22 October 2019

Interview- P L Muthusekkar (Nord Drivesystems)

Nord has plans to expand. We intend to make India a service hub for Asia

April 1 may be All Fools Day worldwide, but at Bargteheide in Germany, headquarters of the Getriebebau Nord, the global leader in drive systems, there has been a mood of bonhomie and celebration that can come not only from an excellent product line but also half a century of an aggressively successful market thrust. And India has been a major contributor to the company’s business fortunes.P L MUTHUSEKKAR, MANAGING DIRECTOR, NORD DRIVESYSTEMS – the 100 per cent subsidiary of the German firm – spoke to SHRIKANT RAO of the road and the drive ahead.

 

Your parent company Getriebebau Nord recently celebrated 50 years of its existence while Nord Drive Systems Pvt Ltd, the India subsidiary which you head, celebrated its tenth anniversary. Could you talk about developments in the company in the wake?

As part of the celebrations of 50 years of our global existence we had a very big party in Germany just a few days ago with the Economy Minister, the local mayor, 270 guests worldwide, including 6 customers from India, attending. Nord India has crossed Rs.100 crore in 2014 – making it the fastest growing company in the gear box and geared motor industry – while the parent company has touched €500 million despite the overall weak market situation. With an Global growth of 8.5 per cent last year; It was a memorable recap for all those who were there – even for people like me who joined very late inside the group. We had a good insight as to how the organisation evolved. There were photographs of all the places where Nord has made an impact and specific mention was made of India, China and the US which are the more active subsidiaries in terms of marketing, brand image promotion, market capitalisation, growth points and team efforts. It was truly a great moment.

 

What can we see next in terms of development at Nord’s India operations?

India is a strategic and growing market with a market share of over 13 per cent. We are also among the top preferred brands in India and will be looking at an expansion which will happen in November this year.

 

What are the new additions you will introduce to the Pune unit?

We already have a full fledged assembly unit at Hinjewadi with a production capacity of 24,000 units per year. The focus now will basically be on improvement of service activities. We intend to make India a service hub for Asia. So in the 500 sq mt addition being planned we will have facilities for washing products automatically. There will be a separate press, an assembling bench, a small paint booth. Today if I have to do any repair or service, I have to disturb the existing production line and system. This will be a dedicated setup, almost like a small factory to produce a new product. Any warranty, non-warranty job will be taken care of including painting. Of course we plan to add stock because our business model is about stocking; we are far away from our parent company. It takes about 8 weeks by sea freight, and our customers cannot wait for our products. The investment for all this – the machines and the space – will work out to Rs. 3.5 to 4 crore. Besides that in 2016 we are planning for 2 cardex-automated storage systems to improve space management and fast retrieval of parts.

 

How close is your Hinjewadi unit to the parent plant in Germany in terms of facilities?

In terms of assembly and in terms of procedure we are 100 per cent in line with requirements but capacity wise we can produce only 85 per cent of the size because of the handling capacities. So 85 percent of the products can be arranged, produced and serviced here. Otherwise we follow the same procedures and systems.

 

What is the current view obtaining from your headquarters in Germany of India as a market for Nord products?

They view India as a serious area of business focus, and that is not just because of the market or the customers. It is the acceptability of German products irrespective of the 14-15 players in the market, the acceptability of energy efficient products, though we still do not have the IE3 or the efficient norms approved by the government. It is also because of the awareness of the people, and the awareness of the market. People want products for their projects which are trouble-free. There are many cases where people build on their own and operate and then give it out, so 5 years the product has to work. Things are different compared to previous years. Today you need to have a product that is reliable, works the entire phase and can be transferred.

 

Nord also has a great advantage because of products which have ubiquitous usage?

Indeed. The potential of our products (I always claim our Product is my Hero) the more than any other considering their widespread application– they are used in more than 220 sectors/areas of activity. Our clients are spread over almost every industry such as steel and metals, infrastructure, cement, packaging, airports, pharma, chemicals, pumps, effluent treatment, material handling, robotics, cranes, automobiles, dairy, beverages, packaged food, agriculture, water treatment and many more.

 

As Getriebebau Nord’s India subsidiary how has 2015 -16 been?

