Minda group's renewed international aspiration

With 19 manufacturing facilities, the Minda Group has strong technical tie-ups with several international players like Tokai Rika (a Toyota Group company), Fiamm SpA (Italy's leading automotive components company) and Valeo of France. It is the largest manufacturer and original equipment supplier of CNG/LPG kits to various car makers like Maruti Suzuki, Hyundai and Tata Motors.

NK Minda, the managing director of the Group, created a robust international brand of automotive switches, horns, lighting, and automotive batteries. The Group has 70% marketshare in two wheeler switches in India, 35% marketshare in two and four wheeler horns, 15% marketshare in automotive lighting.

Mr Minda talks to Automania on the group's renewed international aspiration which has taken the group to Southeast Asian markets and the focus on Research and Development. This comes after the group's flagship company Minda Industries Ltd has been awarded the National R&D Award 2007, by the Department of Scientific and Industrial Development, ministry of Science and Technology.

With the Indian automobile industry going full steam, what expansion plans are underway in the NK Minda group?

We are setting up a new plant at Bidadi, Bangalore for the manufacture of Blow Molding parts for 4 wheelers. This is a new product category and in keeping with the NK Minda group's philosophy of adding products, which have a higher value addition. We have a technical agreement with Kyoraku Company of Japan for the product.

The plant will have an initial investment outlay of Rs 25 crore and is expected to add Rs 50 crore to the topline of Minda Industries Limited in the next 3-5 years. Besides, we are also doubling our production of the CNG/LPG kits, to 8,000-10,000 units per month from the current 4,000 units in next one year. We recently signed a joint-venture with Valeo Electrical Systems to produce automotive starter motors and alternators for cars.

What other products are being launched by the company?

We are enhancing our portfolio of motorised mirrors. The new generation cars like Maruti Sx4 and Zen Estilo, Hyundai i10 and Verna are coming with these modern mirrors and to meet the demand the production will be doubled to around 10,000 units by FY 2009-10, from the 5,000 units currently produced.

Will the products also require any R&D. Is the company planning any in initiatives on innovation?

We have been instrumental in offering latest technology and engineering products to the two wheeler sector, our core business. Our Automatic Turn Signal switch for two wheelers (where the indicators automatically comes back as in cars), which we developed for Bajaj Auto Limited and is our patented product will be exported to various overseas markets. We have also developed different processes, design and products which have allowed 12 international patents for the company. We are the first auto component group to set up a R&D lab in Japan. It has helped us to develop technology and now we are also supplying automotive Parts to iconic badges like Maybach, Rover, BMW, Audi, Volkswagen, Volvo, Caterpillar, Renault etc.

What happen to your Pant Nagar greenfield facility in automotive batteries?

We are the first to manufacture valve regulated lead acid (VRLA) automotive batteries in India in technical assistance with Fiamm S.p.A. These batteries will first be supplied to the two wheeler segment and later with the expansion in the plant cater to the cars and utility vehicles.

How are the plans for overseas manufacturing progressing. Besides the south east Asia, is the company concentrating on other markets?

The Southeast Asia market is of special interest to us as it has big demand for two wheelers which is continuously growing. We are the first Indian auto component maker to set up a plant in Indonesia. While out R&D lab in Japan is co-ordinating closely with Japanese original equipment manufacturers (OEM) Yamaha, Suzuki and Honda to developed products right from the concept state and take part in the engineering. We have secured orders to develop technologies for some global products of these OEMs, which will eventually help us to consolidate our market in Indian too.

We also have a strategy to cater to Indonesia, Vietnam and the ASEAN region, which are emerging a big two wheeler markets. And the group also plans to establish its base in Uzbekistan to meet the components demand in the Baltic region and feed Poland, Russian and other CIS members countries.

The group is looking for acquisition. Minda had been looking for some sick units in Europe, any progress on those lines?

We have already earmarked Rs 500 crore for expansion and merger and acquisition activity and has already initiated steps in the direction. We are looking for some design development and product manufacturing in Italy and France. Due diligence is on for some European units and we are expecting some success early next year. Our branch office at Turin in Italy has identified these strategic companies.

With the domestic market slowing specially the two wheelers, what is the company strategy to maintain steady growth?

We are looking at exports in a big way. The company would start operating its marketing office in Uzbekistan, in next few months, which would source components from its Indian operations. The slowing domestic market is impacting our margins.

Being a mass volume producer we have identified exports as the key potential growth area and plan to hit an overseas turnover of Rs 170 crore during this fiscal. The initial exports from India would enable us to utilise our local capacities, while consistent volumes in overseas markets would help us establish regional manufacturing bases in several countries.

Any new association with the Tata Nano project.

We are the sole supplier of auto electrical switches and parts to Tata Nano. For the time being our association are restricted to this only, but are looking at strategic alliance once the car is exported to various markets.