Caterpillar Inc. is the world’s largest manufacturer of construction equipment, operating through a worldwide network of local dealers who supply and support the sale and rental of their products around the globe. One such company is Myanmar’s Myan Shwe Pyi Tractors Ltd (MSP CAT). We spoke with Ng Chong Ted, CEO, to learn more about the fruitful partnership.
MSP CAT is the official dealer for Caterpillar products in the Myanmar territory. As such, it is involved in the distribution of high-quality electric power generators, as well as construction, mining and agricultural equipment like excavators, bulldozers, wheel loaders, graders, trucks, pavers and rollers, all supplied by Caterpillar.
However, the company doesn’t stop there; whilst an official Caterpillar partner, it does supply some equipment from other brands in areas that CAT don’t supply; for example, concrete and asphalt batching plants, tractors and other agricultural tools. It sources these products from around the world; from the US, China, India, UK, Germany, France, Thailand, Indonesia and Italy.
As well as supplying this equipment, which MSP CAT makes available for both purchase and rental, the company also provides support services to assist its customers in their experience through a network of 18 branches positioned across the country. These services include maintenance and repairs, with a discount offered on ‘before-failure repairs’; if you bring your equipment to them when you notice something about it isn’t right, but before it breaks down entirely. This incentive saves not only the customer’s funds, but preserves its equipment from needless wear and tear.
Competition is high in Myanmar; the country has been earmarked by many as a promising market, and Ted explained to us. “Myanmar is considered to have a high growth potential due to an abundance of mineral resources and a dire need for infrastructures such as roads, bridges, railway, ports, housing etc.” They have a clear need, and give time, the resources with which to fund it. In business, you need to think ahead in order to be early feet through the door. However, despite the amount of attention the country receives, operating in it has its challenges: “There is a shortage of skilled employees and an inefficient banking system, as well as extensive bureaucracy. Some of these challenges, we can mitigate, e.g. by operating our own vocational school for technicians, but the others will continue to hamper the development of Myanmar and increase the cost of doing business in the country, at the expense of local businesses and consumers.”
Ted feels strongly about the restrictions that are slowing the potential growth of his country, but where MSP CAT is able to make a difference, it does. The company runs an apprenticeship program out of their vocational school in Yangon, where high school graduates recruited from around the country are trained as certified Caterpillar technicians. Training materials for this school are provided by Caterpillar themselves, who also provide training materials for MSP’s existing staff, which allows them to engage in “continuous learning, promoting best business practices and supporting us with Caterpillar’s technical knowledge.” As for graduates of MSP Cat’s school, the qualification they gain makes them employable not only in Myanmar, but anywhere that the Caterpillar global giant operates.
“The school has a separate facility, complete with schoolrooms, an auditorium, computer labs, workshops, simulators and a proving ground where the apprentices can operate machines. We have a Technical Career Development Program catered to our technicians, and we also run our Salesman Career Development program for our sales staff.” MSP CAT currently employs close to 850 people. Out of this large team, almost all of them are Myanmar locals, with only three hailing from abroad, meaning that large numbers of locals are benefiting from the education that a role in MSP CAT provides.
This team of 850 serves over 5,500 customers throughout country, selling hundreds of units and performing thousands of maintenance and repair operations. As the company puts it, 3,467 CAT machines are currently being used to construct Myanmar, and 4,700 generators are powering it. These figures are the result of a recent period of growth: “In the past four years, we have grown our network of branches from four to 18, connected over a thousand machines through telematics, introduced new, successful brands to the market and considerably increased our market share.” The company reached market leadership in 2018 and, next year, it will continue this story of growth by completing and opening its new warehouse and workshop in Yangon.
In part, Ted credits the company’s success to its selective focus; “MSP CAT focuses on the power generation and construction, mining and agriculture industries rather than diversifying into the areas outside of our expertise like some of our competitors do.” The company is also careful to align itself only with reliable, best-in-class brands, through whom it provides equipment it can be proud of. It then pairs these top-of-the-range products with innovative support services: “We introduce technological breakthroughs into the market, like remote monitoring of machine functions through telematics and 3D autograde system that use GPS to provide accurate blade positioning.” Of course, lastly, he also credits the dedication of the company’s team.
Ted has been with MSP CAT since it was founded in 2009: “I joined the company at its inception, starting out as the CFO before adding on the role of CHRO a few years later. I assumed the CEO post in January 2019, having held the dual position of CFO and CHRO for the past seven years.”
We asked Ted what he felt was the right approach to take to leadership: “The CEO should provide clear directions for the company by making rational decisions and understanding the challenges faced by the staff, and should motivate and rally the staff to overcome challenges.” A part of achieving this, in Ted’s mind, is open and accepting communication between leadership and employees, requiring “regular engagement of staff, listening to their views and accepting their suggestions or proposals whenever they are sensible and rational.“
Regarding the future, Ted is confident that MPS CAT will continue to flourish, despite the difficulties currently being faced by the country’s industry as a whole: “We believe that the long-term prospects for MPS CAT are good, although we face challenges in the short to medium-term as the country overcome its own sets of challenges and grows. As a sign of confidence, we are building our own integrated facility in Yangon on 11.5 acres of land to house our yard, workshop, warehouse and office building.”
This faith is not built on hope alone, however. The company continues to be strategic, and is currently preparing to respond to the needs of a demand that it predicts will emerge as industry in the country rises: “We believe that the machine rental business will grow, especially as more and more foreign companies come into the country. By renting our machines, they can focus on what they do best for their investments and business, instead of spending resources acquiring the machines, operating and looking after them when many of their machine requirements are short-term. As part of our focus on this business, we have decided to set up a separate entity and work with a local leasing company to finance these rental machines.”
With all of these changes on the horizon, it seems that MSP CAT isn’t letting anything slow it down. We look forward to revisiting the company in the future to see how its new subsidiary is fairing, as well as Myanmar’s greatly anticipated construction boom.