We basically emphasize on standard products

January 12, 2010 5:08 am

Corrado Torelli, Chief Sales & Marketing officer, WAMGROUP S.p.A and  Anil Manduskar, Managing Director, Wam India Pvt Ltd, in an interface with OEM Update.
 
How do you look at the equipment manufacturing sector?
Torelli: I found expositions like EXCON 2009 very promising. We have discovered that majority of foreign companies are searching for a partner to set up manufacturing unit in India. I think India has the quality and technology comparable to other countries, and labor cost is very reasonable here. We are growing ourselves and planning to establish a new manufacturing facility for adding new product range to enhance our potential to manufacture in India.
 
Manduskar: There are problems of a different kind, but each one is a ground level problem, and operation-based. In our sector, we do not have enough qualified/trained people. I don’t mean academically qualified, but experienced people to operate the equipment. We are going for new technology, which is required for certain kind of jobs. If we face any problem there, you can imagine five years down the line what it would be like. Unless, we attend to this problem with all seriousness, we will be short of qualified & experienced operational manpower. 
Some OEMs, therefore, are moving in the right direction like we are. We are hiring new people and investing in them. We believe that in this so-called recession, we should follow the Toyota example to invest in fresh manpower and get ready for the future. We want to impart proper training to freshers and expose them to new technologies. This is the area where we can invest during this time. As a company we have begun exporting. Both local and world markets have confidence in Indian manufacturers in terms of quality & reliability. We have technology transfer from Italy, and are proud to say that we export our products with the same WAMGROUP brand name and quality, to the Middle East market. 
In the recent BIG-5 Expo in Dubai, we presented exactly the same product we exhibited at EXCON 2009 in Bengaluru. It is great to know that people are now willing to accept the ‘Made-in-India’ tag. They are also excited with the economy aspect of products because they are getting quality products at lower cost. Thus, we pass on the cost-saving to the customer, as we believe in transparency. This is how we create mutual confidence.
 
Which are the new products you recently launched?
Manduskar: At EXCON 2009 we launched Small Dust Collector to take care of de-dusting of  the weigh hopper at the top of the plant. This is one area which is of environmental concern. Now the government is taking initiative to educate the industry. People are becoming aware of such products because of environmental reasons and their cost-saving aspect. It also helps to reduce wastage of materials like cement which is very expensive. The second product is a re-launch. It’s a vertical conveying system which is a useful product to address the issue of micro silica handling. Micro silica is a totally different material for conveying, and our own experience shows that it is a very good solution for micro silica handling.
Last year, we launched a range of products that include Poker vibrators. Compared to the vibrators in the Indian market, these have high frequency. The market confirms that this is the need of the hour.
 
Can you describe the subsidiary strength of Wam Group?
Torelli: I like to say WAMGROUP has 45 subsidiaries worldwide, and 10 of them are manufacturing subsidiaries spread across Asia, USA and Europe. We are more interested in the construction sector now, since the recession dramatically affected us. Our products are also installed in sectors like chemicals, plastic, food, detergents, etc. Now we wish to expand our commercial network to such sectors.
We dramatically achieved successful results, as there is construction and infrastructure boom in India and China. World economy is still weak, but we can say that more than 50 per cent of our turnover comes from the construction sector. We believe this is going to be the future for us. We have also expanded to Africa with this objective.
 
What is the scene in India for concrete?
Manduskar: In India, till 2008 from our total turnover, we were having more than 70 per cent in concrete or infrastructure industry. But we addressed this issue in 2009. Now, its 50% only because we have started penetrating into other sectors with customers like Procter & Gamble, Unilever, Cadbury etc. and in cement sector companies like Ambuja, Lafarge to name a few. When we started expanding, we started getting the real appreciation for our products.
 
What is the size of your India operations?
Manduskar: The size in the number of employees is about 85 people. Right now the production ratio of whatever we manufacture in India is 60 per cent local and 40 per cent imported. Next year we intend to change the ratio to 70 and 30 per cent respectively. Also, we are increasing the range of Dust Collectors which are locally manufactured, and next year we will start assembling vibrators in India.
A new plant is in the making on 12 acres of land we have on Mumbai-Nashik road. The construction has already started, and by next year we will shift all our operations to the new factory which has a covered area of about 15,000 sq. mtr. with well equipped training centre & test laboratory .
 
