Innovation is the key to growth for Kemppi which was the first to bring the inverter technology to the welding industry”
– Rashmi Ranjan Mohapatra, National Sales Manager, Kemppi India
Amidst the economic downturn, Kemppi India has maintained 65 per cent year-on-year growth. It is on course to become the No 1 equipment selling company in India. Rashmi Ranjan Mohapatra tells how Kemppi has bucked the trend during the challenging phase.
Welding industry’s link to steel consumption patternIndia’s per-capita consumption of steel has gone up by around 25 per cent in the last 5 years to 57 kg in 2011 against 45.8 kg in 2007. World Steel Association (WSA) data revealed that barring 2008, when India’s steel consumption dipped to 45.1 kg against a year ago, the growth in consumption was steady every year.
Notwithstanding the marked improvement, India still lags far behind the world average of 214.7 kg and China’s average of 459.8 kg. The average is worse when compared with other Asian peers like Japan and South Korea at 506.7 kg and 1,156.6 kg, respectively.
The Asian average stood at 238.8 in 2011. In the EU, it was 310 kg and in Commonwealth of Independent States (CIS) it was 212.3 kg. Per-capita steel consumption was 263 kg in NAFTA and 233.9 kg in the Middle East.
India’s total steel consumption in 2011 was 67.8 million tonnes, up from 64.9 million tonnes a year ago, the WSA said. China’s consumption was the highest at 623.9 million tonnes.
During the 10th Plan (2002-07), both consumption and production of steel in the domestic market had witnessed fast-paced growth. The momentum was maintained in the first year of the 11th Plan period. However, the pace slowed since 2008-09 mainly because of the global economic slowdown.The production of steel in India was 68.9 million tonnes, an increase of just 2 million tonnes over the previous year. However, like in 2010, it continued to hold fourth position among the major steel producing nations in the world.
The performance of welding industry in India is directly linked to the steel consumption pattern in the country.
This clearly indicates that the industry is in a stagnant mode, but there is a huge potential to grow. Power, infrastructure, and shipping segments have shown stagnation during the last year, directly impacting the welding industry.
Growth in 2012Kemppi as a group has grown over 12 per cent. It is to be noted that European economy was down by 0.5 per cent in 2012. Amidst all this turmoil, it has been a great achievement for Kemppi.
Kemppi India has grown by over 65 per cent year on year. It is on course to become the No1 equipment selling company in India. The company has bucked the trend during this testing phase in the country.
Kemppi and innovationKemppi works very closely with the customers. The whole endeavour is to bring joy in welding. Its products are designed to address the challenges faced by the welders. Its solutions are mix of equipment, software and services.
The idea is to make the customers use its strength to their advantage and increase their productivity. It develops products exclusively for segments where they get direct benefit from the equipment.
Kemppi has launched several products in 2012 which had brought tremendous market share. Its ArcQ welding management system is the first of its kind software which changes the face of welding. The grimy, mundane job of welding can be monitored by software and the user can have the data in real time.
Innovation is the key to growth for Kemppi which was the first to bring the “inverter technology” to the welding industry. Kemppi continues innovating.
Counterattacking challengesKemppi doesn’t see any constraint in the market. These are challenges where it has to work differently. The company uses its resources in the right way and come out stronger. It believes that during slower production, it is easier to try new technologies, establish new process and become partners with the clients to share their impending growth. As one of the technology leaders, Kemppi also educates customers in new process and helps them shift the process for higher productivity and profits.
The data in the first point is a definite cursor for the industry. Indian market can only grow in leaps and bounds. Challenges are only to make the players more resilient!
InnovationKemppi has been clear in its segment plans. This has helped it to deliver growth of 65 per cent in 2011. Kemppi has taken a series of initiatives. Its MIG machine HiArc M 400 I was the game changer in the MIG market in India. Kemppi leads in benefits like productivity and savings and stands out in the market.
As the welding industry moves toward more of aluminium welding, Kemppi machines stand out at the customer place. It is one of the leading suppliers of pulse MIG machines in India. Kemppi keeps on bringing products specific to the needs of the customer. The customer understanding plays a major role in addressing and achieving the desired result.
India’s prospect to be 5th largest manufacturing countryFor India, being the 5th largest manufacturing country is easier said than done. Manufacturing has been a suffering sector in India and contributing only 16 per cent to the GDP, while manufacturing sector has grown much faster in other emerging economies like China, Brazil, and South Africa.
Catch 22 situation in IndiaThere is one particular industrial shift that should concentrate minds. As China’s workforce shrinks and its wages rise, up to 85 million manufacturing jobs might migrate elsewhere. Here surely is an opportunity for India’s underemployed young hands.
Why shouldn’t those jobs come to India? The answer is that India has few of the right sorts of firms or workers and too many of the wrong rules. There are certainly some impressive Indian manufacturers, especially in car making, but the likes of Bharat Forge and Mahindra & Mahindra prefer to employ sophisticated machineries rather than abundant labour. At the other end of the spectrum are innumerable tinpot workshops, employing handfuls of people and outdated methods. What India lacks is a Mittelstand of midsized, labour-hungry firms. Even during the boom years, it created many more jobs in construction than in manufacturing. It is hard for India’s young to raise their sights when they are carrying bricks on their heads.
To fill this missing middle, the government should remove some of the bureaucratic bricks that now weigh on the heads of India’s entrepreneurs. These include India’s notorious labour laws which, on paper, prevent factories firing anyone without the state’s permission. It is true that by hiring labour from third parties, the country’s employers have blunted the law’s effect. But in doing so, they have also blunted their own incentive to train their workers and lead to more abuse. Skill programs for rural migrants and urban poor are a must to overcome this huge gap.
Remedies to attract industry• India should develop its infrastructure like China to attract industry. In India, Gujarat and Karnataka stand out in manufacturing as they don’t have power and transport issues. These are role models to be followed.• Unclog the energy sector. Kemppi’s new power plants are worth little without enough domestic coal and gas to feed them. This is critical to growth.• Land acquisition: The approach of the government is based on flawed legislation. This needs to be streamlined to ease the investment process.• The familiar reforms: Streamline decision making, curb corruption, fiscal discipline to tame inflation.• Ramp up manufacturing sector growth to 14 per cent from recent 7.7 per cent.• Increase depth in manufacturing with focus on domestic value addition.