Having the foresight that holds true even half a century later is possible only when the visionary is true to his passion. Mr. B.R. Lee was one. This gentleman from North Carolina, USA, along with his three sons founded LeeBoy that first found a toe-hold and then wedged the gap wide for his products – construction equipment (CE). Early on, he realized that the big boys of CE did not make machines like small pavers, pot-hole patchers, brooms, force feed loaders and the like, basically those that are peripheral to the mainstream road construction equipment. Today, 850 out of 1400 pavers sold in the US market are made by LeeBoy.
The nuances did not change even when ST Engineering, Singapore, took over LeeBoy in 2005 and the company set foot in India five years later.
India strategy
Despite being a late entrant into one of the most competitive markets, LeeBoy India has completed a successful run till date to the extent that they are poised to break-even by next year.
Mr. Amarnath Ramachandran, President, LeeBoy India Construction Equipment, explains the strategy with which they forged ahead in India, “One way was for the units to come out of our Chinese factories… terrible in quality for export. But we opted to go green field here and manufacture machines with global specifications.”
The focus was India as well as Middle East, Africa and South East Asia and LeeBoy zeroed down to making motor graders. He shares: “In India, the excavators and backhoe loaders are seen as low-end machines which are mostly sub-contracted. Hence, we brought out the first grader 785i with 12.5t in 2011.”
LeeBoy India began by solidifying its presence by running a unique marketing strategy – to provide skilled operators along with the machines that were sold. So, the practice of ‘picking up an operator, training him ensuring accountability and productivity besides providing a backup operator also’ continues till date.
Spirit of LeeBoy
Success, for LeeBoy, always lay in giving value for money for state-of-the-art machines priced in the economical range.
Mr. Ramachandran explains: “This is an investment intensive field. There is a huge infrastructure deficit. We still have primitive sky lifts and improper road sweepers. Our excavators have buckets that are 25 per cent bigger than the machines in their class. And our aggregates are the best in class. We look at ourselves as a specialized house that manufactures niche products, and we will go on to produce even higher class machines.”
Retaining the ‘Mojo’
It becomes imperative for LeeBoy equipment to give the best featured machines expecting worst case work scenarios.
“Our excavators are used in rough conditions like quarries. Therefore, we have developed a drill attachment on it in-house. Now we want to make a piling attachment also. One size does not work in Indian market conditions. Unlike overseas where they check the placement of the machines location wise so that ideal piece of machinery is sent out, here the buyer does not know where and what for the machine will be used in specific terms,” he says.
Further their ‘mojo’ is enhanced by their array of products that can serve the Indian infrastructure-building scenario even 10 years later in terms of technology.
Steady progress
Motor grader 785i in 12.5t and 25t, two models of backhoe loaders, a larger grader, and 985 15t grader were some CE that LeeBoy launched since they began in India. If they sold 21 graders in 2013, 47 the next year and 109 in 2015, the number hiked in 2016-17 to 160 units. With prospects looking up since infrastructure projects are being dished out, LeeBoy India is happy that, “The Department of Heavy Industry has worked out a new hybrid annuity model to replace the full-fledged PPP model. And they have full-fledged EPC contracts also where they pay in stages and the contractor can clear out instead of collecting toll. The projects are moving at a better pace which reflects in the increased offtakes.”
The multiple safety features like hydraulic brakes, functional power steering even after the engine is switched-off, emergency shut-down switch and fire suppression system have always been mandatory for LeeBoy machines contributing to their progress in India. Soon these features will become imperative as per the new DHI specifications.
Plans Ahoy
LeeBoy is excited to bring out more new CE in the coming times. It helps that the market needs dictate the use of wide range of equipment and no single company can make them all under one roof. Mr. Ramachandran shares: “At EXCON this year we will bring out 18 and 22 tonne motor graders which offer triple the productivity but at a higher cost. These machines reduce the need for staff by 33 per cent and the contractor will need fewer numbers of machines to operate in the first place. Till now these are used in mining but eventually we plan to introduce these into road construction because these will decrease the time consumed.”
Currently, the installed capacity that LeeBoy enjoys here is to produce 30 graders a month since it is a final assembly plant.
LeeBoy at home and out
Though the exports for LeeBoy stand at about 10 per cent, their profitability is on the rise. He explains: “In 2014, we exported 47 machines while we sold 160 graders domestically. Our machines are exported to Middle East by big buyers like L&T. Now they have started buying for domestic. We are upbeat about the scenario and expecting a huge boost on profitability.”
Within six years of business in India, LeeBoy is going strong in the market to have captured almost 20 per cent of the share in motor graders with almost 16 firmly established global competitors. Mr. Ramachandran shares: “Consolidation is on. In the next couple of years, we plan to enter specialized segments with machines required in say tunneling.”
Current sales in the general market are expected to be up by 30-40 per cent compared to last year and are pegged at 11-1400 graders per annum.
Support system
LeeBoy is well armed with a dealer network across the country that is supported by their experts. This has gone a long way in helping them transition the phase from their initial years where they needed to convince their customers as to why they should buy LeeBoy machines to today’s new and open minded contractors looking at safety features and value for money. He says: “Even overseas we station our experts. For example, we have two dedicated engineers stationed in Zambia till the project is completed.”
According to Mr. Ramachandran, CE sector also should have been mandated to shift to BS-VI echoing the general transport sector by 2020. He has a point that the engines for both sectors are made by the same brands but the transition is staggered for the CE sector, which defeats the purpose of controlling the toxic emission.
Skill priorities
LeeBoy conducts their own training courses at their training school that also offers dormitory facilities to the students coming from across the nation. He shares: “Graders are the highest paid operators in the Industry but finding people to train is the most difficult part. These are expensive machines so we only take medium level helpers, and train them for three months. Training is for two weeks for the skilled students. Learning operations of the backhoes and excavators is easier. But for a fresh student learning to operate would take around three years.”
With combined efforts on all possible fronts, LeeBoy hopes to touch a turnover of Rs. 500 crores by 2022 or a little earlier as compared to Rs. 120 crores currently.
Buoyed by the tremendous response from the market, LeeBoy is sure to scale the heights sooner than later.