Interview with Aditya Arora, Chief Operating Officer, Base Corporation Ltd

Report: P. Tharyan, Photography: Mohd. Nasir

Base Corporation based in Bangalore is one of the fastest growing lead acid battery manufacturing company in the country. The company makes batteries from 2.5Ah to 200Ah for a varied range from two-wheelers, automotive, inverter, generator, UPS, solar etc. The company has been accredited with certifications like ISO-9001, 14001, TS-16949 besides having type approvals from CIRT, Pune for Bus batteries and MNRE for 12V Flooded tubular batteries of various capacities. It has the distinction of being the first Indian battery company to have tailor-made a special battery for an F1 car.

Your company is among the leading battery makers in India. How good is your standing in the automotive industry both in the aftermarket as well as OE, in case you are present?

For automotive batteries we are the number four player in the country. It’s Exide, Amaron, SF (which is another Exide brand) then Base. Base is one of the brands which carry an entire portfolio of products from the conventional two-wheeler battery to a maintenance free car battery. We have a spectrum of products within the automotive space.

The company was established in 1987. That makes you a second generation entrepreneur.  Can you take us into the genesis of the company?

We have a very interesting story there. My father Girish Arora was the eldest among the five children in his family. His parents were principals in government schools. The entire family had gone through studying BA. The family wanted him to study BA also. They wanted him to become a teacher too. He had an entrepreneurial streak in him. He told his parents that he was studying BA, but went on and joined the Delhi School of Economics where he did his BCom. Only when he graduated did his family know about it. Having graduated, he started a small time businesses. He started by trading in school bags. From there he took on refurbishing of Xerox machines. He used to import broken machines and then repair and sell them here. Then he got into importing batteries. Those were the first VRLA batteries that came into the country in 1987. So he imported them and supplied them to his customers. In the process he realised there is a huge potential here in India for batteries. That time we were working with another brand. Within five years that brand got a very decent reach and then their parent company had a tie up with Exide. We were then not allowed to sell that brand any more. Immediately from there we shifted to Panasonic.  This was about 1992. We became the national distributors of Panasonic VRLA batteries. From 1992 to 2000 we grew their business tremendously.  We grew from a  strength of 4 employees to 70 employees, a turnover of Rs 50 lakh to around Rs 30 crore.  Having grown so much, Panasonic told us to take their automotive batteries also. That’s when we decided to jump into aftermarket.  Till then we were a pure B2B player. We did a lot of branding initiatives, etc. So much so our market demand that we generated was more than two times what Panasonic could supply to us. That fired. We started losing market share because of the supply constraints. We then came to a conclusion that unless we manufacture our own batteries we would not be able to supply more. We worked with Panasonic for a few years, set up our own R&D initiative and even launched our own brand. For that the batteries were sourced from abroad. Simultaneously we worked on our own battery with a research team in Taiwan.  But importing batteries and selling them here was not the answer because of high import duties, etc. In 2005-6 we established a small manufacturing unit in Solan, HP. We started  manufacturing and later moved into a bigger space. The bigger space has expanded for the fourth time. An investment of Rs 250 crore has gone into this plant. The plant was designed to make automotive batteries, VRLA, tubular, etc. We were limited to a certain extent in terms of space. We have to maintain at least six months stock. The back office team decided that the time had come to set up a much bigger plant. It’s then we set up our Hosur units. The Hosur unit will be the biggest battery plant in India. It comes in the top 10 in South East Asia.

You are a sport enthusiast with great interest in super cars and car races, besides other sporting events. Is this the reason why your company is now more inclined towards associating with the sports fraternity? Does the sporting spirit run in the family?

I too have a very interesting entry into the family business. I never wanted to join the battery business, rather I wanted to start a new business. I have been an auto enthusiast all my life. I wanted to study auto engineering in Germany and design my own car and invariably at some moment, manufacture my own car. My father told me that if I had to start my own business I had to understand how business is run. He asked me to work for him for two to three years, understand the dynamics of business and then do whatever I wanted. When I joined he put my through rigorous training and I even used to deliver batteries for the first four months. I would drive to the office, pick up my broken down Maruti van and then go from dealer to dealer in Bangalore city delivering batteries. As I interacted with dealers I got to know a lot about the batteries, shortcomings, etc. I had a lot of solid raw data with me. Then I went through training in logistics, supply chain, accounts etc. After my training I realised I wanted to go for marketing. The goodness of the work is that he gives me a lot of freedom.  I realised that the batteries were more skewed towards male audience and hence we had to do something for them. We chose sports to get close to our male audience. The World Cup cricket was happening and we tried figuring out how we could associate with the sport without spending too much money. That’s when cricket Canada came in and we created a connect. The best thing was that eight of the players were Indians. We associated with them and it was very good. They were a smaller team and had never been to India. They had basically come here to holiday and not play cricket. The players took a lot of interest in our activities where we had dealer meets, we called our distributors, let them do a fashion show. We had created a Bijlipur advertisement campaign. We made them dress like people from Bijlipur. That was a great association.

