DIMO: Navigating Turbulent Tides of the Sri Lankan Construction Industry

Chaminda Ranawana, Executive Director of DIMO, shares insights into the construction business amidst challenging market conditions since 2020 and its impact on the construction machinery industry in Sri Lanka and beyond. 

Ranawana begins this interview with an overview of the construction sector and its outlook for the immediate future, including opportunities and challenges. Sri Lanka’s construction sector has been facing an array of challenges, starting with the onset of the COVID-19 pandemic in April 2020, which triggered a series of socio-economic issues. These challenges were further aggravated by political unrest, eventually culminating in an economic recession. In response to these formidable challenges, the government took swift action by suspending ongoing construction projects due to a lack of available funding for their continuation and compensation of contractors. 

“This decision had widespread repercussions, leading to a significant reduction in income circulation across all sectors of society,” Ranawana says. Major contractors were compelled to downsize their operations, reluctantly releasing employees they could no longer sustain. In some instances, even international contractors were forced to cease their operations entirely.

However, Ranawana points to reasons for optimism as recent developments suggest that the government has proactively taken steps to revitalize the construction sector. This includes allocating funds from the proposed 2023/24 budget, as outlined by the President. Additionally, efforts have been made to facilitate foreign funding and resume stalled projects, such as the Central Expressway and other integrated road networks, water infrastructure development, and positioning Sri Lanka as a key logistics hub in Asia. These initiatives hold the promise of kickstarting development and attracting much-needed investments to our country. 

Excerpts of the interview are as follows:

What are the immediate challenges confronting the construction sector?

A significant challenge on the horizon is the emigration of experienced workforce to foreign markets. Many young, skilled, and educated individuals from the sector are seeking opportunities abroad, resulting in a shortage of skilled labour in our domestic workforce. Concurrently, the existing workforce is increasingly demanding higher wages, further complicating the task of meeting project deadlines for both the government and contractors. Additionally, bureaucratic hurdles persist between government institutions, adding to the complexity of the process.

In navigating these multifaceted challenges, collaboration, innovation, and effective governance will be pivotal and we are hopeful that with concerted efforts from all stakeholders, we can collectively work towards the resurgence of the construction sector.

In the current scenario, with the construction industry’s recovery underway, what is your outlook for DIMO’s construction machinery business, and what strategies are in place to capitalize on the recovery?

DIMO’s resilience shines brightly during turbulent times, showcasing its remarkable ability to weather adversity and seize emerging opportunities. While some businesses in the same industry may have chosen to contract or withdraw from operations, DIMO has charted a different course—fortifying its teams through comprehensive training and development initiatives. Instead of downsizing in the face of challenges, DIMO has chosen to retain its highly skilled workforce equipped to confront new obstacles and actively explore fresh opportunities.

The strategic reduction of stock holdings and the initiation of export initiatives, encompassing both used and new units, have delivered substantial benefits, effectively establishing a new and fruitful line of business for us. Furthermore, we are committed to providing exceptional services by an experienced and highly proficient team that spans all aspects of the business—whether in sales, parts, or customer support services within the country. This unwavering dedication extends to our overseas customers in the Maldives and Bangladesh, where we operate during these uncertain times.

Could you elaborate on DIMO’s global expansion efforts in the construction machinery segment, particularly your presence in Bangladesh and machinery provision to countries like Maldives and Dubai? How has this contributed to the company’s growth and market reach?

DIMO’s forward-thinking approach has played a pivotal role in the company’s growth, especially during challenging times when expanding overseas operations was imperative. In addition to our existing inventory of used equipment and machines repurchased from customers for export, we set our sights on entering new markets, with a particular focus on Komatsu machinery.

Recognizing the absence of Komatsu representation in Bangladesh, we promptly approached Komatsu to express our interest. DIMO possessed the necessary resources and believed in the economic benefits that this endeavour would bring, not only to our organization but also to the country, particularly during an economic downturn. After successfully securing distributorship status, we strategically invested in line with Komatsu’s rigorous standards.

This achievement was noteworthy, considering the substantial competition from other parties vying for Komatsu representation in Bangladesh. The construction and infrastructure development industry in Bangladesh was experiencing a significant 10% growth rate, and with a population of nearly 180 million, it presented immense opportunities. Despite numerous manufacturers, including Chinese competitors, DIMO’s longstanding relationship with Komatsu played a pivotal role in securing this partnership. Komatsu was well aware of DIMO’s five-decade track record of providing exceptional services to Komatsu customers in the Sri Lankan construction industry.

DIMO has since become a distributor representing Komatsu in three countries: Sri Lanka, Bangladesh, and the Maldives.

Our involvement in the Maldivian market dates back over 20 years, with a strong presence in the construction and material handling sectors. We have nurtured enduring relationships with various industries, including government projects, significantly contributing to our overall growth.

