Report: P. Tharyan,
Photography: Mohd. Nasir
Company Description: From
a modest beginning in 1972, Shriram Pistons & Rings Ltd (SPR) is today one
of India’s largest integrated manufacturers of pistons, pins, rings and engine
valves. SPR employs 4000+ skilled employees and has recently set up a second,
most modern new plant at Pathredi, next to Bhiwadi Industrial Area (Rajasthan),
about 60 kms from Delhi, to expand capacity and to offer the latest
technological products to all customers in India and abroad.
Can you briefly tell me about the
Tech Centre at Ghaziabad? How critical is it and how big is it in terms of size
and people?
Our Tech Centre is ready and will be
inaugurated on February 4, 2014, in presence of the Board of Directors. This
will be a landmark for SPR. There is an interesting background to how the Tech
Centre was conceived, what we have done so far and where we want to go.
About
7-8 years back, OEMs began to design and develop more and more engines in
India, instead of using engines of foreign origin. Even where engine designs were imported,
there was a growing need for quick and cost effective change in the design of
critical components like Pistons and Rings, to meet customer expectations and
regulations in India. OEMs wanted
design, prototype development and testing faster and also first time right and
whoever could deliver on these must-win parameters would win the business.
It
was almost at the same time the senior leadership of Shriram Pistons and Rings
had got together to discuss how we must become not only the largest and most
profitable, but most importantly the first choice of OEMs in India. When OEMs think about a new engine program,
they must think Shriram first, for Pistons, Rings and Engine Valves. After
churning several ideas, it was agreed that speed of design, development and
testing, and low cost, will be the winning cards, going forward.
We
immediately got in touch with our partners Kolbenschmidt (Germany), Riken
Corporation (Japan) and Fuji Oozx (Japan) to discuss this idea.
It
did not take them long to appreciate that market leadership in India in future
would be strongly influenced by the on-ground availability of skilled design
and application engineers. It would have to be not only know-how but also
know-why. Accordingly, a capability roadmap was drawn, starting with the
training of our personnel in Concept Design, Finite Element Analysis,
Simulation and Application Engineering. This was supplemented with joint visits
of senior R&D professionals of our collaborators and SPR design and
development teams to OEMs, to understand their needs in more detail and also to
showcase the unique cooperation that exists between SPR and its technology
partners to offer design, and cost optimisation solutions, faster and at lower
cost than any competitor.
Gradually,
we expanded the Engine Testing Lab, increased the capability for simulation,
and simultaneously created the blueprint of a full-fledged Tech Centre that
includes optimisation of tool technology and process engineering for improved
productivity. This is the Tech Centre we have today.
Let
me hasten to add: our goal is to have “art-to-part” capability, as needed by
OEMs in India. However, all this will always be in close collaboration and with
active support of our technology partners. For several aspects of R&D,
including development of new Alloys, basic research in combustion, advanced thermodynamics,
etc. we will continue to receive technology support and know-how from our
partners. Our plan is to offer the best package of design know-how and testing,
collaboratively with our partners. What is best done here to meet customer
expectations will be done in the Tech Centre, and what is better done by our
partners will be sourced from them.
Today,
the Tech Centre is housed in approx. 20,000 sq. ft., has 65 engineers and
technical personnel and equipped with latest rig test equipment, inspection instruments
and software. This is being further expanded as per our long term plan.
What kind of a role would this Tech
Centre play? Will it also be directly involved with the company’s clients to
evolve and build new products?
The Tech Centre is to provide new design of
Pistons, Rings and Engine Valves for latest generation engines. Focus is on
fuel efficiency, light-weighting, long-life and optimum cost. Also, most design
proposals can now be backed with technical data and simulation, to give
confidence to OEMs that the proposed design will deliver the performance, as
expected. This is supplemented with Failure Analysis Laboratory, Engine Testing
Lab etc. for data supported designs.
In
fact, we have already tested engines with our Pistons and Rings for several
OEMs, including MNC OEMs in India. This has reduced the time for development
and enabled design optimisation at substantially lower cost. Bonus for SPR is
knowledge enhancement and deeper customer engagement. And that’s what the Tech
Centre is about: knowledge, speed, solutions and cost.
The Tech Centre is more on the lines
of a R&D centre, so what prompted the company to create such a centre? How
was it before the centre was created?
The Tech Centre is equipped and being
further equipped, to provide end-to-end design solutions. For example, in
addition to the team of design engineers who have all received training abroad,
there is a Prototype Centre, which will enable faster development of prototypes
for our customers and also make quick changes for performance
optimisation. There is a team focusing
on process optimisation in manufacturing, including tool technology. Also, we
have taken steps to integrate Piston and Ring design in a unique way, so that
we can offer a “complete solution” to our customers.
We
have clear plans to further add depth and width to the Design and Development
team, increase the number of Application Engineers to work alongside OEMs,
invest in sophisticated software and equipment, to offer the best products to
our customers and the best technology, at competitive price.
We
have only started the journey and are still on the side of the hill. There is a
roadmap to get to the top of the hill. We are committed to using Design,
Development, Technology and Testing as the key differentiators between SPR and
competitors.
