Text: J Srikant
The year gone by was a year of ups and downs for the Indian auto industry. While some months promised revival of the sector, the succeeding months showed that we are not yet out of the clutches of the longest downturn since the economic reforms of the early 90s. For the auto component industry, it also proved to be a year of self-evaluation and focus on areas which have held the industry in good stead. Exports was one such area which did well and showed the opportunity waiting to be tapped. While most companies jumped on to the export bandwagon with hopes to increase the share of export revenues, Sandhar Technologies began targeting the overseas market in a completely different way – by localising globally.
Sandhar is one of the very few Indian component companies which has manufacturing facilities outside India and is looking to further grow the number of overseas units. “We’ve never been on an export bandwagon. We have not chosen that route because exports require a different focus altogether. If I am going to be an Indian company and export, I’ll not be able to give the level of service where I will have a distinct advantage,” said Jayant Davar, Managing Director and Co-Chairman, Sandhar Technologies. “So our route is to localise in the country we are in. If I have a customer in Germany, I would rather have a unit there than export. We don’t want to be a foreign company there, but a local company.”
Sandhar is probably the one among few Indian component makers which is putting up Greenfield units overseas. The company put up a plant from scratch in Poland last year. It also recently commissioned a Greenfield plant in Mexico which will be inaugurated during this month. The company believes that if it builds ground up, it will help them service that market accordingly and mingle and merge in a much better way. Sandhar also claims to be the only company that does not have any expats either as there are no Indians in overseas locations of Sandhar. The thought behind this is that if Sandhar is going to be a global company, people too have to be global.
Apart from the newly operational plant in Poland, Sandhar Technologies has a finishing centre in Romania, an aluminum die casting unit in Spain, a wheel assembly, handlebar assembly and muffler assembly unit in Indonesia. In all, the Gurgaon-headquartered company is spread across 30 locations with close to 6,000 employees. Another reason that he promptly pointed out was that there is a huge domestic demand and if the company makes its position stronger here, it will be a distinct advantage in the long term. 80% of Sandhar’s Rs 1,500 crore revenues come from India and the rest 20% from overseas. This comes not from exports, but generation of revenue outside, which means it manufactures and sells the products in the respective countries itself.
Sandhar is largely into the business of auto engineering components with one of the widest range of products under one umbrella. The main lines of products are locks or security systems which contribute to nearly 20% of sales followed by sheet metal components, mirrors, castings and plastics. However, going forward, Sandhar is hoping to further diversify and make a move towards other sectors as well. By 2020, the company expects only 50% of its revenue to come from auto components and the rest to come from aerospace, the infrastructure sector and appliances.
Sandhar’s Mexico plant to be inaugrated in February
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