Financial Daily from THE HINDU group of publications
Thursday, Dec 02, 2004
On the right track
BRUSH WITH SUCCESS: Ravi Joshi, a partner in Josh Enterprises, which manufactures and assembles scale models of locomotives, with Peter Grace, his marketing team head.
Pune , Dec. 1
IT began with one man's passion for scale models of locomotives, but now, it's more than that.
Joshi's Museum of Miniature Railways here has just bagged orders from three of the top five Australian players in the train modelling business, to assemble and even manufacture a range of models for them.
And unlike other businesses where India Inc loses out to China, this is one area where the Australian companies are actually shifting business out of dragon country to India, says Ravi Joshi, Partner of Josh Enterprises. The company manufactures models of train engines, wagons and other related accessories.
According to Joshi, who took over the business from his father a couple of years ago, Australia's Eureka, Powerline and Trainworld have already placed their first orders with his small-scale unit, which will now manufacture and assemble freight and passenger wagons and premium brass locomotives.
Joshi and his marketing team leader, Peter Grace, are also simultaneously giving the final touches to the popular miniature model of the Narrow Gauge Engine, the C-16, which they plan to retail in the US and Australia.
Unlike the Indian market, miniature train modelling is a passion across the world, and people are known to spend large amounts on the models of their choice.
The first shipment from Josh Enterprises that will leave next month will consist of 1,000 pieces each of the C-16, Narrow Gauge Engines, Passenger Wagons and Freight Wagons, which command a price of $200 (Rs 8,900), $40 (Rs 1,790) and $30 (Rs 1,340), respectively, in the international market. The first batch will also consist of 20 pieces of Premium Brass Locomotives that cost upwards of $3,000 (Rs 1.34 lakh).
According to Joshi, the Australian companies are shifting base to India due to the long waiting period of some 18-24 months in China after orders are placed.
Chinese manufacturers also only take large manufacturing orders and charge heavily for the dye casting and engineering work, he adds. Engineering and dye making would be cheaper in India, and at present, for up to 20,000 units, the manufacturing costs in Pune would be cheaper compared to China.
"We plan to match the Chinese assembly price by the end of 2005 for larger volumes as well," Peter says. The company has now set up a manufacturing plant, spread over 2,000 sq. feet, with a eight-member team on the project.
"In addition to contract manufacturing and assembling various products in train modelling, we will also get into manufacturing different structures required in train modelling, such as railway stations, freight depots, shades, factories and warehouses, for which production will go on line in mid-2005, Joshi adds.
In its first year of operations, the duo plans to manufacture 65 different miniature models of 1,000 pieces each, with an expected turnover of $1 million.
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