Indian localisation is equal to globalisation

By OEM Update Editorial January 10, 2019 5:33 pm

Currently at the No.3 position in the gear motor business, NORD Drivesystems Pvt. Ltd has marked its presence in the baggage handling equipment industry. P L Muthusekkar, Managing Director, NORD Drivesystems Pvt.ltd. discusses how they consider India as a global platform for their NORD products.

How do view the current Indian manufacturing scenario?
The Indian manufacturing sector has been growing positively in certain markets since the last few years. Our products go into various sectors such as road construction, material handling, steel, cement, food, chemical, pharma, airport etc. Some of these sectors have definitely come up in the last year because of many reasons such as government policies etc. For us, it is a boon from a product point of view and we are looking forward to cater these sectors in the coming years.

What kind of market share do you possess in India?
Currently, we own 15 per cent market share for gear boxes and motors. We have 40-50 kilowatt geared motors which constitutes a major chunk of our business. It’s basically for material handling applications and logistics in food and beverages; so, there is an ample opportunity.

Our products are mainly used in the baggage handling department. Any segment which has a conveyor in place, be it the food or pharma industry or material handling, needs gear boxes for their functionality; that is when we come into picture and provide the best-in-class gear boxes for their smooth functioning.

What is your annual turnover when it comes to Indian market?
Currently, our turnover is at 175 crores this year for the Indian entity. Globally, the turnover, because it is on a larger scale, is € 700 million i.e. close to 5600 crores. If we just consider the market share of NORD in India, we are at No.3 position in the gear motor business. I would say, we are growing at a much faster rate than our competitors. Our growth rate is at 30 per cent.

Does NORD’s international products find their place in Indian market?
Is there any product differentiation as compared with the international markets in terms of material used, quality or pricing?
Yes! We do sell our international products in India. 90 per cent of our products are assembled at our plant in India. All of the NORD’s products are made available for Indian customers.

Pricing is something that is definitely a strategy implemented by every company and the same is with us; different products have different prices, majorly depending on the markets in which they are made available. However, product wise, it is absolutely the same as the products that are sold in India are also made available globally and vice-versa. Every product that is sold in India and worldwide comes with global warranty.

Do you source parts from domestic manufacturers for your assembling process?
We are a global firm and we do global sourcing. As a global company, when we source something from India, it is also termed as global sourcing. For us, localisation is equal to globalisation. So, if you say ‘local sourcing’, then I would say that we do make use of localised parts for our assembly process; it comes up around 14-15 per cent.

What is the criteria before opting for local sourcing?
It all depends on project requirements and availability. Some of the suppliers who source us their products globally have their plants in India. So, we do have local tie-ups with them and those products, having already passed the quality test, will make it bit easy for us to integrate them in our products.

What kind of pricing strategy have you adopted for Indian market?
Indian market is price sensitive but along with that it is a quality driven market. However, the Indian audience is more inclined to buy products at a low price. So, to assist the Indian customers in choosing the right solution and application, we do provide solution engineering for them. We simply do not wish to sell our products only on the basis of prices. We make use of one of the best-in class German technology for solution engineering. We deeply study the application in question and give appropriate solutions to the customers. When such actions are implemented, pricing becomes a secondary for the customers. Product efficiency, lower power consumption, longer oil change intervals, etc., gets prioritised over price.

It is like in olden days, after every 2000 KM, cars had to be taken to service station. But, today, the new generation cars are serviced yearly or after they cross 15000 KM. Same is the case with NORD’s gear boxes, with longer oil change intervals, maintenance periods and the shutdown being very less, it is like ‘fit it and forget it’. This is the reason why people value our products and understand the quality solutions that we provide.

How would you define your differentiating factor among your competitors?
Apart from the products and solutions we offer, we also provide customer support for those products. We also respond to the customer feedbacks, not from the sales point of view but as a company; NORD is available to take care of its customer at each step.
The Indian market is a very flexible market. One moment it goes up and the other it comes crashing down for various reasons, it could be because of government policies, currency rates or market situation. In such situations, there is a ramp up of customers, the large OEMs suddenly demand 200 pieces of a product; and we successfully deliver those 200 pieces in that particular month itself. This is why the OEMs value our relationship with them; that is the kind of support that NORD offers. Other suppliers may not be this flexible. I would say, that makes us a bit different (good different) from the rest of our competitors.

We do not differentiate our products as an Indian product or a global product; every product of ours is termed to be a NORD product and comes with a global warranty.
P L Muthusekkar, Managing Director, NORD Drivesystems Pvt.ltd