for the construction and material
handling equipments. The demand for construction and material handling equipments is
correlated with the growth of other segments like Infrastructure Construction, Ports, Pipelines,
Roads, Steel, Power Projects, Mining, Building construction etc. Increase in foreign investment
(FDI/FII) and technology has led to a tremendous growth in requirement of mobile cranes and
construction equipments. The size of Indian Construction Industry is over US$25 billion and it
accounts for over 6.5% of GDP. With the GDP growth likely to increase going forward, the
demand for construction equipment will continue to grow with core sectors like construction,
cement, steel, chemicals, petroleum, mining etc.

India’s Construction Equipment Industry- Highlights

The industry spans a range of equipments for almost all construction/ infrastructure needs. It
sizes about US$ 25 billion, with a growth of over 30%. The exports are growing at 30%,
expected to be US$ 100-200 million by 2010. The sector is highly fragmented- top 6 of about
200 domestic manufacturers contributes 60% of output. Products and spare parts constitute the
bulk of the industry. Service segment is still nascent and presents good opportunity for growth.
Around 71 percent of the sector comprises of public limited companies including PSU’s and 29
percent private limited, or joint ventures including closely held private limited companies. The
unorganized sector contributes about 15% by value, though the majority of players belong here.

The key segments that constitute the construction equipment industry in India are:

• Earth Moving Equipments


• Material Handling Equipments
• Construction Vehicles
• Concrete equipment
• Material Preparation
• Tunneling & Drilling Equipment
• Road Construction Equipment

And there are a range of products in each segment.

The industry has a wide product range:

EARTH MOVING CONCRETE


EQUIPMENTS EQUIPMENT
Backhoe Loaders Concrete Breakers
Excavators Paver Finisher
Loaders Concrete Batching Plant
Bulldozers Concrete Pumps
Wheeled loading Concrete Mixers
Shovels Hot mix plants
Wheel loaders
Motor graders
Motor Scrappers
Dump trucks
Wheel dozers
Draglines

MATERIAL HANDLING MATERIAL ROAD CONSTRUCTION


EQUIPMENT PREPARATION EQUIPMENT
Telescopic Handlers Crushing Plant Compaction Equip
Crawler Cranes Jaw Crushers Vibratory Rollers
Mobile Cranes Pavers
Truck Cranes
Forklifts
Pick & Carry Cranes
Slew Cranes
Tower Cranes
Conveyors

CONSTRUCTION TUNNELLING &


VEHICLES DRILLING
Dumpers Rotary/DTH Drilling
Articulated Haulers Hammer Track Drill
Boring Equipment
Demolition
Equipment

However, a few segments dominate the industry in size and volumes.

structure

5%

12%

earth moving equip

7% material handling
concrete equip

6% road construction equip


57% tunnelling &drilling
material preparation
13%

Construction Equipment Industry Structure


Birth of Indian Construction Equipment Industry

The Evolution of Indian Construction Equipment (CE) Industry can be broken up in a time frame
of five decade on bases of Industry trends, markets and products.

Year 1960- 70’s

Industry trend- domestic production began with setting up of BEML.


Market- government being the main producer and buyer
Products - dozers, dumpers, graders, scrapers, graders etc.

Year 1980’s
Industry trend- private sector entering the sector with likes of L&T, Telecom
Market- growth of market due to increase in mining/infrastructure activities
Products - hydraulic excavators, mining equipment etc.

Year 1990’s

Industry trend- joint venture with global player


Market- liberalization of economy with increase in construction activities
Products- pavers, loaders, backhoe etc

Year 2000’s

Industry trend- demand moving northward leading to capacity doubling


Market- infrastructure development gains momentum with investments pouring
Products- equipments of latest technology with increase load handling capacity

Current scenario & future

Industry trend- sectorial reforms and boost to infrastructure development


Market- increase in budgetary allocation, increase in international finance institution
funding for infrastructure.
Products- emerging as a manufacturing hub for designing and developing products for
global markets

Prior to the 1960’s domestic requirements of mining and construction equipment were entirely
met by imports.
Domestic production began in 1964 with the setting up of Bharat Earthmovers Ltd.(BEML), a
public sector unit of the Ministry of Defense, at Kolar in South India to manufacture dozers,
dumpers, graders, scrapers, etc. for defense requirements under license from Le Torneau
Westinghouse, USA and Komatsu, Japan. In the private sector, the Hindustan Motors’
Earthmoving Equipment Division was established in1969 at Tiruvallur, near Chennai with
technical collaboration from Terex, UK for manufacture of wheel loaders, dozers & dumpers.
This factory has since been taken over by Caterpillar for their Indian operations. The machines
manufactured by
Caterpillar in the Tiruvallur factory are marketed by TIL and GMMCO.
In 1974, L&T started manufacturing hydraulic excavators under license from Poclain, France. In
1980 and 1981, two more units, Telcon and Escorts JCB commenced manufacture of hydraulic
excavators (under license from Hitachi, Japan) and backhoe
Loaders (under license from JCB, UK) respectively. Escorts JCB has been taken over by JC
Bamford Excavators Ltd. U.K. in 2003 and is now called JCB India Ltd.
Most of the technology leaders like Case, Caterpillar, Hitachi, Ingersoll-Rand, JCB, John Deere,
Joy Mining Machinery, Komatsu, Lieberr, Poclain, Terex, Volvo are present in India as joint
venture companies, or have set up their manufacturing
facilities, or marketing companies.
The industry has made substantial investments in the recent past for setting up manufacturing
bases, despite small volumes and uneconomic scales of production compared to global standards.

Structure of the sector


71% of the sector comprises of public limited companies including PSU’s and 29% private
limited, or joint ventures including closely held private limited companies.

75% of the companies manufacturing in India were involved in the entire range of activities like
design and engineering, manufacturing, erection, servicing, and commissioning. There are only a
few companies who act as selling agents for international players. There are others who
manufacture and also import complete equipment or in SKD condition from their principals
abroad and market them.

Since each piece of the equipment in this product category has substantial value, a number of
companies have a turnover of over 100 crores and the larger ones have a turnover above Rs.1000
crores. The technology barriers have made the industry less fragmented in the mining machinery
sector whereas it is fragmented in the road construction equipment and the material-handling
segments. The international trend in the earthmoving and mining segment is one of
consolidation. This trend is also beginning to be seen in India. Some international companies are
looking at the prospects of enhancing their market presence based on higher investment in
mining and infrastructure and also using their Indian operations to meet demand in South and
South East Asia

Technology
The technology leaders in the construction equipment sector are: Komatsu, Caterpillar, Hitachi,
Terex, Volvo, Case, Ingersoll-Rand, HAMM, Bomag, John Deere, JCB, Poclain, Bitelli,
Kobelco, Hyundai and Daewoo. Except for the last 3, all the other companies are present in India
either as joint ventures, or have set up their own manufacturing facilities, or marketing
companies.

Exports

Exports currently constitute 2-3% of India’s construction equipment industry. Many factors
contributed to the low level of exports, including a lack of complete product range, the need to
avoid competition with JV partners and relatively low levels of technology & quality. But now,
exports are expected to grow rapidly. Increased outsourcing of manufacturing to low-cost
countries and improvements in technology and product range are expected to boost Infrastructure
Equipment (IE) exports from India.

New MNC entrants setting up base in India:


With MCE industry volumes of around 40,000-45,000 units per annum and an estimated turnover
of US$2.6-3.1 billion, the Indian market is relatively small as compared to the global market that
is estimated at over $75 billion. Nevertheless, many international OEMs have indicated plans of
setting up manufacturing facilities in India owing to its good growth prospects and slack demand
in the traditional developed markets. Some of the new entrants in the past 3-4 years were Japan’s
excavator major Kobelco and ME company Komatsu; CE and farming equipment major, John
Deere (USA) in JV with Ashok Leyland Limited; excavator & CE company Sany & Liugong
(China) and MCE majors Hyundai and Doosan (Korea). Further, existing participants like
Caterpillar and excavator manufacturer Telco construction Equipment Company Limited
(Telcon) are either adding to their domestic capacities or increasing their product portfolio. With
the incremental capacities and new entrants, the industry is expected to become more competitive
and fragmented. However, growing mechanization and large infrastructural projects proposed in
the country indicate the potential to absorb these new capacities. The entry of global MCE
manufacturers has also facilitated product upgrades in the growing Indian market.

Limited investments in Research & Development by MCE manufactures in India:

MCE companies with MNC parentage typically have depended on parental support for product
development and have made minimal investments on Research and Development (R&D) -
largely limited to homologation of the global products for Indian conditions. Further, the need for
technology investments specific to the Indian market is relatively low, as the requirements for
emission/noise control in Indian off-highway vehicles continues to be basic as compared to the
developed markets. The Indian MCE industry is currently BSII compliant, with the next
transition expected in April 2011. Developed nations like Japan and even emerging markets like
China have already moved to cutting edge technology of hybrids and EV (electric vehicles) to
increase productivity and comply with stringent emission/ noise control norms. With the
increasing presence of international companies/products in India, Indian market participants have
started to invest into R&D to match the international quality standards. Deeper understanding of
the market and the requirement for application/topography specific products has further raised
the need for increased R&D by participants in the Indian market.
Growth drivers for the industry

India has demonstrated strong growth across all sectors, with Indian economy moving in top gear
we are set to achieve exponential growth in coming years. The Indian Infrastructure development
has been on a high agenda for the Indian government over past few years as it is a key driver for

the overall economy development.

