Demand in segments that company caters to has come back: Cummins India

Engines and power equipment maker Cummins India has said the demand in most of the segments that the company caters to has come back strongly even as supply chain issues remain a challenge for the industry.

In an interview with PTI, Cummins India Managing Director Ashwath Ram said the Hydrogen Energy Mission, announced in the Union Budget for this fiscal, will boost the company’s business as Cummins has made significant investments in these areas.

“Demand is pretty robust and we seem to have bounced back strongly. Between the third quarter and fourth quarter, we were operating at around 80-90 per cent or 95 per cent across all of the plants,” Ram told PTI.

Segment-wise, he said, demand in power generation space and everything related to infrastructure, healthcare, rental, data centre and technology have come back strongly. The company is seeing demand pretty robust in most of the segments he added.

Ram said there are several challenges in the market mainly related to supply chain, with supply of electronics remaining a global constraint and that this problem is likely to last at least a couple of quarters.

“We are trying to maximise the sales based on the availability of parts,” he added.

He said the company has still not opened its offices and based on the second wave, they are unlikely to be opened in the next couple of months.

Ram, however, said the second wave is unlikely to have much impact on the manufacturing sector as both people and the government are better prepared this time round along with the availability of the vaccine as well.

The Maharashtra government is not shutting down manufacturing and business like they had done earlier, he said.

“I think everyone has learnt from the previous cycle that did harm to the business so badly that it is difficult to recover,” he said.

Ram said that the government is pushing a policy towards cleaner and greener power and use of hydrogen by setting up the National Hydrogen Energy Mission, which are significant from Cummins perspective.

“Cummins has made significant investments in these areas of technology and if more and more of it opens up, it will boost business,” he said.

Ram added that the vehicle scrapping is, in principle, a good policy and if it is implemented in theory, it will boost demand.

“We are more focused on hydrogen because Cummins has a leading technology there whether it be in rail fuel cells, or automotive fuel cells or even in hydrogen generation Cummins has its own technology.

“So, we are expecting to bring this technology into India in the next few years as well,” Ram said.

On the Vehicle Scrapping Policy, Ram asid prima facie, it is a positive first step towards cleaner India.

Even though the one-year-oldBSVI emission norms will reduce pollution levels by almost 60-70 per cent compared to BSIV norms, “we parallelly have BS-I, II, and III vehicles plying on the roads that contribute to more than 90 per cent of the pollution.

“So, definitely, this policy was long overdue,” he said.

He said multiple factors such as clarity onimplementation and enforcement of the policy and setting up the right infrastructure including automated test facilities will play a major role in ensuring its success.

A lot has been put on the states that are already struggling financially, he added.

“We feel the center being involved with incentives in the scheme is an absolute necessity for the scheme to be successful.

“The proposal also calls for OEMs (original equipment manufacturers) to provide large discounts to owners scrapping vehicles which the OEM’s are not in a position to do,” he said.

Overall directionally the ideas are good, implementation needs to be detailed out to ensure the industry is supported, Ram added.

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