CII South­ern Re­gion to help un­leash po­ten­tial of Tier-II ci­ties for in­vest­ment: R Di­nesh

Auto components India - - COVER STORY - ACI

In­fras­truc­ture devel­op­ment, ease of do­ing busi­ness, pro­mot­ing Tier-II ci­ties, skill devel­op­ment, fo­cus on MSMEs be­sides in­vestor-friendly poli­cies are the key pri­or­i­ties to pro­mote in­vest­ments in the re­gion, R Di­nesh, Chair­man, South­ern Re­gion, Con­fed­er­a­tion of In­dian In­dus­try (CII) and Manag­ing Di­rec­tor, TVS Lo­gis­tics Ser­vices Ltd, told Bhar­gav TS of Auto Com­po­nents In­dia in an ex­clu­sive in­ter­view. Edited ex­cerpts:

Q: What are your pri­or­i­ties to pro­mote fur­ther in­vest­ments in the South­ern re­gion?

Di­nesh: The South­ern states must tap the po­ten­tial of the Tier-II ci­ties, as they are the growth engines of the econ­omy. CII Souther Re­gion (CII-SR) is work­ing with the re­spec­tive State gov­ern­ments on this. How­ever, what makes a re­gion an at­trac­tive in­vest­ment des­ti­na­tion is not just in­fras­truc­ture or its com­pet­i­tive ad­van­tages but also the sta­tus of the so­cial progress. Hence, CII-SR is tak­ing up many ini­tia­tives in skill devel­op­ment, ru­ral job cre­ation, in­creas­ing farm­ers in­come, wa­ter body and lake re­ju­ve­na­tion, univer­sal ed­u­ca­tion and health­care.

Q: What role do you think CII can play in pro­mot­ing South In­dia as an in­vest­ment des­ti­na­tion for the au­to­mo­tive sec­tor?

Di­nesh: We be­lieve that the In­dian au­to­mo­tive in­dus­try has the po­ten­tial to be a US$300 bil­lion in­dus­try by 2026, from about US$ 93 bil­lion to­day. South­ern Re­gion can con­trib­ute at least to one third of this growth. What we need are strong part­ner­ships be­tween the gov­ern­ment and the in­dus­try. CII’s ex­per­tise in cre­at­ing clus­ters and in en­gag­ing the gov­ern­ment and reg­u­la­tors for pol­icy ad­vo­cacy can be ef­fec­tively lever­aged. For the au­to­mo­tive sec­tor, an en­abling pol­icy en­vi­ron­ment is key to at­tract new in­vest­ment. CII is work­ing with the State Gov­ern­ments on sec­toral poli­cies in­clud­ing the au­to­mo­tive sec­tor.

Q: What ac­cord­ing to you are the key ad­van­tages for South In­dia’s au­to­mo­tive sec­tor? And the chal­lenges?

Di­nesh: South In­dia is a force to reckon with for the au­to­mo­tive in­dus­try ow­ing to prox­im­ity to mar­ket, vast sup­plier base, and good in­fras­truc­ture. South In­dia has the big­gest au­to­mo­tive mar­ket. Hav­ing prox­im­ity to mar­ket is very im­por­tant for the in­dus­try, and hence, this re­gion is a good op­tion for new in­vest­ment and ex­pan­sions. From the op­er­a­tions per­spec­tive, South In­dia has a vast MSME and an­cil­lary in­dus­tries base. So, it makes sense to in­vest in this re­gion. We have bet­ter in­fras­truc­ture, ac­cess to ports, in­ter­na­tional link­ages, and power gen­er­a­tion.

South In­dia has also emerged as an IT, knowl­edge and R&D hub. As the au­to­mo­tive in­dus­try gears to move up the value chain - into de­sign, au­to­ma­tion, and AI for smart and au­tonomous driv­ing sys­tems, and so on - they can in­vest in South In­dia to lever­age the IT prod­uct and re­search ecosys­tem that ex­ist in this re­gion. Fur­ther, the State gov­ern­ments by and large are growth hun­gry, and be­com­ing in­creas­ingly busi­ness-friendly.

Q: What is vi­tal for the au­to­mo­tive in­dus­try in the South to be­come even more com­pet­i­tive?

Di­nesh: We have to move up the value chain to gar­ner a niche for our­selves in the global mar­kets. Hence, de­sign and in­no­va­tion are vi­tal for the in­dus­try’s growth. We have to en­hance our de­sign and in­no­va­tion ca­pa­bil­i­ties to con­vert con­cepts into vi­able pro­to­types. CII is work­ing on map­ping in­dus­try readi­ness on IPR. We are also tak­ing up Dig­i­tal Readi­ness Sur­vey of our mem­bers that in­clude the au­to­mo­tive in­dus­try. CII is tak­ing up its Man­u­fac­tur­ing And Dig­i­tal Ex­cel­lence (MADE) ini­tia­tive in a big way. We are also work­ing with MSMEs in help­ing them un­der­stand and de­ploy Ar­ti­fi­cial In­tel­li­gence and In­ter­net of Things in their busi­ness. Th­ese should help them be­come in­no­va­tors.