Our expansion into the export business was a strategic move, driven by the economic downturn and the surplus inventory resulting from reduced construction activities over the past 2-3 years. While some machinery was returned to our principals, we encountered the challenge of finding alternative markets. The Middle East emerged as a logical choice due to its substantial demand for such equipment. It serves as a hub where customers from Africa and other regions source these products. We seized this opportunity during the recession and have continued to develop it as a new business line within our diverse portfolio.

Can you share specific examples of how DIMO’s products and services have benefited the construction sector, elaborating on your focus on innovation and expertise in air compressors, concrete equipment, earth moving, quarry and mining, road building and compaction?

We are driven by a commitment to quality and excellence and our portfolio boasts renowned brands that exemplify our dedication to delivering top-notch offerings and services.

With Komatsu, we’re setting the Asian market standard with our eco-friendly hybrid machines. What sets us apart is our exclusive use of Komatsu-manufactured units, ensuring unparalleled quality for our customers. Our diverse equipment range and various attachment options provide versatile solutions for diverse applications.

Turning to Bomag, our compaction range from Germany caters to a wide array of construction needs. From hand-held rammers to advanced milling machines, our offerings are designed for diverse environments, including urban areas, challenging terrains, and embankment construction. Our compact and manoeuvrable vibratory rollers and Padfoot rollers, along with innovative features like the Economizer, enhance operations optimisation.

Kaeser Compressors, another jewel in our line-up, utilizes Sigma technology to efficiently manage compressed air generation and consumption, eliminating energy waste for optimal efficiency.

Potain builds more than 60 types of tower cranes to fit a wide variety of job sites with reliability and innovative designs.

Our GEHL Skid Steer Loaders offer safety, comfort, ease of maintenance, extended warranties, and online monitoring, making them a dependable choice for operators worldwide.

Customer service is paramount at DIMO. Our Customer Services division comprises experienced engineers and service advisors who regularly visit customer sites, inspect machines, and provide professional advice at no cost to our customers island-wide.

We take pride in our technical expertise. Our technical staff stays abreast of the latest technologies from manufacturers, receiving comprehensive training under the supervision of senior officials with both manufacturer and local training. Our commitment to learning is further bolstered by our use of online Learning Management Systems (LMS) platforms.

In the construction machinery industry, timely delivery of spare parts is critical. DIMO understands this importance and maintains fast-moving stocks in our inventories. For emergency spares, we import directly from our centralized warehouse in India, with service points in Singapore and Thailand for prompt customer support.

Finally, we offer service packages tailored to our customers’ preferences, including Annual Maintenance Contracts (AMCs) and Full Maintenance Contracts (FMCs). Standard services during the warranty period ensure the longevity and optimal performance of the machinery.

The construction machinery sector has seen significant technological advancements. How has the adoption of the latest technology reshaped DIMO’s offerings, and can you highlight any notable innovations or partnerships that have positioned DIMO as a leader in this field?

We have elevated the customer experience and machine management with the introduction of the KOMTRAX Remote monitoring system for various Komatsu Machines in the market.

KOMTRAX allows customers, including owners, managers, and operators, to seamlessly monitor machine performance through a web-based platform accessible from anywhere, anytime. This system empowers users to make informed decisions that directly impact their bottom lines, boosting operational efficiency, and productivity, and reducing ownership and operating costs.

One key advantage of KOMTRAX is its ability to detect machine abnormalities, generating timely alerts. We can swiftly connect to Komatsu’s troubleshooting support system to minimize downtime and ensure uninterrupted operations for customers.

KOMTRAX also equips us to deliver unparalleled product support, providing operational feedback, customer services, and efficient planning for parts, service, and equipment requirements. Additionally, DIMO offers extended warranties for the latest models, providing added protection and peace of mind for our customers in local and foreign markets, including the Maldives and Bangladesh.

How has DIMO incorporated sustainability into its construction machinery solutions?

We’re the first in Sri Lanka to pioneer hybrid technology in excavators, offering significant benefits. Our Komatsu hybrid system cuts fuel consumption and emissions by up to 40%, thanks to enhanced engine management. This means lower operating costs for our customers, reduced environmental impact, and increased profit margins.

What are DIMO’s plans and goals for its construction machinery segment?

“DIMO’s forward-looking strategy revolves around seizing new business opportunities through advanced information utilization, fostering efficient stock management, and tailoring our present product lines to cater to diverse applications. A pivotal aspect of our future involves a dedicated focus on introducing an innovative range of equipment designed for the evolving needs of the construction and waste management sectors.

DIMO’s Construction Machinery segment is poised to capture an abundance of opportunities which are going to come soon with projects highlighted by the Government in the proposed budget.

By staying well-informed and proactively aligning our offerings with these upcoming projects, our goal is not only to meet the needs of our customers but also to contribute to the development of the country’s infrastructure while fuelling the dreams and aspirations of the nation.