The year gone by was not a great
year for the automobile industry in India, can you briefly tell us about your company’s performance during the year,
both in the domestic market as well as the export market?
Indeed, last year has not been a great year
for the automobile industry in India. If
I was to say that year 2013 was challenging, disappointing, interesting or
exciting, no matter what I say, it would be true! The slowdown in the auto
industry continued through the year. As if this was not challenge enough, we
had high inflation during the year, which kept the customer sentiment subdued,
particularly for discretionary purchases like cars.
The
year also saw unprecedented volatility in the exchange rate between Rupee and
foreign currencies and there were confused signals whether the Government would
survive its full term, whether the economic policy will be tweaked to promote
growth and investment or stay focussed on containing runaway inflation. As you
can see, there was no lack of excitement, no lack of challenges.
Notwithstanding
the tardiness in the auto industry, we quickly reconfigured our business and
are on track to achieve double digit growth in sales and profits this year. How
did we do it?
Even
in a slowdown, there are always some sweet spots for growth. For example, with
the devaluation of Rupee, exports are more competitive than before. Therefore,
we intensified our search for more export opportunities and will grow by 15pc
in 2013-14. Similarly, the tractor market has done well, due to favourable
monsoon and remunerative prices for food grains. The aftermarket, specially
2-wheelers, continues to be satisfactory, so we stepped on the gas in these
segments. Also, there are some segments and markets where our current market
share is low and we are focusing on these to increase sales, despite the
overall lacklustre market.
We
can do nothing about the economy or the rate of GDP growth; hence we must focus
on what we can influence. This includes improving operational efficiency,
multi-skilling of people, improving process discipline to do all jobs
first-time-right and reduce the response time for any feedback from customers.
Also,
we recognise that to be a dependable player, we must never mortgage the future
for the present. As part of this strategy, we continued investments in the new
Tech Centre.
Investing
in R&D, building a high impact design team for the future and modernising
Plant and Equipment through a period of prolonged slowdown are difficult decisions,
but were taken unhesitatingly by our Board of Directors, because we believe it
is only through such forward looking and bold decisions that we can forge ahead
of competition, and grow profitably.
I
think it is Dr.PawanGoenka who said recently that the future automobile wars
will be fought in R&D labs and not showrooms. We agree, and are aligned
with this thinking.
With the auto expo round the corner,
the component show will be held far away from the motor show and will now be a
standalone show at Pragati Maidan. Do you feel that it would be a tad bit
lonesome for the component players as they would be placed away from the OEMs?
It would have been ideal if the Auto Expo
for Components and Automobiles was held at one location, as in the past. However,
the auto industry has grown, the number of players is more than before, the
number of component suppliers is also more than before, and there is no
exhibition site available in and around NCR where Automobiles and Auto
Components can be showcased together.
Under
the circumstances, the best decision was to have the component exhibition at
Pragati Maidan and the automobile exhibition in Greater Noida, about 25 kms.
away, but at the same time.
Despite
the distance, we expect this Auto Expo to be one of the best ever. SIAM and also many OEMs have assured
component manufacturers that there will be Seminars, Panel Discussions etc. on
joint basis. OEMs have also agreed to
depute teams of their Sourcing and Design personnel to interact with the
component manufacturers in Pragati Maidan.
The
vehicle industry and component industry are joined at the hip and have a shared
destiny. Therefore, a mere distance of 25 kms.cannot separate them. Reminds me
of the famous song: do jism magar ek jaan hai hum!
Are you hopeful that the components
industry will see some positive growth in 2014? In case you are an optimist, do
let us know on what you factors you are basing your judgement?
If you are in business, you better be an
optimist! I believe no matter how the economy plays out year to year, the auto
industry will be interesting in India, for many years to come. However, there
may be hiccups along the way. For example, due to the uncertainty triggered by
the impending elections, April-September may be flat in the auto industry. But
there is good possibility of growth in demand from October’14 onwards.
Ownership
levels of motorcycles and cars in India is very low and the latent demand is
very strong. The large number of young
people entering middle class every year are highly aspirational and waiting to
own their first motorcycle or car. Also, we have had so much bad news in the
last two years that even a small turnaround in the economy and improvement in
the job market will lead to a quick change of sentiment and demand for auto
will reappear.
Moreover,
the leading economies of the world, including USA, China and Japan are expected
to post reasonable growth in 2014 and 2015.
This provides an opportunity to increase our exports. The recent
clearing of 125 mega projects by the Cabinet Committee for Investments also
gives hope that large scale investment in Power Sector, Highways, Mining and
other infrastructure projects will resume in the next 6-12 months, with
positive impact on the auto industry.
India
will grow, the auto industry will grow, export opportunities will grow: this
may happen at a trot or a gallop but it will happen. The more important
question is how well we are prepared to benefit from whichever scenario plays
out. We take a long term view of our business. Therefore, Technology, Quality,
Upskilling of people and Exports remain the cornerstone of our business
strategy, no matter how the economy fares next quarter or next year. We are
planning to repeat double digit growth in top line and bottom line in 2014-15, and
stay ahead of the pack.