The truth about Dutch Lanka Trailers

It might be a simple coincidence that it was Indian-born Mahatma Ghandi who said that the spirit of democracy cannot be imposed on someone but has to ripen on the inside, but if you talk to Sambasiva Ramasubramanian, widely considered the doyen of Indian trailer building, you cannot help but detect the same thoughtfulness when talking business.

Then again, his company is located in Sri Lanka, the oldest democracy in Asia, so the allegory may only come natural to him. “Like with any good idea, you can’t just force someone to have it. Ghandi, who also said that the customer is the purpose of the business, knew that, because it is something we all know deep down, naturally,” he says. “For us as a commercial entity, it means you have to lay the right foundation before you can go and scale up. Otherwise the product will fail you.”

Ram, as he is known in the international trailer design scene, was called to head Dutch Lanka Trailers (DLT) as Director and CEO in 2013 by Sudhir Deoras, Managing Director of Tata subsidiary TRF and Chairman of DLT. An engineer by trade, he had played a central role in building up Indian OEMs PL Haulwel and Tranztar, which eventually got him on the radar of the giant Tata Group, DLT’s parent company. Since then, Ram has helped scale up DLT to take on a more international role in the region and beyond.

“The great thing is that I had the right basis to commence with. We build a good product and want to deliver something of value, so the foundation is there,” he says without concealing his excitement. “My job is to consolidate our efforts in line with Tata’s Code of Governance and prepare the company for global growth, which is something not many competitors from South Asia have achieved yet.”

Ram’s excitement is not for no reason. After a decade of isolation, Sri Lanka is currently repositioning itself geopolitically, which could present the local trailer building scene with a host of new opportunities down the line and “offer thrust to DLT’s dreams,” as he puts it. “If you look at the current political situation, the opportunities could be endless if it weren’t for the murky global economy. Then again, setting up the business anticyclically can be an advantage, which is why we keep exploring other markets and perfecting our product line-up.”

According to Ram, that line-up has always been quite export-oriented, covering both the port and road trailer segment of the market. “We know where our strengths lie and want to build on that. Our terminal trailers, for example, are standard equipment for many globally renowned operators – including APMT, DPW, Hutchinson and Gulftainer. We currently have more than 3,000 of them in operation worldwide, with capacities of up to 60 tonnes each,” he explains – adding that DLT mainly uses running gear designed and manufactured by fellow Tata company, York.

“We like to make sure that everyone in the supply chain – right through to the axle supplier – is involved in getting the best out of our product, and the effects are already visible. With our portfolio improving, we are now winning contracts that may have gone to Europe or China in the past, which is testimony to our products’ growing quality and price competitiveness.”

Going forward, Ram plans to also enlarge DLT’s global footprint in the Middle East and Africa, where demand is currently growing exponentially. “Building on the Tata pedigree and our own entrepreneurial spirit – backed by an extremely supportive Board – I have no doubts our ambitions plans will come to fruition very soon,” he says, revealing that moving production closer to demand is a key building block of his strategy.

After a recent €4.2 million upgrade to the company’s Sri Lanka factory, the company is set up to build up to 3,500 units annually, but Ram is convinced that DLT needs more capacity outside Sri Lanka too. In neighbouring India, which is still the top target market on his list, DLT has therefore set up a Joint Venture with Tata International in Pune and Jamshedpur, and Ram hopes China will soon follow suit.

“Geographically, India makes a lot of sense for us of course, but we don’t just focus on that,” he says. “Whether India’s momentum is short-lived or sustainable hinges on whether the new Government can push through deeper reforms, so we won’t put all our eggs in the one basket. The Middle East and China are very interesting for us, and we also have equipment on the ground in Africa and South America now.”

Even though shipping costs are comparatively high for a manufacturing business based in Sri Lanka, Ram says low labour cost and high product quality would make up for that shortcoming until more manufacturing sites are set up locally. “Being able to provide a quality product at a competitive price is our key selling point. But our main competitors in Europe and China are not slowing down either, so it’ll be interesting to see who has the right sales strategy.”

Ever so considerate, Ram says DLT’s unique selling point is the brand’s heritage. “If you look at where Sri Lanka has come from, it will give the product a whole new dimension. It’s just as much a symbol of a Sri Lanka that is emancipating itself globally than a well-engineered steel frame pulled by a truck, so there is a really powerful message behind it,” he says.

More pragmatically, Ram adds that Sri Lanka’s geography has taught DLT about port applications – a growing segment in the ever-tightening transport equipment market. “As an island state, we live and breathe port transport, which is why our port trailers are our most successful product. We have a 30 per cent share of the port trailer market in the Middle East, for example.”

Despite that success, the company still has to overcome some reluctance from those using European equipment, and Chinese dominance in Port Infrastructure financing, he says. “It’s been a challenge but as I said, we have a good point to make. And once our equipment is actually in use, the rest usually falls into place.”

In the road trailer segment, Ram says Sri Lanka and Bangladesh are DLT’s main markets, with a share of around 65 per cent in each region. But according to the ambitious CEO, there is much more potential – especially in South Asia. “We don’t just service the container transport business, but also build equipment to carry general cargo, cement and even petroleum products. We have all the basics in place to grow much larger in the future,” he says. “But we have to be reasonable too. In 2007, the DLT management predicted we’d be building 6,000 units annually by now, and then the GFC brought it all to a halt. My job is to keep that in mind and be mindful of where we put our resources.”

Again, being based in Sri Lanka is seen as an advantage. Referring to the World Bank’s “Ease of Doing Business” ranking, Ram says Sri Lanka was 43 spots ahead of India, which is ranked 142 out of 189 nations, with first place indicating the easiest business environment. “The regional average is 134, so we’re doing well, and that will help us get where we want to be.”

Ram says the Sri Lankan Civil War that ended in 2009 and the market bubbles that followed the war’s end through 2011 are “in the rear view mirror” now, and even though they are still lurking and causing hesitation for some, “the framework is right for bigger and better things to come.”

At the core of it, however, must be the commitment to building a strong foundation. “Just like I believe good quality must come from within, from the people who engineer and build a product, success on the global stage must come from the management practices that are at the heart of the business, and that’s where people like myself come into play.”

Despite being overseen by multi-national powerhouse Tata, Ram says that “small truth” is what he found most important about leading DLT to success. “It’s not about quoting Ghandi or making a ostentatious comment about democracy though. It’s a great allegory, but for me it’s simply about getting the basics right – and that’s something a great company like Tata can teach you. It has to come from within for those on the outside to buy in. Both figuratively and literally.”

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