Currently we have a growth of 14 per cent compared to the previous year though this is not in line with our budget plan. Our aim has been to go to close to 14-15 per cent because I am told that the gear motors and the gear box industries is itself 1.5 to 2x of the GDP growth. So our assessment is that it will grow definitely more than 15 per cent. Our hopes are still alive.

 

What are the negative points of the market?

It is just the slow pace of project implementation mainly in the steel and metal projects. The simple reason is that though mining policies and other reforms are getting cleared it is now too late for us to get the order, execute it and bill the order because the gearbox comes in the last phase of the project. For example we had orders for a Rs.10000-12000 crore project the year before but the installation has not happened. In 2015, I do not see any big project happening. We have some export orders to Iran and other places but other than that we do not see any large business coming our way immediately. Whatever growth we were aiming for will only be reflected in 2016 and onwards.

 

Tell us about your exports market?

Right now we are exporting only to neighbouring countries, since Nord is operating in Many other countries like Singapore, China, Korea, Australia and various places which have our own subsidiaries. We are looking at the SAARC countries and Myanmar only from India.

 

Tell us of the major orders you have bagged?
We have right now done over 100 airports in the world including Frankfurt, Singapore, China, Korea, and plenty of airports in the US . In India currently we have bagged orders for drives at airports in, Chennai, Mumbai also in Tirupati, Leh and Chandigarh which is going to be commissioned now. We recently closed the Goa Airport project and it is already in operation. Cochin is the most recent project we have bagged which will be with the decentralised drive which is more efficient and intelligent. It operates according to the load and the requirement of the situation. Incidentally in the US many airports have such decentralised, intelligent drives also Australia and New Zealand. The product eliminates the requirement panel and its air-conditioning and can normally be kept in the open. Jeddah Airport , which is among the world’s largest and the airports at Mecca and Madina, are using about more than 4500 units of this decentralised drives.

 

Would you say the product has been under utilised?

I would say to an extent, yes. For example cranes. Cranes employ very big 1 or 2 meter big gear boxes. You certainly don’t require gear boxes of that size. A gear motor, half the size or less than half the size can suffice the purpose. The structural size can come down dramatically and with that the crane can not only become efficient, more span operation and it can also become cost effective. When you are removing some parts from the system, your problems also come down like no coupling direct motor mounted, your price comes down the redundancy too comes down.

 

Apart from airports zone what are the other areas where Nord products have been used?

On the sea ports side it is basically used for material handling, in cranes, stacker reclaimers. It is used in steel projects. It has been used for example in the Bhilai long rail plant where the longest rail in the world can be produced. The plant with about 2800 gear motors about to be commissioned also Rourkela steel plant expansion was recently inaugurated by the prime minister. The Rourkela steel plant which has 500 odd drives was also inaugurated by him on April 1 which was also our 50th anniversary. The products are used in the steel industry, in conveyors, in packaging and many other areas.

 

What is the demand you foresee for the decentralised drive in India which is now getting technologically advanced?

I foresee the demand growing depending on the strict measures taken by the government for energy efficiency. Today we do not talk concretely about the mandated energy efficiency policies. There is no criteria fixed even for small range – IE3 is not fixed. I am talking of the motor which is the power hub conceiving the power. If you bring a helmet rule, automatically the accidents and its consequences like life loss will come down. More than being forced upon the government should at least launch an initiative to create an awareness to make it energy efficient because more than producing energy, saving it is important.

 

Tell us about Nord’s green initiatives?

We are a go green company. Basically we work on energy efficiency. Every product we use here is energy efficient. We are into sewage treatment and waste water management; in the paint shop too we do not expose much harm to the environment with our recirculation system. Even our air handling equipment’s for our plants are controlled by frequency drives thus saves energy.

We also encourage tree plantation. Whenever a visitor comes we ensure that a tree is planted and also gifted with an sapling it is our Go Green Mission.

 

As a company based out of Pune what are the problem areas which you like to see addressed by the government?

What we need is infrastructure support like good approach roads. In the current state they are there is difficulty in handling traffic. We revised twice our office and factory time to cope up the traffic but no change. The other is land cost here – it is one of the most expensive in the world. If we want to expand in Poland, or Central Europe or East Germany we don’t find it so difficult. We are able to get the land or at the price we want.




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