Amit Gossain, Managing Director of KONE India, discusses the revival of the real estate segment and how it will spur the elevator/escalator industry, and details the company's plans to instal the world's biggest escalator in Mumbai. Edited excerpts.
The revival of the real estate sector signals changing fortunes for its suppliers. Is KONE India witnessing similar changes?
The real estate sector has been through lots of ups and downs over the past few years. Due to the demonetisation announced late last year, the industry is currently facing a short-term impact, but I am sure it will pick up in the long run. India is seeing fast-paced urbanisation and it is evident that this trend will set the stage for faster development across all sectors.
Elevators are there in the heart of a building to ensure smooth people flow. Of late, a great many tall buildings are being built; In fact, this trend has become more prevalent and the buildings are now more complex. As we are finally creating 'cities in the sky', we have to ensure both safety and efficiency when we design our escape systems.
True to its vision of 'delivering the best people flow experience', KONE will provide solutions with all the right features, ensuring smooth and safe rides for users. We have been in the Forbes list of most innovative companies for six years in a row, which is a testimony to the world-class technology we use. The customer today defines his needs well. He is not only looking at better aesthetics, but also at more economical and safer world-class solutions. Providing the best people flow to create an enjoyable and memorable user experience will continue to be our priority.
Which is your biggest and most buoyant market? What are your India expansion plans?
Growth is happening across the country and all markets are equally important. Customers' requirements in different geographies could be different, but we need to provide value to all our customers, across all regions, with the same enthusiasm and vigour that mark our world-class operations and services.
We will continue to innovate and provide value in line with the market trends. We have a best-in-class production unit that can support the ever-increasing needs of the customers. We are also investing in a new plant in Sriperumbudur in Tamil Nadu, which will be a state-of-the-art, world-class facility.
Then there is our Chennai-based Indian Technology and Engineering Centre that helps with innovative product developments across the globe. We have multiple service and installation offices and centres across India that serve our customers in all cities and even in remote areas. This centre is also helping us instal the world's largest escalator in Mumbai, which is capable to carry 250 passengers in a single flow.
Now that there is enough splurging in the luxury market, do your top-end customers want something different?
KONE is an innovation leader and we are committed to delivering the best people flow experience. With the demand rising for high-rise buildings, the need for faster elevators is increasing. KONE has also led the way by introducing a new hoisting technology called KONE Ultra rope - a superlight carbon fibre core. The Ultra rope is 90 per cent lighter than the equivalent steel cable, thus ensuring more than 50 per cent reduction in moving masses and 15 per cent reduction in energy consumption. It also allows an elevator to travel up to 1 km in a single run, double of what's currently possible with a steel cable.
Our latest partnership with the IBM will enable us to use technology to provide a better experience for our customers and end users. By leveraging the Watson IoT platform, we will be able to improve the uptime of elevators and escalators, bring a better experience, shorten journey time and improve people flow in big cities. Our differentiation will come from how best we utilise the insights to improve our service.
What is the parent company's plan to deal with the changing investment climate in India? Do you want to focus on capex?
Our new plant will be operational in a couple of years. This is an investment to ensure that we meet the dynamic needs of the ever-changing market. We are also expanding our offices to make sure we deliver on-time and quality services to our customers.
As India moves from horizontal to vertical spaces and buildings, what kind of development do you expect?
Even now, India is largely a residential market and growth will essentially come from this segment. With affordable housing given the infra status, this segment is bound to experience a bigger growth. Also, with the focus on the infrastructure sector and the growing number of metros, the need for escalators and elevators will be increasing. The government is also pushing for airport modernisation and I see a great potential in that sector as well. With the Indian government keen on infrastructure development, there will be a lot of scope to improve people flow and that will happen through urbanisation.
Which product segment is witnessing the maximum surge - entry, mid-level or the niche?
As I have mentioned earlier, the residential segment is witnessing maximum growth. And the growth is mostly happening in the mid-segment. The luxury segment will continue to grow, but with all the new government policies coming in to support the real estate sector, the mid-segment will see a better surge.
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