Q: What are all the new ini­tia­tives that CII will im­ple­ment this year to boost the eco­nomic growth in the re­gion?

Di­nesh: Ed­u­ca­tion and skill devel­op­ment is big on our agenda. It is the sup­ply side as­pects such as avail­abil­ity of skilled and skil­l­able labour that drive in­vest­ment de­ci­sions to a large ex­tent. We are un­der­tak­ing skill gap study in labour-in­ten­sive sec­tors. We are work­ing with the Tamil Nadu gov­ern­ment on skill mis­sions. We fa­cil­i­tate in­dus­try-cen­tric skill pol­icy in the south­ern states. Fa­cil­i­tat­ing the set­ting up of Model Ca­reer Cen­tres, or­gan­is­ing Job Fairs in Tier II ci­ties, Skill Com­pe­ti­tions and cre­at­ing best-in­class ed­u­ca­tion frame­work aligned with in­dus­try needs are some of the other ini­tia­tives we have taken up as part of our skill devel­op­ment ini­tia­tive.

Q: It has been a year after the rolling out of GST. How do you view its im­pact on the au­to­mo­tive in­dus­try?

Di­nesh: One year after the roll-out, things have set­tled down. GST has re­sulted in the for­mal­i­sa­tion of en­ter­prises, wider tax base and higher tax rev­enues. Trans­port and lo­gis­tics have be­come more com­pet­i­tive and less ex­pen­sive, with the elim­i­na­tion of in­ter­state bar­ri­ers and im­ple­men­ta­tion of e-way bill sys­tem. GST has brought in op­por­tu­ni­ties for the in­dus­try to stream­line its sup­ply chains and op­ti­mise on ware­hous­ing and lo­gis­tics costs. This could re­duce op­er­a­tional costs. The time taken to trans­port goods has come down with the re­moval of state bor­der VAT check posts. GST has sim­pli­fied the tax regime by uni­fy­ing over 15 dif­fer­ent cen­tral and state levies into a sin­gle type of tax.

Q: What are the steps needed for In­dia to im­prove its rank­ing in the ease of do­ing busi­ness glob­ally?

Di­nesh: The re­forms mea­sures rolled out by the Union Gov­ern­ment in the last 4 years has im­proved In­dia’s ease of do­ing busi­ness rank­ing glob­ally. CII, as part of its pol­icy en­gage­ment mea­sures, has been fa­cil­i­tat­ing in im­prov­ing the ease of do­ing busi­ness at the state level. We are work­ing with re­spec­tive gov­ern­ments in help­ing them roll out Sin­gle Win­dow sys­tems and sim­pli­fy­ing and com­put­er­is­ing var­i­ous ap­proval pro­cesses. We are also ad­vo­cat­ing ex­clu­sive sin­gle win­dow clear­ances for MSMEs.

In the ease of do­ing busi­ness in­dex for States, Andhra Pradesh and Te­lan­gana are lead­ing. CII is fa­cil­i­tat­ing the learn­ing and shar­ing of best prac­tices among other South­ern Re­gion States in this re­gard so that suc­cess sto­ries are repli­cated across the re­gion.

Brakes In­dia Pvt. Ltd., a part of the TVS Group, is build­ing new ca­pa­bil­i­ties to of­fer the next gen­er­a­tion of brak­ing sys­tems for pas­sen­ger and com­mer­cial ve­hi­cles. The prod­uct port­fo­lio of the Chen­nai-based brake man­u­fac­turer, with the sup­port of its joint ven­ture part­ner ZF Friedrichshafen AG (ZF), in­cludes calipers, ac­tu­a­tion, drum brakes, valves, hose ABS and brake fluid for pas­sen­ger ve­hi­cles, S-cam, hy­draulic drum brakes, disk brakes and elec­tro­mag­netic re­tarders for com­mer­cial ve­hi­cles and dry and wet mul­ti­ple plate disk brakes for agri­cul­tural trac­tors.

