The new government of Narendra Modi has enhanced India’s image in the world economy. And a new thrust is being built-up in our manufacturing arena. The flavor of the season has been the rising roar of lion (read “Make in India” logo). Their Facebook page has garnered 2.1 million ‘Likes’ while “#EASEOFDOINGBUSINESS” is popular hash tag on Twitter, reflecting the aspirations of a billion dreams.
And why not?
We have a stable and strong pro-industry government. Global economy is picking up, and India’s core advantages continue to be strong. The government has started well, and already made few minor yet important changes to improve manufacturing sector. Their intent to address obstacles across infrastructure, labour reforms and ease of doing business along with marketing of Brand India are much awaited heartening measures.
Rubber machinery comprises of equipment used for Compounding, Mixing, Shaping, and Vulcanizing.
This industry in India manufactures mixers, mixing mills, calenders, extruders, tyre curing presses, tyre moulds, tyre building machines, bias cutters, injection moulding machine, etc.
Estimated at USD 405 million (in 2014), the total market in India is expected to grow at 20% CAGR to USD 580 million by 2016.
According to the Ministry of Heavy Industries (MHI), currently there are 19 units in the organized sector for the manufacture of rubber machinery required for tyre/tube industry. The Indian rubber machinery manufacturing industry is a net exporter. Up to 100% FDI is allowed under the automatic route. Technology collaboration is also freely allowed.
The Indian Rubber Machinery industry is mostly a cluster of SME’s that epitomises the famous “jugaad” entrepreneurial spirit. Over the years, some have grown and compete globally. I wear the name of one such home-grown brand on my chest – Bainite Machines.
Today, some leading global brands in rubber machinery have manufacturing presence in the country through JV’s, wholly owned subsidiaries or technology license arrangements.
Industry has witnessed growth in tandem with our growing economy in the past. Domestic manufacturers have 60% share in the machinery market. Share of imports is 40%, mainly from Far East on account of low price and shorter delivery.
An accepted approach to purchase equipment today follows this thought process – customers need to look West (Europe) for advanced technological machinery if the price tag is affordable or look to China for a low-cost replica. Another option is to import used-machinery, which is being discarded by the developed world, at an attractive price tag.
Should this approach be refined? Yes, let me explain.
Increased deployment of used-machinery will render our domestic rubber processing industry inefficient in the long run. Because, rubber processors in the developed world are replacing the older machines with new technology machines under the compulsions to reduce the carbon footprint. Old/Used machinery has high operating cost, higher energy consumption as well as loss of productivity from higher maintenance. One industry friend said this aptly “its wishful thinking to assume another enterprises’ liability (used-machinery) can be your long-term asset (productive machinery)”.
Is it then China? Wait!
Recent statistics are interesting. They reveal China is slowly loses its manufacturing edge. And the reasons are multiple. The labour there aspires to work in hi-tech factories creating workforce shortage for labour intensive machine shops. Wages are rising over 10% per year higher than Indian labour cost increase. The rising Yuan (over 7% against dollar in last three years) makes China’s exports costlier while dropping Rupee (over 26% against dollar in last three years) makes India’s imports costlier. Reports of various forex experts suggest China can afford to let the Yuan strengthen a little bit more while Rupee will remain currency competitive as along as India’s trade-deficit is under control. Also for world-wide importers, shipping costs out of Chennai or Mumbai to most ports of the world are competitive (sometimes even lower) to that from Chinese peers.
Most tire producers around the world and few rubber product manufacturers standardize their production processes across their multiple plants. They adopt one machinery manufacturer for one particular production step and develop them to their customization requirements. This is a win-win situation for both the machinery manufacturer and end user.
It’s an acknowledged fact that Indian machinery manufacturers meet 95% of domestic rubber processing industry needs on technology and product range. Our product technologies are at par with leading brands of developed world albeit offered at great cost advantage.
This is also because leading manufacturers know their fundamentals well. We understand machinery and also rubber processing.
The importance of metallurgy, selection of the right material technology, process technology and appropriate designs that bring out machine systems which are long lasting is paramount to us. And hence, we can design and manufacture customized equipment for our customers. This is definitely our niche as compared to competitors of Far-East.
So, I feel, Indian rubber machinery industry is well positioned on the technological and logistical fronts to offer customized USPs in both domestic and export markets.
Indian machinery manufacturers have undertaken capacity expansion, upgradation in technology and adoption of best manufacturing practices to compete effectively – both in the domestic and export markets. At Bainite Machines, we had started a phase-wise replacement of conventional machines with CNC’s since 2011. We invested in latest design and simulation software to build newer machineries like TSS from scratch, introduce latest B-Turbo tangential rotors, and offer value added sophistication to our regular machineries.
The focus is shifting to automation to create customer value. Smart automation on rubber machineries improves productivity of our customers and enhances operator safety. For example, we developed fully automatic Mixing Room technology requiring only one operator and have highest levels of safety interlocks in the complete processing line. For a large rubber processor, adopting technology and automation is sustainable because the benefits include lower cost of production (cost/kg), consistence in quality, superior aesthetics and reduce defects in throughput production.
Operator-friendly, energy-efficient, machinery that are safe, meets global compliance standards and satisfies the technology appetite is the need of the hour. Bainite Machines recognizes this and design customized machinery. Our recently built Hydraulic Ram in Mixers has a Ram up and down time of less than 3 seconds which in conventional mixers used to be 7 – 8 seconds. In a mixing cycle, there are 2–3 Ram Up and Down operations and hence this 4 seconds saving in each stroke is a tremendous boost to productivity.
Our tagline “Technology That Drives Industry” encapsulates Bainite’s dreams to be a technology driver and is equally fuelled by a passion to position an Indian Machinery manufacturer as a significant force to reckon within the global rubber/tire machinery market. Similar aspirations prevail among my industry friends.
What Next – Two Way Bridge?
Indian Rubber Machinery Industry requires further investments to raise the production volumes and technology to global scale. Volumes will give price competitiveness that our customers expect from us. Government has taken few initiatives to fuel growth and support manufacturing industry.
Equally important is the Indian customers’ recognition of the fact that machinery manufacturers must invest a part of the revenue to R&D efforts. This helps them to improve consistency, improvise continuously on quality, innovation and development of new machines. More importantly, customers can expect prompt after-market (spares and service) support when the machinery manufacturing is local.
So, squeezing the domestic machinery manufacturer to unviable price levels during commercial negotiations citing Far-East competition kills all future advancement efforts. This could then become an impediment to your progress as well tomorrow. Indian Rubber Machinery Industry needs your patronage today more than ever.
We have already demonstrated our competence and quality to the world. Rubber processors across the world are regularly reposing their faith on the Indian Rubber Machinery Industry, eventually making us a net exporter. So, there is no restraint that you could think of to establish this two-way bridge for mutual benefit.
A tinge of extra patriotism to “Make in India” can lead to a sustainable partnership between domestic Rubber Processors and Indian Rubber Machinery Manufacturers for the future and boost the domestic economy further.
(This article by Prasanth Warrier first appeared in the Rubber Asia, IRE 2015 Special Edition)
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