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