Infrastructure thrust
Attractive investment options emerge in the following areas

Earthmoving Equipment, Road Construction Equipment and Material Handling


Equipment appear the most attractive product segment, in terms of size and future growth
potential.
However, the Indian CE market also presents other areas that are nascent, but which have
high growth potential
• Engineering Design Services
• Equipment Rentals

• Repair & Refurbishing of used equipment

Used and rental equipment markets are still in their nascent stages:

While there is good potential for used equipment in India, the market size of which is estimated
at about three times the primary market, India does not have an established common platform for
trading in used equipment.

Again, the current rental penetration in India at around 7-8% remains low as compared to the
global standards of 50-80%. An average of 30% of the equipments sold in Europe and over 60%
in the United Kingdom are to rental operators. A robust rental market enables reduction in
investments in projects by outsourcing the equipment requirement (including spares and services)
and improving capacity utilization of equipment. The key equipment in the rental fleet in India
currently is backhoe loaders, pick-and-carry (PNC) cranes, excavators, motor graders and
vibratory compactors.
While a number of organized equipment banks like Quippo Infrastructure Equipment Limited,
Sanghvi Movers Limited (for cranes), ABG Infralogistics Limited, GMMCO Limited & TIL
Limited (TIL-for Caterpillar equipment) have entered the fray with large fleets (of over 100
equipments), the market continues to be serviced mainly by small fleet owners with less than 10
equipment each. However, there are various structural/ operational concerns that need to be
resolved for the Indian equipment rental markets to evolve. Concerns include lack of
synchronization of interstate tax policies (on movement of equipment between states) and
logistics of the equipment. Further, the dominance of unorganized market participants that
operate on cash transactions (on rentals, thereby avoiding taxes and enjoying an unfair advantage
to the larger rental operators) prevents the evolution of a more organized system.
With the large infrastructure investment proposed over the next few years, demand for rental
equipment is expected to see a large growth over the medium term. Globally, a number of OEMs
like Caterpillar Inc, JC Bamford, UK and Volvo are actively involved in the equipment rental
business, an area that has not caught on in India as yet.

Industry players would need to address the following key success factors:

Outlook- A strong positive


The industry has been on an upturn supported by increased financing availability; step-up in
infrastructural investments and pick-up in demand for commodities globally. Large proposed
investment over the next several years in infrastructure (ports, airports, roads) has the potential to
sustain the growing demand for CE. The Eleventh Plan commission (2007-12) envisages the
need for an infrastructure investment of over US$ 155 billion for development of roads, bridges,
railways, ports and airports and over US$ 2 billion in mining. According to the Economic Survey
of 2009-10, the Ministry of Road Transport & Highways has set a target of completion of 20 km
of National highways per day, translating to over 35,000 km during the period from 2008-09 to
2013-14. The NHAI has formulated closely monitored work plans for awarding 12,000 km of
projects each during the years 2009-10 and 2010-11. The Special Accelerated Road Development
Programme in the North-eastern Region (SARDP-NE) envisages two / four-laning of about 5,184
km of National Highways and two-laning / improvement of about 4,756 km of State roads. These
are, but a few of the large infrastructure initiatives that are currently under way in the country.

India’s booming infrastructure sector is fuelling demand for all kinds of construction equipments.
With the infrastructure and construction sector undergoing dramatic changes- sky scrapers being
built in cities, kilometers of expressways- builders and contractors are acquiring sophisticated
equipments to execute multi-million-dollar projects. For CE industry, this is indeed good news,
as it paves way for an exciting future.

CHAPTER-3

COMPANY PROFILE
Schwing Stetter India Pvt. Ltd. (SSIPL) is a wholly-owned subsidiary of Schwing Gmbh,
Germany. The operations of SSIPL consist of manufacture and supply of equipment and spare
parts relating to handling of ready mix concrete (RMC), namely, concrete mixers, concrete
pumps, batching plants and recycling plants. SSIPL has three manufacturing plants in Chennai
and 12 branches across India. Schwing Group is one of the world’s leading manufacturers of
RMC equipment such as batching plants, truck mixers, concrete pumps, shotcreting machines
and recycling plants. The group has operations in 12 countries and has presence in more than 100
countries. The Company was incorporated as a Private Limited Company in the month of June,
1998 and the necessary permission was obtained from the Secretariat for Industrial Assistance,
Ministry of Industries, and Government of India for 100% foreign holding.

The entire product ranges of Schwing group are being sold for the last 24years in India either
through direct imports by the customers or through their erstwhile distributors. The group is
known for its quality products and has been recognized as one of the best manufacturers of these
equipments. Looking at the Design and Software potential in India, the group Management has
decided to off-load the group’s Design and development
Work and software development work to the Indian company and accordingly SSI has set up a
Software Technology Park (STP) unit.
SSI has branch offices and stocking centers at various strategic locations allover India to cater to
the requirements of customers. The company has also diversified its activities to undertake
turnkey projects under which the entire setting up of concrete plants as per requirements of the
customer is undertaken. SSI has Resident Engineers stationed at Surat, Jamnagar, Baroda,
Mandi,Kota, Panipat, Jaipur, Lucknow, Coimbatore, Vizag, Anantpur, Subansri &Guwahati. SSI
is organized into plants / branch offices, and from an administrative standpoint the company’s
Marketing & Sales function is organized into sales offices.

SSI is headed by Mr. Gerhard Schwing, the Chairman based in Germany. The day-to-day
operations of the company are in the able hands of Mr. A.Sundaresan, Managing Director,
assisted by a team of experienced professionals.

SSI completed construction of the new factory at Irungatukottai and commenced its production in
Nov ‘01. The investment in the Project is approx. Rs.14 crore. Just after 4 years of its launching
commercial production, in 2004, the Company embarked on an expansion project and doubled
the capacity, with an additional investment of Rs.18 crore.

SSI bagged the “BEST EUROPEAN COMPANY IN INDIA AWARD” in the SME Segment,
titled “IMPRESSA AWARD” conferred by the European Chamber of Commerce in the year
2004.

In 2005, SSI received a prestigious award for “Outstanding contribution towards Indo-German
economic relations” awarded by Indo German Chamber of Commerce & IMEA award for “Best
practices on Customer training for service” awarded by M/s Frost & Sullivan.

In 2006, SSI launched another big expansion programme, by starting a new factory in SIPCOT,
dedicated for the manufacture of concrete Batching &Mixing plants of various capacity levels,
incurring an investment of more thanRs.27 Crores. The facility is being utilized to its fullest
capacity, and unpublished statistics reckon that SSIPL is the largest producer of batching plants
in the world.

Further, in the year 2006, the company bagged the ISO 9001 – 2000Certificate, in recognition of
the Quality Management Systems we follow in various spheres of activities of the company. The
company has entered the Export market as well and export of various equipments is being made
to SCHWING group companies as well as other direct customers abroad. The quality of the
equipments has been well appreciated.

The market appears good for the Infrastructure Industry and considering the thrust on mammoth
Infrastructure development in India, SSI is confident of achieving substantial growth in the years
to come with better demand for quality equipments. The history of the Company’s turnover
growth is given below:

Year Turnover
(in Rs crore)
(incl. excise duty)
2000 27
2001 47
2002 94
2003 118
2004 180
2005 290
2006 539
2007 803

Schwing stetter India Pvt. Ltd received six sigma compliance certification in 2006 for all its key
business processes from M/s.Nathan and Nathan consultants Pvt. Ltd. Six Sigma is a quality
improvement methodology structured to reduce product or service failure rates to a negligible
level. The Six Sigma process encompasses all aspects of a business, including management,
service delivery, design, production and customer satisfaction

The visionary of SSI

On March 17, 1934, master mechanic Friedrich Wilhelm Schwing, then 25


years old, founded his handcraft enterprise, whose products quickly found buyers in the mining
industry, in road construction and in the building industry.

As early as in the 1930s, the Schwing Company began to devote itself to the
development of concrete construction machinery.
When post – war reconstruction began in 1945, this was also the greatest challenge ever
to the construction industry and to all manufacturers of construction machinery.

Friedrich Wilhelm Schwing was fascinated by the technical challenge of designing


construction winches, free-standing hoists or cranes. Many Schwing developments and patents
were pioneering achievements, some of which continue to define the state of the art to this day.

At the beginning of the 1950s, concrete began to conquer the world’s jobsites. The
negative aspects of concreting with cranes and buckets quickly brought about the demand for
continuous concrete transport. In 1957, Schwing commissioned the first oil-hydraulic twin
cylinder concrete pump ready for series production. The first mobile truck-mounted concrete
pump followed in 1965, with a placing boom being added to the pump only three years later. The
quick pace of development in the following years is demonstrated by the fact that already in 1973
SCHWING built truck-mounted concrete pumps with a 45-metre placing boom.

In 1980 the founder Friedrich Wilhelm Schwing entrusted his two sons with the management of
the company. Soon afterwards, Schwing took over Stetter GMBH. With this takeover Schwing
had found an ideal supplement to its own range of products and become a complete system
supplier .Since 1982, Schwing Stetter have been supplying the whole spectrum of concrete and
are today the leading systems manufacturer for concrete construction machine worldwide. With
their high excellent resale value, these products are a guarantee of success for customers.

With the foundation of branches and production facilities worldwide, the company came
in with a market- and customer oriented strategy while never losing its sense of proportion .The
company has production facilities in Germany, Austria, Brazil, USA, Russia, China and India
and branches in 12 locations throughout India and 15 locations in the rest of the world. The
company also has more than 100 sales and service centers across the world. No one else feels so
close to its customers as SCHWING STETTER, worldwide.

