Niehoff of India with a built up area of about 5000 sqm and employing close to 100 people including 25 qualified engineers, undertakes assembling, testing, servicing, installations and commissioning of machines for the wire & cable industry here in India. They entered India first as a licensed company of ASACO, then a joint venture was created and when they saw that the market was slowly developing at one point of time, they became a 100% owned company. With its vast experience and the local presence Niehoff of India is eyeing on the future growth of the Indian wire & cable industry. For which they are preparing themselves day by day to serve their customers with efficient and cost effective solutions. Team Wire & Cable India visited their facility in Medak in Andhra Pradesh and had detailed interaction with Mr. Daniel Thomas, Managing Director, Niehoff of India. Here are the extracts of the discussion
Wire & Cable India: Brief us about the technical & operational capabilities & strengths of Niehoff.
Daniel Thomas: Our main strength is the trained manpower which we possess due to the prolonged stay in the Indian market, which is very crucial for any company to survive in today’s competitive market conditions. So here we are head to head and shoulder to shoulder ahead of the competition because of our very good pool of trained manpower who are with us ever since the inception of the company. Moreover we have synchronized data transfer between our parent company and the daughter company which adds to the strength of the company. We have adapted SAP since 2 years which provides us an absolute possibility to seamlessly transfer the data and technical information between the two companies. Knowledge sharing is one of the most important ingredients of our company.
On the operational side we have 100% control over the components that we use in our machines, every component that goes in our machine is inspected for dimensional as well as for all the other engineering qualities. We also have 100% control over the previous batch testing, so every machine that is supplied to the customer is tested within our premises and then only dispatched.
When it comes to the company itself I would say the lean structure that we have within the organization provides tremendous opportunity for our customers to interact with the who’s who of the company. This helps in understanding customers requirement in terms of services, spare parts, technical guidance and process know how etc. We are fully backed by our parent company which is having more than 50 years of experience in this field. Niehoff Germany is numero uno worldwide in what they do & the same we bring to the table for our customers in India in terms of process know how & service etc. Given this situation our customers in India can fall upon us for any kind of problems they face.
WCI: Modernization is the key to business. What kind of new products/ solutions has been developed by Niehoff besides this, throw some light on R&D activities at Niehoff India & Niehoff Germany?
DT: Niehoff has always been at the forefront of the development. Several new concepts, new ideas, new machines have been brought into the market by Niehoff. In India we don’t undertake any major R&D activities rather we bring the technologies which are tried, proven and tested in the rest of the markets by Niehoff Germany.
Over the last few years we have sensed that we need to develop certain unique machines for the Indian market. Thus we entered into collaboration with our parent company for R&D activities as a result of which in 2008, November we launched a machine which was specifically designed for the Indian market. The machine was slightly different from the one made by our parent company in Germany as we do not want to supply a machine which is too complicated for the Indian market and, at the same time possessing the same technical advantages like less energy consumption. This kind of customization we do for Indian customers and at Niehoff Germany we are always engaged in developing certain new products and technologies.
WCI: Better efficiency and good ROI is the idea behind any investment, so how do you ensure better efficiencies for the Indian wire & cable industry?
DT: In Indian wire and cable industry majority has been of small capacities. So we cannot talk about the efficiencies or ROI’s. We are talking about efficiencies and ROI’s for the medium and large scale players where we have fantastic technologies to reach such an effort that can attain high economies of scale. Typically a machine that we make can replace 3, 4 or sometimes even 5 machines of the local competition. When you bring such economies of scale naturally better efficiencies takes place by reducing cost on manpower, energy, land etc. Besides that we are also conscious that India being energy starved country we are definitely moving to the ac technologies, bringing in more energy efficiency to already more efficient machines as what we sell in the Indian market.
WCI: How do you see the fundamentals of the Indian wire and the cable industry especially for the power sector which is the key focus for Niehoff and other sectors too?
DT: I have been associated with this industry from last 17 years, we have seen some ups and downs but overall we have seen fantastic growth in this segment. Since 2002 we at Niehoff of India have been clocking a very healthy double digit growth year on year basis and this is a result of healthy growth that we are having in wire & cable industry. By going forward I would say that we have been interacting with our principle customers, who are industry leaders and all of them are invariably going forward in this field expecting robust growth. The automotive sector is also growing well which has given us healthy revenues since last 4-5 years which is in excess of 25%. Besides this the housing segment is also acting as a good growth diver for us along with the magnet wire industry. Seeing this growth we are witnessing a clutch of companies from Europe & China trying to come and take advantage of the situation. In spite of this we do believe that we would be able to maintain the same market share.
WCI: Trends you foresee in the wire & cable industry in India. Do you anticipate any major changes coming into the industry?
DT: In my opinion whatever is driving the international wire and cable market will soon start to drive the Indian wire and cable market. Nowadays, we have the luxury of the low cost labor, land, energy etc. but it is no more going to be the same in future. You are going to stand among your fellow companies only when you are efficient, have volumes and economies of scale.
The international players are eyeing into India because the market is mature. The companies in India will survive only when they have efficient operations across all functions of the company. If we analyze the profile of our customers then not only the bigger ones are investing but the smaller companies are climbing up the technological ladder. There would be also some companies disappearing from the game and these are the companies who do not want to take the risk for the longer term. At last everyone will have their piece of cake and the Indian companies will become stronger in the coming years.
WCI: Idea behind putting up a factory out here in India and the value it creates for the wire and cable industry?
DT: The strength of Niehoff is to identify where the markets are and be present locally to take care of the demands of the local markets. The senior management of the company had already foreseen what is going to come in India with their experience from other markets. Coming to what values we bring to the Indian customers, having said that company like Niehoff having behind the vast experience and resources to support the Indian wire and cable industry. The advantage of having local presence is that the engineers are able to serve when the machine is down or process support or spare parts are needed. Today if you are not able to provide a local service at the call of the customer then you are not present in the market, your customer doesn’t need you. And, this is the benefit that we pass on to our customers in terms of resources, technical knowhow, process support etc.
WCI: Niehoff plans for the future.
DT: On an average we are turning around 2-3 big wire production lines every month, which we would increase by 50% for this purpose we are adding 2,500 sqm shed to the existing facility in this financial year. And, in the next financial year we are adding few more facilities primarily for our staff like canteen facilities. Further our focus will be to add skilled manpower by constantly training and upgrading the skills of the people and bring our people one step ahead of what the market needs. We’ll continue to provide the most cost effective services to our customers.