Mithra Kyokuto SPV, the Vijayawada-based joint venture project between the Mithra Group and Kyokuto Kaihatsu Kogyo Co. Ltd. of Japan believes in slow but steady growth based purely on a customer-centric approach.
Mr. Takeo Norimitsu, Executive Officer, Overseas Business Development Division, Kyokuto Kaihatsu Kogyo, Japan, shares: “When I came to India in 2009, we saw great potential for tippers, transit mixers and concrete machinery equipment. The Indian market is large, and Kyokuto wanted to expand globally. Till then we were in Japan and China only.”
Mr. M.V. Srinivas, Deputy Managing Director, Mithra Kyokuto, says: “We have for long been closely associated with Japanese companies like Toyota, Honda and Komatsu as their dealers here. We believe that the Japanese system of lean management, and their adherence to high quality standards are the key factors for success. We wished to bring Japanese technology and work discipline into India because it will benefit the customers here.”
Started in 1955, Kyokuto began with manufacturing light and medium tippers and later, expanded into large tippers. Holding 50 per cent market share in Japan, Kyokuto has developed its technology and precision over time.
Nine years later, the Mithra Group was set up in Andhra Pradesh by its founding Chairman, Mr. M. Subrahmanyam. It soon became a distributor/dealer for global brands like Cummins, Toyota, Honda (two-wheelers), Atlas Copco and L&T-Komatsu and for home-grown Maruti Suzuki. Mr. Srinivas says: “We have achieved over Rs. 1,200-crore turnover with human resource strength of over 2,500. As part of our future strategy, we have diversified into manufacturing of tipper bodies, concrete machinery equipment, bus body design, developing and building high pressure hydraulic hoses besides industrial hoses.”
Knowledge sharing
The partnership, of which 74 per cent is owned by Kyokuto and 26 per cent by the Mithra Group, officially started manufacturing in 2012, with tippers and transit mixers as the company’s flagship products.
Mr. Norimitsu explains: “The technology is from Kyokuto while the Mithra Group takes care of marketing and liaison. We handle everything, right from the design, product development, manufacturing and quality to dispatch.”
Complementing each other and learning from each other is what keeps any partnership healthy and growing. Mr. Srinivas says: “You may have a great product, but unless you localize it to the requirement of the end users, you cannot ensure success. We utilize years of knowledge of our customers, and this helps us in bringing out products that will be the first choice for them. We have established the factory with 98 per cent local management. Kyokuto shares its technology and knowledge through training at all its global plants. Our products boast of quality and durability, and it is because of the Japanese advanced design capabilities. This is of immense benefit to all our team members. We have been able to set benchmark in terms of overall manufacturing and quality levels of all companies in India.”
He adds that Mithra Group has learnt how to manufacture high QDR products from its Japanese counterparts. According to him, the company has worked towards the partnership by building team culture and by adopting the famous Japanese Kaizen – meaning improvement every moment of every day.
Moreover, Kyokuto believes that the easy work relationship of the Mithra Group with different global brands makes introducing new products easier.
Pegging growth to excellence
Japanese companies have always been known for quality and consistency of products. Here too, the products of Mithra Kyokuto SPV boast of design as their USP.
Mr. Norimitsu explains the design aspect in transit mixers as an example, “Because it is critical for the performance of the transit mixer, the design of the blade used in our mixers is unique which has got a good reputation from our customers for high performance of agitating and discharging.” An ideal solution for Indian traffic conditions where the transit mixers can get held up longer than expected before reaching the site.
Another unique feature is that the flow of the mixture into the silos is steady as compared to other mixers which operate on a start-and-stop pulsation mode, he adds.
Kyokuto’s designs are accessible to all in Japan. “Many might have tried to copy but it would not be easy to do so because of our manufacturing know-how?”, he says.
Beginning of the JV
The JV was born at a time when the Indian GDP was growing at more than 10 per cent per annum, a positive signal for global conglomerates to invest and create subsidiaries in India.
But the positive streak soon faded. Mr. Srinivas shares: “Soon after we started operations, the markets went down. It was tough to do business in these conditions. However, as partners both Kyokuto and the Mithra Group decided to put our faith in the India growth story. This year the sales have started improving already. Looking at the GDP and opportunities in India, we have decided to improve our activities in terms of offering more products like heat bodies, all segments of tipping solutions along with cylinders made in India.”
The JV expected to offer about 100 units a month of 6×4 tippers with 14-16 cu.m capacity and 50 units of mixers a month when entering the Indian market, but is yet to achieve the figures.
Mr. Norimitsu adds: “The current market for transit mixers in India is 3,000 units, and it is expected to grow now though the pricing is not too conducive at the moment.” The Japanese partner is well aware that the competitor in India holds 80 per cent of the market share in mixers. He says: “We know that once the volume increases we will definitely be able to compensate for the losses being faced now.” Mithra Kyokuto SPV expects to touch 60 units per month under both categories in 2016 and 100 units per month by the beginning of 2018.
With the tipper market growing by about 30 per cent, Mithra Kyokuto SPV hopes to rope in major OEMs to cater to. Since the JV specializes in mining tippers it hopes to touch 300 tippers a month as the mining sector opens up further. Mr. Norimitsu says, “we are targeting 750 units in total for the year.”
With the infrastructure segment also opening up, the JV wishes to grow with it by expanding to central and north India where there is higher demand than down south. “In the next six months to one year, we will be present pan-India, notwithstanding stiff competition from market leaders in mining tippers and transit mixers,” he adds.
Mithra Kyokuto SPV is all set to make a steady progress by creating a wide and comprehensive dealer and distributor network across the country for its transit mixers and tying up with major OEMs for its tippers.