After 70 years, the foresight of a one-stop supplier has long become reality. Since 2001,
the family-owned company has been run by Gerhard Schwing alone. Under his leadership, the
company is now tackling new visions with concrete strategies. Today’s success is the proof that
SCHWING has the right solutions for the entrepreneurial challenges of the future.
Schwing Subsidiaries
1971 – SCHWING GmbH, St. Stefan, Austria

1974 – SCHWING Hyharulik Elektronik GmbH, Herne, Germany

1974 – SCHWING America, Inc., White Bear Lake, Minnesota, USA

1976 – SCHWING Equipamentos Industriais Ltda., Sao Paulo, Brazil

1982 – Take-over of Stetter GmbH, Memmingen, Germany


1982 – SCHWING-Stetter S.A., Souffelweyersheim, France

1982 – SCHWING-Stetter B.V., Raamsdonksveer, Netherlands

1982 – SCHWING-Stetter Baumaschinenwerk, St. Petersburg, Russia

1993 – SCHWING-Stetter Ostrava s.r.o., Ostrava, Czech Republic

1994 – SCHWING Shanghai Machinery Company Ltd., Shanghai, China

1997 – SCHWING GmbH Korea, Seoul, Korea

1998 – M/S SCHWING-Stetter India Pvt. Ltd., Chennai, India

1999 – SCHWING-Stetter Skandinavien AB, Molndal, Sweden

(Gmbh- Gesellschaft mit beschrankter Haftung, basically means a company with


limited liability or limited company)

Business and competitive position

Strong parent support by virtue of being a subsidiary of Schwing Gmbh, which is a leading
company in the global construction equipment industry

SSIPL is a wholly-owned subsidiary of Schwing Gmbh, Germany, which is a leading company


in the global construction equipment industry. Schwing Gmbh has 14 subsidiaries across the
world out of which 8 including SSIPL have manufacturing facilities. SSIPL is one of the key
subsidiaries for the group, as it caters to the growing market in India. SSIPL contributes to
around 14%-15% of the turnover of the group.
Being a subsidiary of Schwing Gmbh, SSIPL enjoys several key advantages such as:

Technology development: All the innovations, patents, designs and developments are
carried out by Schwing Gmbh and SSIPL makes modifications in product designs in order to
cater to the requirements of local customers. Consequently, the customers get products that
adhere to the global quality standards while also fulfilling the local requirements. Further, some
of the designs and technologies specific to Indian requirements are developed jointly by Schwing
Gmbh and SSIPL.

Training support: Schwing Gmbh also provides training to the engineers of SSIPL and helps
them in product development to cater to local market requirements. Training support from the
parent has enabled SSIPL to provide superior after-sales services to its customers.

Brand image: Schwing Group has developed a well-recognized brand in the construction
equipment industry across the globe by maintaining consistent quality standards and providing
efficient after-sales service. The strong brand image of the parent provides a competitive edge to
SSIPL in the Indian market.

The importance of SSIPL in Schwing group is also established from the fact that it has plans to
make SSIPL as its manufacturing hub for 17 m boom pumps that are used for the construction of
low-rise buildings. SSIPL will also manufacture truck mixer components for the US market.
(Source: ICRA Credit Perspective, SSIPL, June 2009)

Good brand recognition has enabled the company to establish a strong market position

SSIPL has developed a strong brand image and garnered a significant market share in the RMC
handling equipment segment. The leadership position of SSIPL is supported by its superior
product quality; branding support from the parent and an extensive distribution and service
network. The market position of the company is also evident from a significant share of revenues
coming from repeat client orders.

Focus on a single-product domain enables SSIPL to stay ahead of competition

SSIPL faces competition from different companies in different product categories. However, it
has been able to garner a significant market share primarily because of its focused approach on
concrete equipment. Being a provider of all the construction equipment related to concrete,
SSIPL enjoys a better position than its competitors. Further, the company enjoys a high level of
brand loyalty and has well-established relationships with its customers.

Diversified and reputed client base

SSIPL has developed a well-reputed customer base over the years. The company largely services
construction companies, RMC suppliers and equipment leasing companies. Of the three
categories, construction companies contribute to 65% of revenues. The major customers of
SSIPL include Gammon India Limited, Soma Enterprises Ltd, Larsen & Toubro Limited and
M/s. Lafarge Aggregates & Concretes India Pvt. Ltd. A significant portion of its business comes
from repeated client orders, thereby reflecting the brand loyalty enjoyed by the company.

Well-established distribution network and service centres enhance the marketability of the
products

SSIPL has opened several branch offices/service centres across India to provide easy access to its
customers. This well-established network of service centres ensures timely service to the
customers and timely availability of spares, thereby enhancing the value of its products to its
customers. Further, SSIPL provides the services of trained operators to its customers so as to
reduce the risks of poor handling/maintenance of equipment.

The network of service centres could help obtain annual maintenance contracts that offer high
margins and ensure a steady flow of revenues. The company plans to open more service centres
to widen its reach to its customers.

Vulnerability to fluctuations in raw material prices

The key raw material components used by the company include drum, hydraulic components,
engines, screw conveyor and BHS mixers. Some components like hydraulic components and
specialized steel components are imported from the parent company/vendors of the parent
company. The remaining raw materials are sourced locally.

As per the procurement policy of the company, imported raw material is bought in bulk
quantities to meet the requirements of the production schedule of the next few months. However,
local purchases are made in small quantities at regular intervals in line with the flow of
production.

Financial profile

Operating income buoyed by booming real estate and infrastructure sector

The operating income of the company has witnessed a significant uptrend during the last few
years, given the boom in real estate and infrastructure industry in India. The company also scaled
up its production facilities in order to meet the increasing demand for its products. In CY 2008,
the growth in turnover slowed down because of slowdown faced by the real estate and
construction sector. The operating income in CY 2008 grew to Rs. 7575 million from Rs. 7082
million in CY 2007.

Operating income
(INR million, approx)
CY 2005 2600
CY2006 4900
CY 2007 7000
CY 2008 7600

Increasing economies of scale boosted the profitability of the company

The profitability of the company has improved significantly over past few years. The operating
margins improved to 14.7% in CY 2007 from 10.6% in CY 2005 primarily on account of
increased economies of scale. In CY 2008, the company witnessed a marginal decline in
operating margins to 14.1% on account of increase in raw material prices and pressure on
realizations.

High inventory holding period results in high working capital intensity


The working capital intensity of SSIPL as measured by net working capital/operating income is
high at 36.3% in CY 2008 mainly on account of a high inventory holding period and low
turnover. The increase in working capital intensity also resulted in negative cash flows from
operations over the past few years. ICRA expects the working capital intensity to improve on the
back of the steps initiated by the management to improve inventory management.

Equity infusion and high internal accruals maintained the gearing at moderate
levels

The gearing of the company was high at 2.75 times as on December 31, 2005 because of debt-
funded capex. Nevertheless, the gearing came down to 1.13 times in CY 2008 with further equity
infusion, internal accruals and repayment of the term loan. However, the debt repayment risks are
partially mitigated by the fact that the debt is mainly to fund working capital.

Profile of competitors:

Competitor Profile
Greaves cotton limited Greaves cotton limited is present in several product
domains such as power generators, engines, pump sets
and construction equipments. It competes with SSIPL
mainly in the concrete pumps segment.
Sany Heavy Industries SHIIPL is mainly engaged in R&D, manufacture and
India Private Limited distribution of engineering machinery, with the products
covering 25 categories and above 120 types such as
construction, road construction, and hoisting machinery.
The leading products include the concrete pump, truck
mounted concrete pump, concrete batching plant, asphalt
batching plant, roller, asphalt paver, motor grader, truck
crane and crawler crane.
Revathi Equipment Limited Revathi equipment limited is primarily a drilling
equipment manufacturer. The company is also expanding
its presence in the concrete equipment segment. The
company has a low market share in the concrete
equipment segment.
Aquaries engineers Private It is a manufacture and exporter of concrete pumps and
Limited batching plant. Aquaries also represents Gomaco, USA
for its complete range of slip form pavers and carbing
machines. It competes with SSIPL in the separate placing
boom pumps segment.

Putzmeister Concrete It is a subsidiary of Putzmeister Holding GmbH,


Machinery Pvt. Ltd. Germany. The company is present in the entire concrete
equipment segment.

ORGANIZATION CHARTS

Managerial

Managing
Director

Secretary 1
VP GM
CFCFO&CS COO MFG& PURCHA
ENGG SE

2 3 4 5

CFO- CHIEF FINANCE OFFICER


COO- CHIEF OPERATING OFFICER
VP- VICE PRESIDENT GM- GENERAL MANAGER

Administration & personnel, HRD, Stores, Logistics and HR committee

HRD
HR Admin Store Logisti
Committe & s cs
e Personnel
Person Cantee Transpo SHE
Securit
nel n y rt

Finance & Accounts

Secreta
ry

Corporat
IT F&A e
Banking
SA HW
P

Audit Cash & Direct Payables &


Bank Taxation Assets

Excis Accounts & Inventory &


Desig e Finance Production
n

Sales & Marketing, Service, Commercial and Training

Training Marketin Spares Commerc


Service g ial
Regional
Heads

Regional Admin
Sales & Accts
Offices Servic
e

Production, QC, Design, Projects and Maintenance

QC Production
Design Mfg & Engg Maintena Projec
nce ts
Concrete Concrete
Batching pumps
mixers Plant

Strategic Purchase

Secretary

Vendor
Strategic Ongoing
development
Purchase Purchase
PRODUCTS & SERVICES OFFERED

Over the years, SCHWING Stetter India has been responding to the changing needs of
customers with a wide range of Construction Equipment Machineries, which are
contemporaneous in design.

