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V-Guard Industries Ltd.: Rapid Extension of Market Frontiers with Significant Capacity Expansion

With an extensive marketing and distribution network, V-Guard of late has seen increasing revenue share from markets other than South India, with revenue contribution from non-South markets going up from 9 to 33 percent during FY09-16.The company is also undergoing significant capacity additions at its wire and cable division.

V-Guard is a major electrical appliances manufacturer across South India and has been swiftly expanding its activities in non-South areas of late. Its wire and cable division constitutes more than 30 percent of its top line and has factories at Kashipur and Coimbatore. The company has been pioneers in many products, processes and applications, also being the first company to introduce triple extrusion for manufacturing triple layer insulated house wiring during the year 2005.

The company also intends to soon foray into light electrical segments by expanding the product ranges and also introducing new products for homes. It has initiated significant capacity expansions at both of its wire and cable facilities, the first phase of which will complete by March 2017.

Recipient of the National Award for Manufacturing Competitiveness instituted by IRIM for the second consecutive year, it is currently working on lean sigma concepts for driving the efficiency improvements. Wire & Cable India recently held a detailed interaction with Mr. A. Sreekumar, Vice President – Wire & Cable Division, V-Guard Industries Ltd. to get information on the recent developments at the company. Excerpts:

Wire & Cable India: Share with us a brief history of V-Guard with major milestones attained in terms of growth, products and processes.

A. Sreekumar: V-Guard Industries Limited, a Kerala based company, started by its Founder and Chairman, Shri Kochouseph Chittilapilly, had its inception in 1977 to manufacture and market voltage stabilizers. The company had since then established a strong brand name and aggressively diversified to become a multi-product company catering to the electrical / electromechanical sector manufacturing voltage stabilizers, invertors and digital UPS systems, pumps, house wiring cables (HWC)/LT cables, electric water heaters, fans, solar water heaters and has also recently forayed into switchgears and kitchen appliances.

V-Guard has manufacturing facilities at Coimbatore, Perundurai (Tamil Nadu), Kashipur (Uttarakhand), KalaAmb (Himachal Pradesh) and Sikkim. V-Guard has been a dominant player in the South market, though the last five years have also seen the company expanding rapidly in the non-South geographies with its contribution increasing from 9 percent of total revenues in FY09 to around 33 percent of total revenues in FY16. Significant investments are being made to expand its distributor base in the non-South geographies and become a dominant pan-India player.

V-Guard has a diversified client base and an extensive marketing and distribution network which differs from product to product and includes direct marketing agents, distributors and retailers. The company today has a strong network of 29 branches, 600 distributors, 5,500 channel partners and more than 25,000 retailers across the country.

WCI: Kindly update us about your existing product portfolio in wire and cable segment along with production capacity, facilities, machineries and technology etc.

AS: V-Guard wire and cable division has factories at Kashipur and Coimbatore. Both the manufacturing plants employ high speed state-of-the-art advanced technology machinery imported from Europe.

The total HWC capacity of both these factories is more than 1 crore coils per annum. Additionally, multicore sheathed cables for appliances and submersible pumps; LT power and control cables; telephone and communication cables; surveillance cables; etc. are also an important part of the product portfolio.

Product manufactured as per IS 694: 2010, IS 7098: 1988 Part 1 and IS 1554:1988 Part 1 are certified by BIS. Both wire and cable facilities are certified for ISO 9001: 2008, ISO 14001:2004 and OHSAS 18001:2007 management certifications.

WCI: V-Guard has a wide product portfolio in the electrical industry. How important is wire and cable segment for you? Also detail us about wire and cable business.

AS: Our wire and cable business presently provides more than 30 percent of the top line to our company and contributes to sustainable profit to the business as a whole. Introduced in the market in 90s, V-Guard HWC has more than 20 years of exposure in the Indian market. The wire business for V-Guard was the harbinger of business momentum and growth for the company.

V-Guard was the pioneer and had been highly successful in the area of differentiation in the Indian market by introducing the first triple extrusion for manufacturing triple layer insulated house wiring during the year 2005.

WCI: What according to you are the latest developments happening on the technological side of wire and cable industry and which as a company you are also a part of?

AS: Solar cables and halogen-free cables are the recent developments and major cable manufacturers are scaling up their infrastructure for these cables. In Europe and many other parts of the world, halogen-free cables are already the standard based on environment and safety regulations.

WCI: Tell us about new developments and future plans at V-Guard.

AS: V-Guard shall foray deeper into light electrical segments by expanding the product ranges and also introducing new products for homes.

At a divisional level, significant capacity additions are happening at both the facilities of V-Guard -wire and cable division. The present capacity expansion activities will complete by March 2017. The next phase of expansion shall start by 2018.

WCI: Innovation, product development, quality are key to long-term success for any company. What steps do you make on this front? Also what kind of infrastructure do you have to support R&D and quality initiatives?

AS: Transformation activities of our entire supply chain were successfully implemented with support from world class consultants during the last year. We are currently undergoing similar transformational journey in areas of quality, product development, marketing etc.

Within the division, we foster a culture of empowerment of employees through our in-house developed employee engagement methodology and that has been a huge successin the past. These initiatives have helped us to relook into areas of cost optimization, continuous improvement and innovation. We are currently working on lean sigma concepts for driving the efficiency improvements. We have made significant investments in R&D activities to bring the cost down and sustain the quality.

WCI: Can you elaborate on how you drive efficiency improvement in your manufacturing process and drive competitiveness of your business?

AS: Though they seem to be two different questions, the only answer lies in approach of engaging people. People are the best assets of an organization and we understand that people can help drive both of these objectives. For the last four years we have started a cultural transformation inside our shop floor to develop a Lean system. As a result of this, a culture of Kaizen and 5S is already in place at both of the manufacturing facilities of wires and cables division. The lean methodology coupled with structured productivity improvement and cost control activities is helping our division to deliver products at a better cost.

WCI: It is great to know that new concepts in manufacturing are spearheaded in your business. Do you benchmark these implementations against peer companies? What are the recognitions for taking up such initiatives?

AS: We strive to create differentiation in the way we run a business and that motivates us to attempt new systems and methodologies which are successful in other industry. These innovative practices are deeply rooted in automobile industry and we try to benchmark with such companies to move forward. Additionally we participate in various national and international conferences and competitions for knowledge sharing and people empowerment. We have been privileged to be the recipient of the National Award for Manufacturing Competitiveness instituted by IRIM for the second consecutive year.

WCI: Share your views on the Indian wire and cable industry.

AS: Indian wire and cable industry has come a long way. The quality products have been able to gain ground in an otherwise much commoditized business. The brands promoting innovation and quality have led from the front and the whole industry has consolidated itself to be huge support for the nation building program. New national policies and ‘Make in India’ initiative from the government is expected to provide more impetus to this industry.

 

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