make different kinds of bearings. Which are the industries you primarily cater
Approximately 65pc of our turnover comes
from the auto sector, another 25pc comes
from railways and the remaining 10pc comes from the industrial sector. Out of
the 65pc which comes from auto, 80pc goes to OEMs and 20pc goes to aftermarket
producers. Earlier we were more into the aftermarket sector but we are moving
more and more into the OEM sector.
you continue to have technical collaborations with some companies for a
specific kind of bearings?
We have two separate collaborations. One is
with NTN of Japan and one is with Brenco of USA. The Brenco collaboration is
for a particular wheel bearing used in the railway back ends. All other
bearings are covered with NTN of Japan. These are technical collaborations only.
The design of the bearings is theirs while all the other development and
applications we have do on our own.
started a plant in September in Savli, Gujarat. Can you tell me its capacity and
the kind of bearings manufactured there?
The Gujarat plant will be completed in
2016. It will have a capacity of 50-60 million bearings. This will add 50pc
capacity to our existing capacity. We are currently doing 100 million bearings
as of now. The plant was set up with an investment of Rs 500 crores and it will
employ approximately 1000 people. It is a fully automated plant. We are trying
to cater to the automotive players who are present in Gujarat. We are also
trying to make use of the proximity to the Mundra port and use that as an
export hub. Around 40-50pc of our production from there will be exported.
company has plants in Rajasthan and Haryana. Is Gujarat offering you the right
industrial climate for Investment? What drew you to Gujarat?
It was not really the Gujarat angle more so
it was due to our customers going to Gujarat. The other reason was that we have
to be near to our component suppliers like forgings, rings and turning
suppliers. One of the hubs is at Jaipur and the other hub is at Rajkot. Another
reason was that the proximity to Mundra port for exports. These are the reasons
we set up a plant in Gujarat. There was no government angle to it.
exports have steadily increased over the last few years. It is now at 16pc of
your revenues. What kind of bearings are being exported and to which market? Are
the US and EU markets big for bearings?
This year approximately 20pc of our
turnover is coming from exports and we hope to add another 5pc to this by next
year. We export a lot of railway bearings, taper roller bearings and ball
bearings. Our number one country to whom we export is the US, number 2 is
Germany, number 3 is South Africa and number 4 is Brazil. We are present in 26
countries. Those would be fairly small as 74pc of our turnover comes from the
four countries I mentioned earlier.
component players have been looking at acquisitions abroad. Why is your company
not doing that?
The bearing industry is a fairly small
community, especially the high-quality bearing manufacturers. You will find a
bearing manufacturer a-dime-a-dozen in China but we don’t want to go down that
path. The high-quality bearing manufacturers are a very small industry and
fairly consolidated so it is difficult to find a good company to acquire.
are the advantages that you offer, is it the cost or quality? What is your USP?
We provide value to our customers. We are a
flexible company and we listen to our customers. Our philosophy is that we
follow the 4Ds which are Design, Development, Deliver and Dialogue. These are
the 4Ds with which we engage with our customers. We are the most flexible
manufacturers in the bearing space who listen to their customers and do as they
want. We feel that we provide the maximum value to the customers and that is
our main strength.
have partnered with ConMet of USA to manufacture pre set hub assemblies. Is
this a value addition? Are there more value additions you are looking at?
It is actually a hub on which the wheel
goes. Earlier we were providing only the bearing. Now we are providing the
entire hub on the pre set form. Which will give a much better life for the
product and it is relatively maintenance free. It is a preset technology
patented by Conmet. Therefore the warranty levels are much higher. It also
gives a better life and again is relatively maintenance free. These are
currently being manufactured in our Jaipur plant. Right now the Jaipur plant is
supplying to Indian customers only. The same products are being manufactured by
Conmet in the US. Our present capacity meets demands of Indian customers. We
are not thinking at exporting this product. If in the future demand increases
we will expand our capacity. We are also looking at other value additions. We
are in talks with some tractor manufacturers where we are providing some value
added products because the bearing goes in a sub assembly and this is used in
the tractor. So we want to provide the sub assembly to the tractor manufacture
so that it can be fit directly into the tractor and don’t have to bother about
pressing the bearings and it will save their time. Similarly we are talking to
other companies as well for such value added products. Scope-wise we are trying
to find a niche as to what value we can add to our customers. For example if
the company has to press the bearing in the hub then we do that job for the
customer to provide value additions to the customer and help them save on man
power, cycle time, etc. I think we are looking at more products like this.
have seen that you have more or less covered most of the OEMs in India. A few
car companies have not been covered. Is there a scope there or do they have
their own dedicated bearings suppliers?
There are three kinds of customers-- one is
where we supply directly, the second is where we supply to the aggregate
manufacturer where they make the aggregate and then supply it to the OEMs and
the third where we supply to companies assembling cars here. As the volumes
keep on growing they will have to look at other suppliers. All the companies
not buying from us will have to look at other suppliers. We are in touch with
them and some day or the other we will supply to them.
do you perceive your company’s growth in the years to come? I have noticed that
exports have grown considerably since 2009 by almost 7 times. Do you see revenues
also growing at a steady pace and what about exports also?
We have envisaged that by 2020 we should be
a 1 billion dollar company. We are working towards that and it means that we
have to grow more than 20pc in our business. This year we are growing less than
20pc but the last four years have had a CAGR of 17.7pc. We feel that if we do
the right things, approach the customers and get the export market we will be
very close to achieving our target. At a situation where we touch the 1 billion
dollar mark exports will contribute 25-35pc. By 2016 we will have the Gujarat
plant fully operational. After that we will have to look to set up a new plant.
We have already bought some land 35kms west of Jaipur which could possibly be
our fifth plant. Right now we are not thinking that we will make some huge
plant. The Gujarat plant itself is quite big and will produce 50-60 million
bearings annually. The new plant will definitely come before 2020. After 2016
we have to definitely construct a new plant. At this point the capacities have
not been determined but hopefully by mid 2015 we will be able to freeze that.
We are progressing in a modular form. So we will make one plant, then fill it
up, then make another and do the same.