The various products and services offered are:

Equipments-

• Batching plants

• Concrete transit mixtures

• Concrete pumps

• Spares

Services-

• Mounting the transit mixture on the truck chassis

• Minor repairs of sub-assemblies


• Warranty as well as post warranty service

• Major repairs

• Second-hand sales of an old equipment or part

Training: A separate department for training runs training Center in Chennai. The training is
meant for
• Customer representatives
• Newly recruited staff
• Retraining of existing staff
• Outsiders

The various products manufactured at SSI are:

• Concrete Batching plants

• Transit Mixers

• Concrete Pumps

• Shotcreting machines used for concreting tunnels

• Recycling plants for conversion of waste concretes.


Transit Mixer
Concrete Pumps

Batching plant
Recycling plants

SSI has revolutionized the construction methods with its superior technology, highest quality
standards and excellent after sales service and spares backup provided at all nook and corners of
India. The presence of Schwing group in India is one of the sweetest things that could happen in
the Indian construction industry. SSI now offers total concrete solutions to all its customers with
its wide range of equipments and highly skilled technical team.

About the products:

Batching plants

A plant containing the equipment to measure, by weight or volume, the quantities of


different materials required to make a correct mix of concrete.
Our batching plants are fully computerized and state-of-the art. These plants were
originally designed in Germany and have further been modified at SSI for adaptations to Indian
conditions. The technology has been tried and tested with over 30 plants in operation in the
country. The product has been well received in the construction market.
The different models available are: CP 30, CP18, M1, M2, M2.25, H1, H1.25, H2, H2.25, H3,
H4, and H6. The high end product costs around 1.5 crores.

Concrete pumps

A concrete pump is a tool for transferring liquid concrete by pumping. These machines
pump concrete easily and efficiently to heights of up to almost half a kilometre, or over distances
up to nearly 3 kilometres.

70 years of SCHWING experience in the field has led to concentration into each and every
machine that leaves the factory, and the results clearly speak for themselves - in terms of,
• Low wear & tear
• Low running costs and,
• Superb overall service lines.
From one pump customers to the largest fleets in the world, Schwing truly brings Solutions,
Value and Success to the industry.
Transit Mixer

A transit mixer is a truck mounted drum with a capacity to carry certain quantity of
concrete at a time. The Stetter GmbH, Germany is a pioneer in the field of transit mixers. The
first Stetter transit mixer was introduced in the year 1958. Stetter GmbH belongs to the Schwing
group of companies.

There are several advantages of SCHWING Stetter transit mixers –


• Fast filling
• Fast and smooth discharging
• Best mixing results
• Development according to ecological and economical requests
• Worldwide service network

Quality and Safety, Health and Environment policy.

Quality policy

Ensure utmost customer satisfaction by manufacturing and supplying equipments of international


quality standards and to provide excellent customer support.

Achieve and maintain market leadership and be a trendsetter by strictly adhering to best
engineering practices.

Provide congenial working atmosphere, clean and green work environment.

Upgrade human skills, build confidence and value system.

Improve continually in quality, service and timely deliveries to exceed customer expectation
Safety, health and environment policy

Schwing Stetter India is committed to providing a safe and healthy workplace and protecting and
conserving the environment. These core values are present in our operations, products and
services and demonstrate our commitment to being a responsible corporate citizen.

Achieving excellence in Safety, Health and environment matters is a plant wide responsibility
and it covers all the activities in each plant either directly or indirectly involved with the
manufacture of Construction equipments like Concrete pumps, Transit mixers, Batching plants,
Recycling units and activities at Chennai Service Center.

Responsible and effective standards and work practices that prevent risk to human health and
the environment add significant value. This value is created by reducing risks, liabilities and
costs, protecting our employees, exceeding expectations from our customers and committed to
comply with legal and other requirements concerning safety, health and environmental matters
that involve our manufacturing facilities and service center.

SSI implements a Safety, Health and Environment Management System (SHEMS) that is
consistent with the OHSAS 18001 Health and Safety Management System and the ISO 14001
International standard. SHEMS is designed to identify, evaluate and control significant
environmental aspects and health and safety risks. SHEMS is the foundation for continual
improvement for all plants. This improvement shall be measured by objectives and targets that
include:

1. Providing a safe workplace for all employees with zero tolerance for unsafe acts or unsafe
conditions
2. Providing employees and the contractors with training and information to enable them to
fulfill their responsibilities and duties in a safe, efficient, health, hygiene and
environmental friendly manner.
3. Achieving excellence through systematic safe, health and environment processes in the
areas of product design, development and manufacturing.
4. Developing and implementing procedures to deal promptly and effectively with fire,
security, environmental, emergencies
5. Reducing, reusing and/or recycling wastes and packaging materials
6. Monitor the disposed wastes till the end point and ensure no adverse impact on the
environment.

7. Improving the efficiency and conservation of energy and natural resources


8. The SHE policy is documented, displayed and communicated to all employees and
others.

Esteemed customers :

Aban Constructions Pvt Ltd


Afcons Infrastructure Ltd (H.O.)
APARNA Enterprises Limited
Ashok Leyland Limited
Automotive Manufacturers
B.G.Shirke Constn.Techn. Pvt Ltd
B.L.Kashyap & Sons Ltd
Coastal Projects Pvt Ltd
Consolidated Const Consortium Ltd
D.S.Constructions Ltd
DLF-Laing O Rourke (India) Pvt Ltd / DLF
EMAS Engineers & Contractors Pvt Ltd
ERA Infra Engineering Limited
Gammon India Limited
Gannon Dunkereley & Co Ltd
Gemini Equipment & Rentals Pvt Ltd
Grasim Industries Limited Ultra / Ready Mix Concrete (P) ltd.
Hindustan Construction Co Ltd
Indu Projects Ltd
ITD Cementation India Ltd
IVRCL Infrastructures & Projects Ltd
J.K.Lakshmi Cement Ltd
Jaiprakash Associates Ltd
JMC Projects (India) Ltd
L&T-AM JV – Tapovan
Lanco Infratech Limited
Madhucon Projects Limited
Maytas Infra Private Ltd
Motive Manufacturers
Nagarjuna Construction Co. Ltd
Navayuga Engineering Co Ltd
Orix Auto Infrastructures Services
Patel Engineering Limited
Raghu Constructions
Ray Mix Concrete
RDC Concrete (India) Limited
RMC Readymix (India) Pvt Ltd
SCHWING GmbH
SEW Constructions Limited / Prasad
Shapoorji Pallonji & Co Ltd
Simplex Infrastructures Limited
Soma Enterprises Limited / China Ghezbhou Soma
Srinivasa Constructions Limited
STETTER GmbH
TATA Motors Limited
The Associated Cement Companies Ltd
DEPARTMENTS AND FUNCTIONS

HRD, ADMINISTRATION & PERSONNEL, STORES,


LOGISTICS AND HR COMMITTEE

All these departments function under the


leadership of the company secretary.

Personnel and HR policy

To recruit without discrimination in terms of caste,


color, creed, religion, sex, who are truly productive.
Improve their efficiency by broadening their skill
Protect people’s health and lives by providing them
a clean and safe environment as free as practicable
from the health hazards.
Providing adequate and timely information in all
matters pertaining to their work, person –related
matters.
Compensate them very fairly according to their
contribution with their frame work of existing
approved practices.
Develop and maintain human relations that inspire
respect for confidence and trust in the company
Human Resource Department
It is headed by senior HR manger. The department
has managers and a wing of executives to see that
the functions are carried out properly.

The core functions include:


• Recruitment and selection
• Induction
• Training and development
• Performance Appraisal
Recruitment and selection
The department where there is a vacancy
will send a Staff Requisition to the HR Department
containing the job requirements. Based on the
requirement the HR department will recruit from
reliable sources and the final selection will be done
after the interview.
Induction
This will help the new employee to get
familiarized with the working environment. The
department sees to it that the new employee is
guided throughout his work during the initial period
and proper support and motivation is also
provided.
Training and Development
While numerous factors drive business
successes, the purpose of Human resource &
development in the work situation is to nourish the
abilities of the individual and satisfy the current
and future human resources needs of the
organization. Rapid technological innovations
impacting the workplace have made it necessary
for people to consistently update their knowledge
and skills
Training employees creates a more positive
corporate culture by adding value to its key
resources.
Training in SSI
SSI believes in Optimum Utilization of Human
Resources through Training and Development
which helps the employee to achieve their
individual goals as well as the organizational goals.
Training for Workmen:
Workmen are encouraged with
“Attitude Engineering (Phase I & II)”
“Industrial Safety (Phase I & II)”

Training for staff and above:


Frequent need based Training Programs are
organized as a part of normal learning culture.
Taking the concept of customer orientation –
“creating a customer centric culture” in the
organization by making it a companywide activity –
through one of the world leaders in “Taking sales &
service to greater levels.”
Developing internal capability by identifying senior
officials of SSI to impart training on customer
orientation to our employees.
Continuous tie up with a leading training institution
for our training options – for programs like team
building, time management, presentation skills and
communication skills.
Nomination of our senior officials to premier
educational institutions like IIM’s for short term and
long term programs based on needs.

Nominations to programs being conducted by


professional bodies like CII, EFSI etc.