How do you look at the India market as a manufacturing hub?
Torelli: Today we look at the world in three main parts — America, Europe and the Far East. We also see middle Asia, what you call as Eurasia. But for us, India is still the largest country with a very high potential. The production here is required to serve more than one billion people, with a strong expansion mode. And like Mr. Anil said earlier, we can use India to export the products to Gulf countries, Uzbekistan, Kazakhstan and so on. We strongly believe in India because we started our operations here in 1998. Now, more than 10 years later we see absolutely unbelievable results, and the Indian entity is one of the strong manufacturing subsidiaries in our group, and we still see a lot of potential.
Manduskar: I wish to add to this that as an Indian I am proud to say that here it is not just technology transfer. When our chairman was in India last year, he expressed his satisfaction about the quality and reliability of our country. As part of our quality ethics, he has given me a mission to create India as a hub, particularly for the casting, foundry industry and forged machine parts. I am happy to report that we have already started in a small scale in 2006, and in 2009 we have already crossed about Rs 10 crore turnover for the export of components.
We are exporting machined castings, forgings, and now we are concentrating on projects in the rubber industry. We have already identified products for development such as gears, electrical motors, etc. to be exported to Italy. This is one area where we will expand our activity like vendor development, which will be entirely a different project altogether. I reckon that India will be a great hub for exports in near future.
Torelli: We find a lot of synergies and similarities between Italy and India in terms of culture and ethics.
 
How do you look at the labor unrest in India?
Manduskar: One answer to the problem is to get people involved in building up the company. It is my team which builds up the company and not the other way around. But of course you need two hands to clap. How can you decide which one is more important? It is basically the attitude of management and workers. Appreciation, showing concern and maintaining good environment is another way to tackle the situation. I am proud to say in spite of the recession we have not reduced even a single employee.  
 
How favorable is political climate for industries?
Manduskar: In general, the attitude of the government is also changing as the economy is getting opened up. For outside world, India is a dependable country. Now we are looking forward to the introduction of GST as replacement for various taxes.  When we talk as an association on such important issues, it will have an impact. We need to perform as a global player to bring about the change we need. However, there are certain issues which are political in nature. So let’s address them together, there is no quick solution.
 
How far did the downturn affect you as a global player?
Torelli: We are very badly affected, indeed. It began with USA, and then came to Europe. Nevertheless, this year would be the best one for China with 10 per cent growth in its economy. India also is performing very well and we can expect good results from India as well.
Manduskar:  Our business is down by about 10 to 12 per cent. As I said we took a big beating in the concrete industry, but we recovered in other industries. However, our expected growth in 2010 will be around 25 per cent.
 
How has been the performance of WAMGROUP this year?
Torelli: This year WAMGROUP’s turn over would be around minus 25-30 per cent due to the economic crisis, and next year we expect to grow around 10-15 per cent. We are not so positive about the European market, since the beginning of 2009 showed slow growth in old economies like Germany and Italy. We have undertaken new projects to reach our goals, and we are gearing up to cater to the new markets & sectors.
Our company turnover is worth more than Euros 300 million, with strength of 2,000 people as employees, so we cannot wait for the economy to revive. It is very important also to be more aggressive and efficient. As in China, we are also making production investment in India. Turkey, and Africa would be a new frontier for our investment
Manduskar: Our theme for the next three years is to be a GLOBAL COST LEADER. That is why we at WAMGROUP have started de-centralising production activity to reduce cost, but not at the cost on quality.
We are looking out for additional products catering to new markets. We are expanding our branch network and also the sales force, adopting the strategy of appointing sector managers. So products will be marketed & serviced effectively in each sector.
 
Do you offer customized products?
Manduskar: No. We strictly adhere to our standards customized for each sector. This is primarily with a view to offer GLOBAL solutions at a local level. The acceptable standards help us becoming cost leader and at the same time satisfy our valued customers. This is the advantage of technology transfer.  
 
How about your customer care set-up and after-sales services?
Manduskar: We supply 80 per cent of our products to OEMs. Our service support team spread over five destinations all over the country, interact with OEMs to help them sort out problems on time when erecting or commissioning, etc. The other method is effective & interactive customer education program. We have conducted 26 seminars last year for end-users along with OEMs. 
 
How promising is our economic condition?
Manduskar: According to my viewpoint, our economic conditions are not that bad compared to the rest of the world as our economy is still growing in several segments, particularly the infrastructure industry. I expect about 10 to 12 per cent growth to continue. We should catch up by 2013.
 
What makes India the most favorite business destination?
Torelli: India has a unique advantage as the business language is English. I find India one step ahead of all other countries in terms of skilled manpower. India is growing as the most competitive market worldwide due to the right mixture of quality and skilled people. You don’t find this in other growing economies.