Interview with Ramesh Suri
Promoter and Chairman, Subros Ltd.
Company Description: Subros
is India’s leading thermal products company for automotive applications and is
No. 1 in automotive air conditioning in the country with more than 40 per cent
market share. It has a technology partnership with Denso Corporation of Japan.
In 2009-10 Subros completed 25 years in the country with Denso and has
delivered 5 million AC kits to date. Subros has a wide range of reciprocating
compressors, compatible with eco friendly refrigerant. These compressors are
available in different sizes and capacities to suit all requirements and engine
power. Subros is the largest manufacturer of automotive condensers in India.
The company also manufactures HVAC systems. HVAC is an abbreviation for
heating, ventilation, and air conditioning systems —the technology of indoor or
automotive environmental comfort. HVAC consists of heater, evaporator &
blower unit. Apart from this the company also makes tubes and hoses made from
special grade aluminium material with wrinkle free bending and special grade
rubber material.
With a more than 40pc market share in the
automobile air-conditioning space, how do you perceive the growth in the
industry?
The automobile industry is growing at a rate of 18 to
20pc and this year too it is expected to grow by at least 15 to 16pc. We have
to make sure that we are able to meet the requirements of our customers. We
have planned for capacity enhancements at our plants in Noida, Manesar, Pune
and at Sanand. In total we have geared up for 1.5 million units per annum. We are planning to enhance our capacity to 2
million units per annum. This will be done by 2012-13. We have set up a plant
in Chennai to cater to the commercial vehicle segment that includes bus and
truck cabin ACs. We may even cater to the refrigerated vans segment also. We shall also be concentrating on our R&D
activities. We are having discussion with manufacturers like Ashok Leyland to
cater to their requirements. Maybe by end of this year or early next year we
hope to begin production at our Chennai facility.
Since your operations are closely linked to
those of the OEMs, what kind of projects are you working on?
Right
from the stage a vehicle model is developed, we are also part of the
development process. We work closely with the OEMs at a very early stage. A lot
of exciting project are underway. Every manufacturer is planning to launch at
least two models a year, hence there is a lot of scope for growth. Apart from
that, volumes of existing models too are increasing which means that we need to
cater to that demand. We have invested around
98 crore so far in expanding our capacities and more investment is
slated for the next year. It is not only capacity expansion but also
upgradation of technologies, R&D and automation too. Our customers benefit
from our quality products at a very competitive price.
Coming to your Chennai plant, would you be
catering to companies beyond Ashok Leyland?
Yes, of course. We would definitely like to cater to
other commercial vehicle manufacturers based out of South India. We supply ACs
for the Traveller that is manufactured by Force Motors. We started with them
and have been quite successful in providing air conditioners for light
commercial vehicles. We are working with other commercial vehicle manufacturers
for supplying ACs for their smaller vehicles. We are an advance stage of
negotiation with them for supplying such ACs to them. There is a very good
potential in this segment as the demand for commercial vehicles has been rising
for the last one and a half years. We are also working on truck cabin ACs. We
are working with Tata Motors for their global vehicle. There is also a big
demand for ACs coming from low floor buses. Low floor busses are much in demand
in several metros across India. We are at an advanced stage of developing as
well as supplying ACs for low floor buses.
You have inked a deal with Denso Corporation.
What are the broad contours of this joint venture Denso Subros Thermal
Engineering Centre?
They have been our technical partners for the last 25
years now. We get all the necessary
support from them as far as technology is concerned. We have our own R&D
facility at Subros but the basic support comes from our partner Denso. They are
the world leaders when it comes to automotive air-conditioning systems. Now
coming to the joint venture, one must remember that the world is looking
towards India as far as automobiles are concerned. All major players are
setting up base here. As many of these players set up plants here, there is an
understanding with Denso to supply their air-conditioners to them here too. So
for the comfort of these players for air-conditioners and also electrical
components, the same would be developed here in India by this joint venture
company. There would definitely be a lot of time saving as well as savings on
the cost front. Our agreement with Denso is such that we cannot supply our
air-conditioning systems to the global market but only to manufacturers in
India. Of course our systems are fitted in India in vehicles that are exported
from here.
How rapidly is Subros growing in the Indian
market?
We
have been growing by around 20pc and this has been consistent for the last
three years. We are now a 1,200 crore
plus company. This year too we are expecting a 15pc to 20pc growth.
Since Subros cannot export its products out of
India but can supply only to manufacturers in India, does that restrict your
company’s growth in some manner?
No,
not at all. We are the only AC manufacturer that has all the integral parts of
an AC. We manufacture the compressor here, even the condenser too. The HVAC too
we are doing in-house. We are the only company manufacturing all critical
components for an AC. We also have an R&D centre. Our hands are full. But
again, we are working on the commercial vehicle front, we are also working on
refrigerated vans, truck cabin ACs and we are also working for the Railways for
air-conditioning their bogies. We see a
big scope in all these areas.
What about the Suri Group as a whole? What are
the big plans?
As a group we are into hospitality too. The Lalit hotels
are now nine in number. Three more are in the pipeline. We are also into the
education system where we have set up schools in Delhi and Noida by the name of
Step By Step which is rated among the best in the country. We also have a
trading company which is into the distribution of Maruti vehicles. We are now
one of the largest Maruti dealers in the North. We (Rohan Motors) are rated as
a Platinum dealer of Maruti. Each family member is taking care of his or her
respective business area. In every segment of our business we are growing.
So what is your vision?
My vision is to continue working and moving
ahead. Unless you have the fire inside, you cannot keep going. Once this fire
dies out, you stop. If I see any more opportunities I shall look into it. The
fire in me is still there.