Program for new employees


WHERE ARE WE
SSI’s EYE for HANDHOLDING …………
In order to get something from everything; we
must get to know People – “who-is-who” & so
as to know the mode of help / support to seek for.
WHERE ARE WE - “Overview exposure & interactive
session”
Program is exclusively meant for the new
employee focusing at creating openness, trust &
transparency in working together, in a learning
organization along with hand-holding to some
extent.
It mainly focuses on to develop relevant skills,
knowledge and behavior of the employees through
developing individual goals, which are linked to the
departmental and organizational goals. These goals
should be –

S – SPECIFIC
M – MEASURABLE
A – ACHIEVABLE
SMART - GOALS
R – REALISTIC
T – TIME BOUND

The new entrant will give feedback on his


induction to the HR Manager, Functional and
Departmental Head after completion of the same.

BUDDY SYSTEM

“The most important single ingredient in the


formula of success is knowing how to get along
with people."

– Theodore Roosevelt

SSI’s belief in integrity is- “building relationship


along with trust”
To make this statement true, SSI came with a new
intervention with efforts aimed at new Employee
Delight and a mutually beneficial & long
association.

“Buddy system”
New employees will learn their jobs and their roles
within the organization better if they have a “
Buddy”- a seasoned employee assigned to them to
help answer their questions and share with them
an understanding of organizational practices.
Buddy system is a great way to accelerate the new
employee’s ability to deal with only early
disconcerting issues involves a transfer agent
(buddy) and provides the new entrant with implicit
knowledge of:
• What is expected of them
• What they in turn can expect from their
organization
Features of Buddy System:
1.Friendship – Initiate / establish interpersonal
bond to foster mutual trust
2.Sympathy 'vs.' Empathy- Understanding them
by putting yourself in their shoes!
3.Counseling - 'To help a person to help himself‘
4.Listening- Responding ;
5.Real concern for feelings;
6.Confidentiality
“Assist the New entrant to be capable of thinking/
acting independently.”

Performance Appraisal
The HRD conducts performance appraisal of
the employees. It is monthly or yearly basis.

Personnel and Administration department


The department is headed by Deputy General
Manger, followed by Manager, Assistant Managers
and office workers. The functions include:
• Welfare measures
• Muster roll( attendance)
• Wages, salary of employees
• Canteen
• Security
• Transport
• Safety health and Environment policy

Welfare measures:

Group Mediclaim Floater Policy


The employee and his family members are covered
under this policy from the date of joining time till
exit from the company. The scheme provides
coverage to self, father, mother, wife/husband,
son/daughter (to a maximum of 2).
Coverage includes:
• All ailments including the pre-existing
• Maternity
• Child from day one till 90 days
• All surgeries
• 30 days Pre-hospitalization & 60 days Post-
hospitalization

Pre conditions for claims:-


The claimant must be: Admitted in a hospital.
Hospital must have a minimum of 15 bed capacity.
The hospital must be run by a certified medical
practitioner.

Claim intimation:-

The concerned employee must intimate the P&A


Dept., within two days regarding the hospitalization
by furnishing the following details:-

• Name of the employee


• Employee number
• Name of the claimant
• Date of admission in the hospital
• Name and address of the hospital
• The ailment

Submission of claim:- The employee should


submit the duly filled claim form along with the
claim summary sheet (available at P&A
Department) along with the following documents to
the P & A department.
Bill, receipt and the discharge certificate / card
from the hospital – in original.
Cash memos from the hospital / Chemist(s)
supported by the proper prescription – in original.
Receipt and Photostat copies of pathological test
reports from a pathologist supported by the note
from the attending medical practitioner surgeon
demanding such pathological test.
Surgeons certificate stating nature of the operation
performed and the surgeon’s bill and receipt – in
original.
Attending doctor’s consultants /specialists /
anesthetist’s bill and receipt and certificate
regarding diagnosis – in original.
In case of domiciliary hospitalization, receipt from
qualified nurse who attended the patient at his/her
residence duly supported by a certificate from
attending medical practitioner.
Certificate from the medical practitioner giving
reasons for treatment under domiciliary
hospitalization clause of policy.

Certificate from the medical practitioner / surgeon


that the patient is fully cured.

Financial assistance: If estimated cost of medical


expenses is beyond Rs. 40,000/-, the employee
may make a request in
the advance request format (available at P&A
dept.) for financial assistance from the company.
The advance payment will be released by means of
a cheque favoring the hospital authorities.

Settlements
The insurance company will settle your claim
within 2 weeks from the receipt of all claim related
documents. The settlement amount will be credited
to your personal bank account.

Group Personal Accident


The employees are covered under Group Personal
Accident Policy from the date of joining till date of
exit, 24hrs a day. The salient features of GPA policy
are as follows:

Amount covered
The employee has coverage of 60 months of
your salary consisting of your BASIC, PA, HRA and
Conveyance.

Claims:
Employee or his legal heir can make the
following claims under this policy:

• Permanent partial disablement


• Permanent total disablement
• Temporary disablement
• Accidental death
Claim procedure

Employee or his family members have to intimate


the P&A Dept in case of any accident that requires
hospitalization or that requires employee to absent
from duty.
In case of hospitalization, employees are required
to submit the discharge summary, fitness
certificate and Police FIR (if any) to P&A Dept.
Along with the claim form (available at P&A dept.).
In case of death, the following documents have to
be submitted to the P&A Dept:
• Death certificate from the hospital / Concerned
authorities
• Post mortem report
• F I R copy from the Police
• Legal heir certificate
• Bank account details of the legal heir

Group Term Insurance


Employees including trainees are covered under a
Group Term Insurance Policy against death

Employee State Insurance Scheme

The Employee State Insurance Scheme is a


social welfare legislation enacted primarily with the
object of providing certain benefits to employees in
case of sickness, maternity and employment injury
and also to make provision for certain others
matters incidental thereto.
All regular employees are covered as per ESI
scheme. Employee’s contribution of 1.75% on
actual gross earned per month and employer’s
contribution of 4.75% is deposited in ESI account
for the eligible employees.
Mobile Hardware Re-imbursement Scheme
Mobile Hardware Reimbursement is one such thing,
where employees can get reimbursed the cost,
according to their eligibility.
The decision whether there is a need to provide a
mobile phone will be the sole discretion of the
management.
The replacement cost of hardware can be claimed
only once in three years. The cost can be drawn
over a period of three years (the current block
commences from 1-1-07 and will end on 31-12-
2009). Any unutilized amount within this block will
not be carried forward to the next block
commencing from 1-1-2010 or 1-1-2011 as the
case may be.
The reimbursement charges will be claimed based
on the bill to be submitted to the company and the
expenses beyond the ceiling will be borne by the
employee.
Similarly the telephone charges for the residential
phone shall be paid by the employee at the first
instance and shall be claimed from the company by
producing the original bill, subject to the ceiling.
Professional pursuit

Employees with one year of experience in SSI are


eligible for this scheme Profession fees up to an
amount of Rs. 3000/- per annum is reimbursed to
the employees pursuing higher studies in their
respective field / profession on presentation of
valid current year receipt.

Best Employee Scheme

There will be five “Best Employee Awards”


given away during the “Vijayadasami” day, as per
the following classification –

For workers:
• Mixer division
• Plant division
• Pump division

For staff and above:


• Line functions
• Staff functions

Assessment procedure for workers category:


A team of supervisors and engineers associated
with the respective divisions will assess all the
eligible workers within that division and short list
the top 5 best performing workers.

The head of production along with head HR and


administration will review the assessment and
select the best 2 of the 5 workers in each division
and put up the same to the Top Management Team
(TMT) members.

The TMT will select the better of the 2 under each


category and the awards shall be given to them.

Assessment procedure for staff and above


category:
The eligible employees team will be circulated with
two assessment forms (one for line function and
one for staff function). Each employee member will
select one best performing employee from each set
of functions, fill up the relevant assessment sheet
and drop them in a ballot box.
One cannot select his own name for this purpose.
The results of the poll will be enumerated in a two
way table, to find out who has got the maximum
votes.
These selected members will again be appraised by
the HOD’s and forwarded to the relevant TMT
member.
The same will be further reviewed by the TMT
members and they will decide on the two awards,
one for the line function and one for the staff
function respectively.

Bike scheme
In order to facilitate ease in mobility of the
employees, who are supposed to be on the move
predominantly to either visit various customers'
sites and / or on official business SSI has a
motorcycle scheme to each of those employees,
who as per the assessment of the Management
deserves such a facility. The assessment of the
nature of the job of employees will be the sole
discretion of the Management. However, it is
mandatory to Sales and Service Engineers in all
levels to come under this scheme or the car lease
scheme, as may be applicable to his level.

Car scheme
The scheme has been designed to ensure safe,
dependable and comfortable commuting mode for
employees between the work place and home and
other business visits, within the City and its
neighborhood. This is also seen as a measure to
ensure punctuality.
Eligibility:-

• The car scheme shall be applicable for those


employees in the levels of Deputy Manager and
above.
• The relevant employee should have completed
one year of service on the date on which his
application for entering into the scheme is
received by the Company (hereinafter referred
to as “SSI”) and that he must be a confirmed
employee as on that date.

• The employee should have a residual service of


5 years on the above date, before he attains
superannuation, even in case of renewal /
replacement of the car.

Ayudha Pooja
Every year on the eve of ayudha pooja, MD
addresses an all employee congregation (at
Chennai ) with a message for the year, after taking
stock of last year’s performance. The program ends
with high tea and a packet of sweets to take home
to the family members.