After that came Formula One and this sport gave us a huge edge.  Today 60pc of my sales comes from invertor batteries. That’s a high value product and has a huge market also.  From the brand positioning we realised that I rather be an automotive player also selling batteries, than an invertor players also selling auto batteries. Till then our brand was considered an invertor brand. We had to be known as an automotive player and what better than being associated with the most demanding sport of all times, F1. We got in touch with Narain Karthikeyan who was then a driver with HRT. We associated with them and had a logo on the car. We did this deal and became the official supplier for names sake. After the deal was through we asked them what batteries they used and they told us it was VRLA batteries. We asked them to send us two samples so that we could re-engineer them and send it back. We could then become actual suppliers to the team.  They sent us a produce, we reengineered it. Two guys from here went to Spain and tweaked the product. Eventually we did come out with a Formula One battery for them. They were very happy with us. We then became an actual official supplier to an F1 car. Branding wise it was great. We had two dummy cars, one in Delhi and one in Bangalore on display at the various malls. We tried to engage people as much as possible. That made a huge difference to our brand from being an invertor brand we became an automotive brand.

Today we have 15,000 retailers in the country. In order to cater to their demands, I would have to operate my plant at 250pc. That’s the reason why we limit ourselves in the market.  We have stopped advertising for the last one and a half years because there is no use to generate more demand when there is already so much demand which we are not able to manage.  Our product is a low involvement grudge product.  There is hardly an involvement when it comes to purchase of a battery and the grudge is because you are forced into buying a battery whether you like it or not.  Just because I tell you Base is a very good battery, you do not buy ten of them and keep it at home. This year we have tried to create a connect between our product and our logo. We have just splashed that all over.

Coming to your plant in Solan, what is the capacity there and what are the utilisation levels?

Our Solan plant has a capacity of 16 million ampere hour. I can make a battery which is around 200Ah that goes into a truck or make a 40Ah which goes into your Maruti 800. So if I make all 200AH batteries then the quantity is less. While if I were to make only 40AH batteries I can make a huge quantity. That is the reason why we measure the capacity in ampere hour. Sixty thousand ampere hour  basically means 80,000 to 1 lakh batteries per month.

You are also coming up with a new plant in Hosur. Has it started because the deadline was 2013?

It starts with 100 million ampere hour capacity. It will expand to around 250 million ampere hours. We had some delay in the civil work. We found a lot of stones on the land which the geology report did not pick up. First we tried JCBs to remove them but it was way too rocky. Then we got clearances from the government to use dynamite to flatten the land. That set us back by 4-5 months from our original time period. We should start rolling out batteries from March 2014. But it take a couple of years to stabilise a plant. The idea of Hosur was economies of scale. The market grows by around 20pc every year. IN five years it’s going to be a Rs 50,000 crore market. I do not think all of us manufacturers put together can cater to that demand. We therefore thought lets be the first mover here.

You have established two international offices in China and Dubai. This definitely would have mean exports is going to be a focus area. DO you currently export? What kind of business are you looking at for exports?

Yes, we have one office in China which is a very old office. That does a lot of sourcing, R&D, and quality control. We do a lot of imports even now like UPS or some very niche products that do not make sense manufacturing here in India. That office has research guys or scientists who got to the different plants and do the quality checks before it lands up here.  Our Dubai office is going to be an export office. We just set it up. What this office will do is first cater to the Middle East, and then concentrate a lot on the African trade that happens from Dubai. For Middle East the focus would be automotive while for Africa the focus will be on invertors.

As of now we do not export batteries out of India. We are unable to cater to our local demand .

On the technology front, what has been the evolution for batteries, especially automotive batteries?

Today around 45pc of our battery market is unorganised which means there are entrepreneurs sitting at home and making three batteries a day and selling them and surviving. The technology behind battery is pretty simple. You take lead and react it to sulphuric acid and you get two volts. You put six of them in a plastic container you get 12 volts.  If you are looking at longevity, consistency, etc then lot of chemistry comes into play. It’s quite a complex procedure. The usage of batteries has changed over time.  Initially batteries were used for starting, lighting and ignition (SLI) inside a vehicle. Now it has become much more complex. People have powerful music systems, we have power windows,  sun roofs, etc, so the general requirement has gone up. Further we also have a start stop system in place in vehicles. That takes a full toll on the battery. Then there are tin technology, calcium technology and hybrid technology where you can mix lead with other metals and try and get a better performance. A lot of innovation and R&D goes into products.

What is the road ahead for you and your company?

We are a company that has grown from nothing. My father borrowed Rs 50,000 from SBI and started this company. This year we shall hopefully close at Rs 1000 crore plus. That’s been quite a journey in 26 years. Having come here we see two different and clear paths for the company. My father is very focussed on batteries. He is keen to explore new technologies in making batteries.  With Hosur coming up we cannot focus on anything else for the next three to four years. We are keen to establish ourselves among the top three players in the country. We shall then create Base as an anchor brand and company and start diversifying into different segments.  I have two three small projects running which are very small but all have a potential to become big in the future. There is a sports management company that we are running right now which has got nothing to do with batteries. We have a supercar club that we run in Bangalore. Apart from that we are trying to affiliate with the Chennai Club and start a Hyderabad Club. We are trying to do something for the B towns where there is a huge supercar population.  The supercar club proceeds are given to charity. For the time being we are into batteries and renewable energy.