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Gears News

Interview of CEO Mr. Kuldeep Aggarwal
in SEARCH magazine, January 2007 Annual Issue

Interview of CEO Mr. Kuldeep Aggarwal in SEARCH magazine, January 2007 issueInterview of CEO Mr. Kuldeep Aggarwal in SEARCH magazine, January 2007 issue

Interview of CEO Mr. Kuldeep Aggarwal in SEARCH magazine, January 2007 issue

Q) Your vision for the manufacturing sector in India. What are the opportunities and challenges ahead?
A) The Manufacturing sector in India is currently experiencing an explosive growth. Some sectors are witnessing double digit growth per annum. It will continue to grow at this pace for at least next five to seven years if the government continues with its policy of liberisation. The growth mainly is exports driven which has brought much needed volumes for the industries. Manufacturers also have been consistent in improving quality, while decreasing or maintaining the sales prices and coping with issues such as labour, electricity and taxes.
Corruption is the biggest challenge to the Indian Industry. Excise laws that govern the manufacturing sector are still highly exploitative and promote corruption. liberisation after the last general elections has virtually stopped. While India boasts of the largest collection of  laws in the world, the implementation is virtually nil.
The most interesting challenge, which the manufacture faced is to live up to the expectation of the world. Quality level of Indian products vastly improved. However, the clients are expecting even better quality at the existing or lower prices. Indian manufacturers have taken this in positive spirit and have till now met or surpassed such expectations.

Q) How according to you, is India placed in manufacturing arena? What are the strong points and weaknesses?
A) India and Indians command a level of respect worldwide which has been unprecedeted in the history of the independent India. The education system in India is among the best in the world. Critical infrastructure like telecommunication, IT and transport are improving at a good rate. The government has been trying to further liberalise the economy. Therefore, the Indian industry today is breaking new grounds and going places. Negligence towards quality is the area that needs to be worked upon. With growth, scarcity of resources arises which increases the input cost. The immense cost advantage that the country currently enjoys will gradually start to diminish. Manufacturers need to work on ways to gradually modernise their working and management to take care of such a scenario and try to capture the heart and mind of customers with better quality and service to overcome the high cost.
Marketing and branding is another weakness. The Indian manufacturers are generally averse to spending on branding and promotion. With the cluttering of manufacturers needs to find a USP for himself and then establish his image to differentiate himself from his competitors.

Q) Do you think that newly enacted MSMED [Micro, Small and Medium Enterprises Development] Act is set to exhilarate the
Indian SMEs and how?
A) The MSMED Act addresses the payment security need of the small-scale industries. However, provisions for this already exist under the current laws. The root problem remains the poor implementations of laws. Sadly, despite a lot of talk on overhauling of judiciary, very little is actually happening on the ground level.

Q) What are the trends in your sector?
A) We belong to heavy engineering, mechanical engineering and automobile sector. Engineering being a low profile, low turnover sector receives scant media attention. This sector is currently experiencing a double digit growth for the last two years. The demand is strong in national as well as international markets. Exports have brought the much needed volumes to this sector. Manufacturers today are able to give better quality lower margins. Prices have risen by 10-20 per cent in the last one year, inspite of two to four times increase in the cost of raw materials, labour, electricity and taxes.
The capacity of utilisation has increased, but the margins are under severe pressure. This will continue to happen. Only those who are able to produce better quality and establish brands, will be able to grow.

Q) What is your company's strategy to sustain the growth?
A) Our strategy is simple. We are concentrating on modernisation and adoption of newer technologies to decrease costs and  improve quality. If we keep our promises with our customers, they will patronise us to give us sustained business. We are also making efforts in the international market. Already a sizeable proportion of our business is generated by exports. Such coordinated efforts have been giving us more than 200 per cent growth each year for the last five years. We hope to continue in the same way.

Q) What is USP of your products?
A) Good quality at reasonable prices remains the USP of our products.

Q) Tell us about your R&D initiatives...
A) We devote a sizeable workforce, material and money on researching the newer and emerging technologies and adopting in their environment. This has improved quality, while the costs have more or less remained same or sometimes increased marginally.

Q) Do you think insufficient infrastructure is the major stumbling block in India's progress as a manufacturing hub?
A) Due to tremendous investment and growth, the Indian infrastructure has definitely become better with time. Nevertheless, a lot of improvement is still needed. Then again, the current infrastructure does not pose any serious impediment in creating a global manufacturing hub. Indian entrepreneurs are already taking advantage of the improved infrastructure, and the growth of 100 per cent EOUs [export oriented units] prove that. Hopefully India will have excellent infrastructure in the next few years.

Q) Speaking of volume in each segment, where does your company does stand when compared to other players in the segment?
A) Ours is a small-scale company and we command a negligible market share. What makes us proud is more than 200 per cent compounding increase in the turnover year.

Q) What are your company's future plans? Any new products in the pipeline...
A) The company is concentrating on industrial and automobile spur, helical worm and bevel gears, gear boxes, racks and pinion. Our future plans include expansion and modernisation in the same field. We are in the process of acquiring and building new machines for this purpose. In marketing, we wish to move more aggressively in the International markets.


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