Annual Day
Annual day is celebrated on June 18th of every
year with all fun and frolic where all employees
(from Chennai) are invited to be a part of various
cultural and sports events planned, along with their
family members and dine in style with a 5 star
dinner! Pick – up and drop of family members from
their respective residences is customary!
Children Education Scheme
SSI welfare measure extends to Children
Education as a token of encouragement.
Where Employees drawing a basic salary of less
than Rs. 10,000/- per month are reimbursed with
cost of books, school fees, uniform etc. of their
children up to a maximum amount of Rs.3,000/-

Muster roll
The P&A department keep the record of the
attendance of the factory workers through
registers.

Remuneration of employees
The workers in the manufacturing unit are hired
from labour suppliers and are paid on the basis of
their attendance per month and work experience in
SSI and outside. The salary includes:
Basic pay
Provident fund
Provident Fund is a defined benefit scheme, where
benefits are paid in lump-sum on exit. It is
mandatory for all organization having more than 19
employees. Employer and Employees both
contribute 12% of the wage bill to the fund. The
accumulated amount with interest is returned to
Employee on the retirement. After the introduction
of EPS-95 part of the contribution to PF is diverted
to State Pension Scheme, which provides salary
linked benefits on Superannuation
Gratuity
As per The Payment of Gratuity Act,
1972,
Any person employed on wages / salary
is eligible for gratuity –
At the time of retirement or resignation or on
superannuation, if the employee has rendered a
continuous service of not less than five years.
In case of death or disablement, the gratuity is
payable, even if he has not completed 5 years of
service.
The quantum of gratuity is computed at
15 days wages, based on rate of wages last drawn
by the employee concerned for every completed
year of service or a part thereof exceeding 6
months.
The total amount of gratuity payable shall not
exceed Rs.3, 50,000/-.
i.e.
Gratuity = (Monthly Salary / 26) * 15 days * no of
yrs of service
(Salary = Basic + DA.)
However at SSI, the employee is eligible for
gratuity even if he/she has completed 6months of
Service, unlike the Acts requirement of 5 years of
service. This is applicable for employees who are
on regular rolls for Schwing Stetter India Pvt. Ltd.
Super annuation scheme
SSI has a unique Superannuation Scheme for
the Assistant Managers and above category. 15%
of the Basic pay is earmarked for this, which one
can take as a part of his monthly salary, wherein
the amount becomes taxable. The other option is –
one can decide for the scheme where the amount
is managed by reputed mutual fund organizations
with possibility of reasonable return on investment
in the future. However, this amount can be got
back only at the time of superannuation and the
money with the accrued interest in not taxable.
Whereas in the case of resignation the amount that
is given to the employee with accrued interest
becomes taxable.

Employee Pension Scheme


Life pension to family of the individual demised
while in Employment.
Pension at SSI is provided as per the Employee
Pension Scheme, 1995,
The amount of the pension benefit is based on the
employee's average salary during the final year of
employment and the total number of years of
employment.
Under the EPS, members must have completed a
minimum of ten years of service and must be at
least 58 years old.
However, if an employee has completed twenty
years of service, he/she may obtain an early
pension from age 50.
Under this provision, the amount of pension benefit
is reduced by 3 per cent for every year falling short
of 58.

Canteen
The canteen provides lunch to all the employees at
a subsidized rate. It is on contract basis.

Security
G4S, a labour supply firm provides the security
staff to SSI, Chennai. They keep a watch at the
entrances and maintain order. They also take care
of the registers marking attendance of workers.

Transport
Transportation facilities are arranged for all the
employees according to working hours and shifts.
Safety, health, and environment
There is a separate SHE department to see that
safety is ensured at all levels. First aid facility is
also arranged with the service of a doctor and
assisting nurses. The workers in the factory are
given proper safety gadgets in order to avoid risk
to life. Fire extinguishers and alarms are also
placed at different locations and they are checked
at regular intervals. The safety department
conducts mock drill for the employees. The
environment is also kept clean, 30% of the factory
surroundings are maintained as lawns and gardens.
The department is headed by a manager.

Stores department
The department is headed by store managers, then
store staffs and there are workers to assist in the
storing function.

Stores department works with a norm of 1 month


for raw material stocks. Stores inwards the
materials after verifying the P.O no., part no.,
description & quantity with the vendor invoice
and the delivery challan. In case of excess or
shortage in goods, Discrepancy Note (DN) is
issued by the Stores. Stores prepare the Goods
Receipt Note (GRN) with the above details and
forward it to Quality Department All excisable
materials are sent to Excise Department for taking
input credit on material purchased. Excise duty
(paid) document will be handed over to the Excise
Officer after making entry in the inward register.
Quality issues the Goods Inspection Note (GIN)
after checking and certifying the quality, and
makes. In case of green channel vendors (i.e. list of
approved vendors available) the materials are not
offered to Quality for inspection. Both the GRN and
GIN are prepared by Stores themselves.

Storage
Stores assign separate storage locations for the
materials received from supplier. Storage locations
are assigned to materials for indicating physical
presence of the materials on that particular
location at the time of unloading. Unloading point
shows the direction of storage, say North Bay,
South
Bay, West Bay, East Bay etc. on the premises. Both
scrap generated from in-house production and
received from the subcontractor (job work) are
segregated according to the type of material as
wooden, steel, tins and miscellaneous etc. and
stored in respective location. Stores are ultimately
responsible for proper storage of both domestic
and imported materials.

Issue to production
Stores receive monthly production work orders
from Planning Department by 25th of every month
for next month’s production. Pick List is issued by
Planning to Stores for material to be picked and
delivered to Production. Stores take a copy of Bill of
Material from SAP and tick the quantity of materials
to be issued to Production Department. Stores
make ‘311’ movement in SAP for materials issued
to Production through pick list and gets
acknowledgement in the list from the concerned
supervisor. This is based on material availability as
per the SAP ledger. In case of shortage of materials
(materials not available or available in lower
quantity) as per the ledger, Stores informs Planning
and Purchase. If a material is not physically
available though it was ticked and ‘311’movement
was made, Stores reverses it by passing 312
movement.

Logistics department
The department is headed by General Manager,
Logistics. Logistics is the management of the flow
of goods, information and other resources between
the point of origin and the point of consumption in
order to meet the requirements of the consumers.
The department plays a key role in the
organization. It sees that the manufactured
products are transported safely to the destination
point within a fixed span of time so that the
customer is delivered without any delay.

.
Finance & Accounts, Corporate Banking

CFO in consultation with DGM and where necessary


the TMT (Top Management Team), formulates the
financial policies and amendments thereto from
time to time. CFO himself acts as the Company
Secretary.
Policies cover all topics related to the Finance
function, including but not limited to
_ Funding
_ Taxation
_ Accounting methods
_ External reporting of financials
_ Disclosures
_ Foreign exchange
_ Company procedures

Finance department activities

Short monthly Report


Accounts prepares SMR and after review and
approval by DGM
(Finance) sends it to the parent company by the
5th of the following month.
The main page of the report details the month’s
figures of sales made and orders received, and
end-of-the-month figures of order backlog,
inventory, fixed assets and headcount. The report
has attachments giving details of each item
reported in the main page.
The Sales sheet gives complete details of the
sales journal
The Order income sheet contains details of
orders received during the month.
Order Backlog sheet gives information of orders
in hand at the end of the month.
Inventory sheet shows the total stock available in
raw material, semi-finished goods, finished goods &
spares, and separately the duty-paid goods stock.
Headcount sheet shows the number of staff on
hourly-paid and salaried basis for the whole
company, including all operating and non operating
depts.
Previous and current month labour turnover
comparison is shown in the main report. This
supports the labour hiring vis-à-vis the production
budget, to ensure required production is achieved.
The short monthly report serves to give the parent
company a quick idea of the key performance
parameters for the month.

Long Monthly Report


The Long Monthly Report (LMR) gives a
consolidated picture of the financials and an
analysis of the financial performance of the
company for the month and year-to-date.
LMR is sent to the Parent company, on or before
20th of the following month. LMR is discussed in
the TMT meeting scheduled for this purpose, during
which DGM (F&A) makes a presentation of the
salient features of the performance and takes
notes for follow-up action.
The Parent company may respond with comments
or questions on the LMR, and in such a case, CFO
will reply their points in consultation with DGM
(F&A) and /or concerned TMT members where
necessary.

