Financial Daily from THE HINDU group of publications
Thursday, Jan 26, 2006
Sundram Bleistahl flags off first consignment Targets Rs 135-cr turnover in seven years
(from left) Mr Ekkehard Kohler, Managing Director, Bleistahl Produktions, Germany; Mr Suresh Krishna, Chairman and Managing Director, Sundram Fasteners Ltd; and Mr Johann Heinz Kopp, Consul General of Germany in Chennai, at the inauguration of Sundram Bleistahl Ltd at Hosur on Wednesday. Bijoy Ghosh
Hosur , Jan. 25
WHEN the first line of the Bleistahl plant arrived from Germany, Sundram Fasteners took a seemingly inconsequential decision to paint the plant white.
Sundram Fasteners is the Indian partner of Sundram Bleistahl Ltd the year-old joint venture of the TVS group company and Bleistahl Produktions GmbH of Germany.
The idea was for the joint venture to dismantle about 60 per cent of Bleistahl's production facilities in Germany and put it up in Hosur.
The paint-it-white decision stunned the Germans. After all, the plant would make small-sized auto components with black powdered metal. A white plant would mean enormous work in terms of house keeping.
But the results proved to be so gratifying that the Germans decided to re-colour their home facilities with white paint, much to the chagrin of their worker unions.
The colour of a plant is a minor detail, but minor details add up to reflect a crucial business parameter the culture of the organisation.
"We decided that we would introduce Japanese production techniques here," Mr Suresh Krishna, Chairman and Managing Director, Sundram Fasteners, told presspersons here today.
Accordingly, the plant has been designed to produce on single-piece basis if (hypothetically) a customer wanted only one piece, the plant would make it for him. The company can, therefore, accept orders, no matter how small.
Sundram Fasteners reckons the culture aspect to be of critical importance, as the aim of the joint venture, Sundram Bleistahl Ltd, goes much beyond the Rs 135-crore turnover it is expected to achieve in seven years. (In the first year, the turnover is expected to be around Rs 22 crore, and will grow progressively as other parts of the Bleistahl unit are uprooted from Germany and re-planted here.)
To Sundram Fasteners, the joint venture represents one of its various approaches towards globalisation, needed in its quest to become the world's biggest and best fasteners company.
"China was another form of globalisation," said Mr Suresh Krishna, referring to the greenfield unit Sundram Fasteners set up in the country, mainly to cater to customers who preferred to buy from China.
In 2003, Sundram Fasteners acquired Cramglinton Forge, a UK-based forgings company that makes bevel gears, and that was yet another approach to globalisation.
"That was more like `radiator caps'," Mr Suresh Krishna said, alluding to the radiator cap plant that Sundram Fasteners bought from General Motors in the early 1990s.
Thus, when Mr Johann Heinz Kopp, Consul General of Germany in Chennai, flagged off the first consignment of 50,000 valve guides from Sundram Bleistahl here, the event marked the commencement of an experiment of globalisation, which Sundram Fasteners could replicate in the future.
"There are so many opportunities. Europe and the US are under tremendous cost pressures and this is a great time for India," Mr Suresh Krishna said. He spoke of ramping up production capacity of Sundram Bleistahl, from 25 million pieces now to 160 million in five years, at an investment of around euros 18 million.
No sooner than Sundram Fasteners' executives rubbed their hands upon completion of the Bleistahl deal, the company's management has finalised another takeover Peiner of Germany.
With three "beachheads" in Europe Cramglinton Forge, Bleistahl and Peiner one in China and another in Malaysia (of the former Autolec Industries), Mr Suresh Krishna believes Sundram Fasteners has quite a few launch pads across the globe. But there is more to come.
"We get asked if we would buy a fastener unit somewhere in the world, at least twice a week," he said.
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