Annual closing & auditors’ verification


An elaborate schedule is prepared by the team of
Finance dept at least six weeks before the end of
the financial year (31st Dec), listing the activities
and responsible persons.
The schedule is released to all stakeholders after
review and
Clearance by DGM (Finance). Stakeholders include
all officers in Finance &Accounts, other function
heads, and TMT members.
The schedule takes into account:
• Stage of completion of the books vis-à-vis a
hard closing
• Previous year audit observations
• Internal audit reports
• Interim audit and vouching reports
• Parent company account reconciliation and
confirmation of balance
• Internal and external verification of the
reported figures in respect of:
a) Fixed assets
b) Sundry debtors
c) Inventories
d) Other current assets
e) Long-term liabilities
f) Sundry creditors and
g) Other current liabilities

Vouching and interim audit schedules are


organized in consultation with the statutory
auditors and dates by which these reports should
come in are fixed. It is important that inputs from
the reports are integrated into the annual closing
schedule.
The team has overall responsibility for every item
on the closing schedule, and works with concerned
sections of Accounts to first make sure that the
books are completed and ready for review and
passing of closing and adjustment entries.
Closing and adjustment entries are then passed to
give finality to the year’s figures and the first Trial
Balance is prepared by the team. First-level
verification of trial balance is undertaken by the
Statutory Auditors and their list of points and
queries are taken up for response by the team.
After a few iterations the final trial balance is
made. From this trial balance, cleared by statutory
auditors, the financials, comprising the profit& loss
account for the year, the balance sheet as at the
end of the year, and the cash flow statement for
the year are prepared in the prescribed formats.
The schedules forming part of the profit and loss
account and
Balance sheets are simultaneously prepared, as
are the schedules of specific accounts for
auditors, issued to them and cleared by them.
Notes to the Accounts are generated during the
exercise, and after finalizing the financials, the
notes are firmed up and given to DGM (Finance) for
review and clearance.
DGM (Finance) reviews and clears the financials
and Notes to the accounts, in consultation with
CFO.
The complete set of financials including notes to
the accounts is taken up for final balance sheet
audit by the statutory auditors.
Changes in the figures or presentation, if any,
proposed during
Balance sheet audit are discussed by the Head of
the Statutory Auditors’ team and the partner if
necessary, with DGM (Finance) and the CFO, and
the final report agreed upon.
The financials and attendant reports forming
part of the company’s Annual Report are forwarded
to the Company Secretary for action to get the
accounts duly approved by the shareholders at the
company’s annual general meeting (AGM).
Secretarial dept puts together the company’s
Annual Report and takes steps to get it approved,
first by the Board of Directors and then the
shareholders at the AGM.

Audit
Statutory audit:
Statutory audit of the accounts is done once a year
and covers the period Jan-Dec (calendar year). The
audit ensures that the financial statements i.e. the
balance sheet, profit & loss statement and the cash
flow statement give a true & fair view and are free
from any material misstatements. The audit takes
into account points generated during the previous
tax audit, as the tax audit would have covered a
part (Jan-Mar) of the year for which the statutory
audit is being done.

Tax audit:
Tax audit refers to certification of the Balance
Sheet and Profit and Loss Account after checking
and ensuring the figures and the books of accounts
on the basis of which they are prepared are as per
the requirements of the Income Tax Act, 1961.
The tax audit report issued by the Tax auditor is for
the Indian fiscal year, April-March, and forms an
integral part of the tax return being filed.
The audit, among other things, takes care of:
Checking the correctness of income,
expenditure and claimable deductions as per the
Income Tax Act, 1961
Effective reviews to see that the accounts
are prepared in accordance with the tax efficient
policies
Checking and confirming tax compliance
norms as set out by the Income Tax Act, 1961 and
Issuing the Tax Audit report in the
prescribed format

Transfer pricing audit:


Transfer price audit refers to the review and
certification of the prices and terms of transactions
between the company and the parent company.
The transfer pricing audit report is an integral part
of the tax return filed.

HB2 Audit:
In order to consolidate accounts with the parent
company, Accounts prepares HB2 schedules of the
financials in line with the templates issued.
The schedules format the gap between the Indian
Accounting
Standards and the German Accounting standards
and reconcile the figures from the perspective of
the two standards.

Cash management system (CMS):


CMS is a common pool account with one or more
Bank/s operated by the head office to deposit all
the collections received from branches.
Chennai collection is excluded when accounting
CMS entries, since it is accounted through cheques
on hand. On a daily basis, branch accountant
prepares the payment collection statement and
forwards to HO together with the deposit slips. One
deposit slip may have multiple instruments from
different location, but only the total amount will be
entered in the system.

Petty cash:
Cash in hand holding is limited to Rs 1, 00,000
except for
Special occasions and/or emergencies.
Withdrawal from bank is only from IOB,
Irunkattukottai branch
and based on cash in hand.
Cash operation timings are restricted to 1000-1200
and 1400-
1600 hours every day.
Any exceptional payments requires DGM
(Finance)’s approval.
Day to day reconciliation is done for cash in hand
and handed
over to DGM (F&A) including denomination.

Borrowings:
Trade bankers for borrowings are mainly IOB, SBI,
IDBI, HDFC, ING Vysya, Axis, Kotak Mahindra and
ICICI.
Working capital and term loan facilities are availed
of from both IOB and HDFC bank.
WCDL (working capital on demand loan) – It is
generally for a fixed period (i.e. for 30 / 60 / 90
days).
CC (Cash Credit) is operated in the form of an
overdraft and the account balance at the end of
each day determines the interest payable. This has
to be renewed every year. It is repayable on
demand by the bank in full.
When overdraft utilization continues at a high level,
then a portion of it is converted to WCDL.
Foreign currency loan – Taking loan in foreign
currency and repaying it in the same value
Short-term loans (rupees) are resorted to, from
time to time, as the spikes in working capital
requirements have to be coped with.

Bill discounting (purchase)


Bill discounting facility is offered to suppliers using
a bill discounting limit set up for this purpose.
Suppliers discount their bill against this limit when
they express a need for immediate cash. The trade
bankers for bill discounting are:
• IDBI
• AXIS
• Kotak Mahindra
Interest rates are agreed by the bank, and the
bank remits to the supplier the amount less
discount.
The interest charged is for the period from the date
of discounting to the actual due date, at the rate
agreed upon.
Vendor section forwards a letter (hundi) to bank for
bill discounting (discount is borne by the supplier)
for further process.
Bill discounting is generally done once in a week
Bank makes payment immediately to supplier after
bill discounting, Vendor section pays the actual bill
amount on the due date to bank.
Finance ensures that the account is funded
adequately on the due date. Vendor section sends
a monthly payment statement to the bank.

Bill discounting (sales)


Bill discounting facility is available with only a few
banks and the rate differs from bank to bank.
Customers seeking the facility are linked with one
of the bankers with whom the facility has been
created, after ensuring the customer’s credit-
worthiness. The discounting is done for a maximum
of 90 days.
Sales Accounts section prepares the bill of
exchange (hundi) for
acceptance by the customer and return to the bank
for payment.
Interest is charged by the bank on the residual
period. Residual
period is the period from the date of release of
payment by the bank till the date on which the bill
becomes due.
Interest rates are agreed by the bank, and the
bank remits to
the company the amount of the bill in full on
receipt of the bill of exchange and other
documents.
The concerned Sales office ensures that the
customer pays the
bill together with the interest as per the hundi on
the due date.

Tax:
It includes:
Tax deduction at source (TDS) - it is broadly
divided into 2: salary item and non- salary
item( rent, payment towards sub contractors)
Tax collection at source (TCS) – it pertains to
sale of scrap. The price collected from the
bidders at scrap auction includes an element of
tax that has to be segregated and not taken as
income. On conclusion of the sales of scrap at
every auction a ‘scrap sales and TCS’ excel
sheet is drawn up that contains details of
party-wise amount remitted by the buyers for
scrap taken by them, the tax component of the
value remitted, and the balance being the net
sale value.
Fringe Benefits Tax (FBT)
Advance tax payment
Tax assessments:
Finance is required to file the return of total income
of the company on or before the appointed date of
the Assessment Year (presently 31st Oct).
Finance coordinates with the Income Tax
Department regarding pending assessments, and
takes action based on feedback received.
Finance is in charge of receiving notices that may
be issued by the Income Tax dept, verifying them,
and attending the hearing and giving responses,
together with supporting documents, to the points
contained therein.

Internal audit
The scope of Internal Audit covers periodical review
of accounts
records; scrutiny of payment and accounting work;
study of accounting procedures followed and used
in the company and regarding audit procedures
and pursuance/settlement of objection taken in test
audit notes issued by statutory audit offices.
Process of internal audit
Internal audit is done based on the scope of work
(i.e. the areas which requires additional
verification) issued by the management.
Internal auditor verifies the list of accounts
mentioned in scope and they certify and report the
accounts and give their suggestions to improve
accounts, in order to avoid post-mortem work in
the year end.
Follow-up action on internal audit reports
After verifying the accounts the auditors issue
their report to the management. Management
takes action based on the report given Internal
auditor and prepares a report about the corrections
made in respect to it. The report given by the
Internal auditor is used as the base data for
Statutory auditors to audit the accounts.
The Directors of the company are regularly briefed
about the internal audits done since conclusion of
the previous meeting, important findings and
corrective action taken.

Information system Department

This is the service department of the company. The


company has computers installed in all
departments that are connected to a main server.
The operating used is windows xp and a separate
enterprise resource planning (ERP) pack for each
department is maintained. The ERP model being
used is SAP, from January 1,2003. The SCHWING
Group of companies use SAP for processing of data
in all its group companies. SCHWING Germany has
the overall control of SAP implementation.

SAP is a comprehensive ERP solution and all data is


captured on-line using a powerful relational data
base management system. We in India also have
an online link with all the group of companies and
can retrieve information on-line. In view of this SAP
requires booking of all data on line, without delay.
The department sees that the information system
is properly maintained.

Sales & Marketing Department

SSI is organized into plants/branch offices, and


from an administrative standpoint the company’s
Marketing & sales function is organized into sales
offices.
Sales Organizations
As the word itself indicates these centers are
responsible for organizing their sales and
sometimes sales of other companies. For example
a customer may place orders on a company
outside Chennai with a specific request that the
material is to be shipped from Chennai. In this case
Chennai takes
responsibility for organizing the sale, but the credit
for sale goes to the company on whose behalf the
sale is organized.
This happens often, and so Chennai is easily the
largest sales organization. The entire range of
products manufactured by the 4 plants in Chennai
is organized and controlled by Chennai Sales
Organization.
Sales Offices
When an order is received from a customer for
supply of material it may be supplied from the
company where the customer is located or from
the plant itself. When a customer located in Kerala
or Karnataka places an order on Chennai Corporate
Office with a clause that the same is to be supplied
at their respective location the sales turnover does
not become turnover of Chennai but the turnover
of the company or plant which solicited the order.
These locations are referred to as Sales Offices and
are referred to by a two or three digit code. For
example through the efforts of the Plant at Pune a
sale may be made, and the credit goes to Pune. In
this context Pune is a
Sales Office. It may be observed that all companies
are also sales offices.
This department handles the sale of all products
and services offered by the company. They also
deal with customer care. Since the customers of
the company are other large companies promotion
does not take place through media. They used to
promote their products through sponsoring major
events related to the industry. Schwing Stetter had
been a major sponsor of Excon 2009, an exhibition
of construction equipment products, which is the
largest of its kind in Asia.

Revenue is generated from the sales of following


products and services:
Equipment sales: the main product lines are
batching plants, concrete transit mixers and
concrete pumps.
Spares sales: spares are not manufactured, but
only bought and sold.
Service income: the complete range of services
extended to the customer after equipment sale is
as follows:
Mounting the transit mixer on the truck chassis
Minor repairs of sub-assemblies
Warranty as well as post warranty service
Major repairs
Second-hand sales of an old equipment or part
Customer service is attended to by two units:
Service Department and Service centre. Service
department is responsible for warranty service and
onsite service after warranty period. Service
Centre, on the other hand, is repairs of the sold
equipment at the Chennai facility.
Training income: A separate department for
training runs training center in Chennai. The
training is meant for
1. Customer representatives
2. Newly recruited staff
3. Retraining of existing staff
4. Outsiders

Scrap sales: Scrap generated during the


production process is
disposed off to scrap dealers periodically.

The sales offices after getting the orders, it is


transferred to the
Commercial department at HO. The commercial
books the customer order and raises the sales
order of after satisfactory clearance of price and
payment terms.
Production, QC, design, project &
maintenance department
The production is mainly carried out in 3
manufacturing units:
Plant F71 &72: concrete pumps and spares
Plant D6: Transit mixture
Plant G12: Batching plant
QC checks the quality of products manufactured.
They see to it
that the products are quality maintained. When raw
materials are purchased, QC delivers the Goods
Inspection Note (GIN). They check and certify the
quality of the purchased materials.
In case of green channel vendors (i.e., list of
approved vendors) the materials are not offered to
Quality for inspection. Both the GRN and GIN are
prepared by Stores themselves. Rejection may
arise in the following cases:
(a) Material received in damaged condition
(b) Quality of material below required standard
The company is dealing with heavy engineering
products where
they face heavy competition. The design
department work hard to give the product a cutting
edge technology. The maintenance department
plays a critical role in the company. They usually
help in the after sale services and undertake repair
works.

Purchase, planning department


General Manager, purchases play the lead role in
the department. He is assisted by managers,
assistant managers, office staff and workers.
Purchases include materials and spares and
sometimes sub-assemblies in case of sub-
contracts. Subcontracting is the delegation by one
enterprise (OEM), of a portion of its production
process under contract to another enterprise.
Purchase department is authorized to select
vendors and develop a list of approved vendors,
based on quality, reliability, price and reputation of
brand.
All imports and resultant purchase of foreign
currencies are covered forward as a rule, and no
exposure in foreign currency is left open.
Purchase of key material and components are
generally done direct from Original Equipment
manufacturers (OEM) and not from trade.
Purchase develops a list of ‘Green channel vendors’
i.e., approved vendors whose material need not go
for inspection by Quality.
Purchase of materials- domestic & import
Every year the Planning dept configures the
purchase planning table in SAP for automatic
generation of purchase indent.
Planning dept runs the planning table on SAP and
purchase
requisitions for materials that are not available
are automatically generated. Purchase dept sends
enquiry letter to vendors listing materials
required and seeking price, availability and terms
to be quoted.
Purchase chooses the vendor based on rate,
volume, quality,
reliability, and reputation of brand.
Purchase receives vendor’s quotations, which are
sometimes in the form of pro forma invoices, and
decides the vendor and price & payment terms.
Price is confirmed by Purchase Head with the
guidance of GM Purchase.
Based on the purchase requisitions originating in
SAP, Purchase
generates the purchase order (PO). PO is created
once a month for equipment parts and once a week
for spares.
Sub contracting
Purchase dept prepares and keeps updated a list of
subcontractors based on the type of job work,
quality, reliability and track record. Purchase
confirms with subcontractor whether job work is
done with
(a) raw materials issued or (b) his own raw
material.
In case of (a) Stores issues material to
subcontractor for job work
In case of (b) Subcontractor uses his own material
and forwards the
PO & invoice for materials and for labour
separately.
Based on the above criteria Purchase generates
the Subcontractor Purchase Order and sends it
to Stores.
In a routine process every month materials are
issued for job work to regular subcontractors.
Except Subcontractor PO all documents are
generated outside the system and particulars
entered on SAP where relevant.
Purchase receives order confirmation from the
subcontractor.
Chapter 5
Swot analysis

SWOT OF THE INDUSTRY

Strength:
The global construction equipment industry is
growing at 5 per cent, while India is growing at a
blistering pace of around 30 to 35 per cent
annually. Indian market is estimated to be USD$ 4
billion by 2010 end.
The vast talent pool gives India a comparative
advantage, with high quality of engineering,
software and IT talent. India’s labor cost per hour is
amongst lowest compared to other developing
countries.

Weakness:
Weak organized market currently. It is necessary to
have a strong organized market for the industry to
grow fast, because it offers substantial benefits. It
will allow customers to upgrade to newer, more
sophisticated equipment faster, and also help
players to retain customers.
To develop India as a major manufacturing hub it is
necessary to focus on R & D. But in the case of
construction equipment the focus on R & D is less
compare to the global counter parts. With few
exceptions, technology is imported from global
partner or parent companies, rather than
developing it indigenously here.

Opportunities:
Many global companies have brought in world-class
technology, processes and systems. Few big name
s like JCB, Ingersoll Rand, Komastu, and Caterpillar
have their presence in
India. With India’s talent pool of skilled labor,
adequate R & D, low cost of labor, India has the
potential to manufacture similar equipments at a
much lower cost.
The infrastructure thrust in the country.

Threats:
Unorganized segment is estimated to be at 16-18%
which varies across different equipment categories.
High end equipments are manufactured by
organized players with large R & D facilities. Hence,
unorganized sector does not pose a big threat.
Government have drawn robust plan for
infrastructure development but still poor quality of
existing infrastructure acts as a bottle neck as
significant resource is utilized for its repairs and
maintenance. This acts as a hurdle for
implementation of new projects, which also
hampers the overall economic development of the
economy and the sector.
Swot of Schwing Stetter India Pvt. Ltd

Strength:
• The company is ISO 9001-2000 Certificate, in
recognition of the Quality Management
Systems they follow in various spheres of
activity.
• They could achieve the six sigma compliance
standards which stand for quality, reliability.
• It had bagged many prestigious awards like
“Outstanding contribution towards Indo-
German economic relations” awarded by Indo
German Chamber of Commerce & IMEA award
for “Best practices on Customer training for
service” awarded by M/s Frost & Sullivan.
• The ownership is by Schwing Gmbh, Germany,
a leading company in the global construction
equipment industry.
• Established position in the domestic ready mix
concrete handling equipment segment.
• Extensive distribution network- has branch
offices and stocking centers at various
strategic locations all over India to cater to the
requirement of customers.
• Diversified and reputed client base
• Well qualified and trained human resource,
good brand recognition.

Weakness:
• The scope of growth for the company is limited
to the concrete equipment sector which is only
12% of the entire Indian Construction
Equipment Sector.
• The company has manufacturing facility only at
Tamil Nadu in India, from where it has to cater
to the need of the whole country.
• Vulnerability to adverse movements in raw
material prices, some of the components have
to be even imported.
• High working capital intensity, which limits
cash flow from operations.
• Limited investments in R&D

Opportunities:
• Infrastructure thrust- significant investments
are planned in developing India’s
infrastructure.
• Many new areas are emerging, that present
good growth potential for the future, namely,
rentals, leasing, exports etc. Used and rental
equipment markets are still in their nascent
stages.
• The Indian construction equipment industry is
growing at 30 to 35% annually; it presents high
potential for growth. It is expected to grow 5-
fold by 2015.

Threats:
• Entry of new competitors
• The market is highly fragmented, dominated by
few large players.
• Competitive rivalry- price and service are the
differentiators, lack in sharp differentiation
leads to competition in price.
• Price sensitive market, customers need to be
trained in technology, equipment usage.
• Threat of imports from low cost countries like
China- the Chinese equipments has the
competitive advantage of being significantly
cheaper than the Indian equipments.

Conclusion
India’s booming infrastructure sector is fuelling
demand for all kinds of construction equipments.
The market appears good for the infrastructure
industry and considering the thrust on mammoth
infrastructure development in India, SSI is
confident of achieving substantial growth in the
years to come with better demand for quality
equipments.
Bibliography
Finance and Accounts procedures manual
Employee manual
SSI Home net
Internet-
www.dhi.nic.in/MINING-CONSTN-
EQUIPMENT.pdf
www.icra.in/.../May%2010,%202010-Indian
%20mining%20and%20const%20equip.pdf
ibef.org/download
%5construction_equipment_27feb_0812.pdf
icra.in/FILES/PDF/CreditPerspective/2009-June-
Schwing.pdf
www.schwingstetterindia.com