The new line-up of the com­pany in­cludes In­te­grated Brake Con­trol (IBC), radar and cam­era prod­ucts for the pas­sen­ger ve­hi­cles. It has de­vel­oped a hy­draulic-as­sisted disc brake sys­tem for light com­mer­cial ve­hi­cles (LCVs) with a gross ve­hi­cle weight (GVW) of over 7-tonne. “Brakes In­dia con­tin­ues to work closely with ZF to en­sure that ap­pro­pri­ate tech­nolo­gies are brought to the In­dian mar­ket at the right time and at the right cost. This was clearly show­cased through our first-ever do­mes­ti­cally man­u­fac­tured elec­tric park brake (EPB) and through our early en­try into anti-lock brak­ing and ad­vanced slip con­trol sys­tems. With our strong con­nec­tion with the OEMs in In­dia and our lo­calised de­sign and devel­op­ment ca­pa­bil­ity, we will sup­port our cus­tomers in launch­ing ve­hi­cles with en­hanced safety and con­ve­nience,” Sri­ram Viji, Deputy Manag­ing Di­rec­tor, Brakes In­dia, said.

Pas­sen­ger ve­hi­cle prod­ucts

Ad­vanced elec­tron­ics, driver as­sist sys­tems and elec­tronic sta­bil­ity con­trol (ESC) are some of the prod­ucts for the fu­ture mo­bil­ity. With in­te­grated brake con­trol (IBC), Brakes In­dia wants to meet the fu­ture re­quire­ments of low vac­uum or vac­uum-less brak­ing sys­tems. With the in­creas­ing quan­tum of elec­tri­fi­ca­tion in pow­er­trains, the com­pany’s elec­tro-hy­draulic IBC unit would re­place ESC, vac­uum booster, vac­uum pump (where needed), as­so­ci­ated ca­bles, sen­sors, switches and con­trollers. It of­fers su­pe­rior per­for­mance through a sin­gle, in­te­grated unit that brings with fuel econ­omy and other emis­sion ben­e­fits cred­ited largely to the re­gen­er­a­tive brak­ing ca­pa­bil­ity. There would be sig­nif­i­cant weight sav­ings with less com­po­nents, com­pact pack­ag­ing and eas­ier ve­hi­cle assem­bly process. IBC en­ables re­duced stop­ping dis­tance, fast brake-pres­sure build rates for sys­tems such as au­to­matic emer­gency brak­ing, de­signed spe­cially to en­hance pedes­trian safety.

IBC, ac­cord­ing to Viji, can be scaled up to suit di­verse re­quire­ments ow­ing to com­pat­i­bil­ity with dif­fer­ent pow­er­trains from hatch­backs to light­truck seg­ments. To­gether with ZF, the com­pany is look­ing at ways to in­stall the EPB mo­tor on the front caliper of the ve­hi­cles in In­dia with calipers on the front and drum on the rear. “It is a very hard thing to fit as the space be­tween the front wheel and steer­ing col­umn is far too lim­ited. We are work­ing on a novel de­sign and a com­pact ac­tu­a­tor to fit it on a 15 to a 16-inch wheel, even 14-inch, if we can work with OEMs up­front,” he said. With SOPs tak­ing 3 to 4 years, the com­pany is also tar­get­ing smaller ve­hi­cles with EPB on the front con­cept.

The elec­tron­ics depart­ment at Brakes In­dia is ex­pand­ing. It is re­vamp­ing its in­fras­truc­ture and the team to de­velop fa­cil­i­ties for test­ing and de­sign­ing of prod­ucts. Hand­held

by ZF to en­sure that the com­pany doesn’t have to start from scratch, it is look­ing to reach a level from where it can serve cus­tomers from the de­sign stage it­self and not just the end-prod­uct level. AC1000, a fourth­gen­er­a­tion radar with an op­er­at­ing fre­quency of 77 GHz is said to en­able ve­hi­cle and pedes­trian de­tec­tion and help ve­hi­cles meet 2016+ Euro NCAP 5-star rat­ings.

With the ca­pa­bil­ity of com­bin­ing cam­era in a sen­sor fu­sion sys­tem to en­hance safety and com­fort func­tions, it is claimed to be an ideal so­lu­tion for ef­fec­tive high­speed adap­tive cruise con­trol and au­to­matic emer­gency brak­ing per­for­mance. S-cam3, a mono cam­era with a sin­gle lens front cam­era is com­pact and high on the per­for­mance front. It in­cludes ad­vanced ob­ject recog­ni­tion tech­nol­ogy aided by the Mo­bile EyeQ3 im­age pro­ces­sor and vi­sion al­go­rithms known to be com­bined with ZF’s lon­gi­tu­di­nal and lat­eral ve­hi­cle con­trol al­go­rithms for func­tions like adap­tive cruise con­trol, au­to­matic emer­gency brak­ing and lane keep­ing as­sis­tance.

Other fea­tures in­clude traf­fic sign recog­ni­tion, large an­i­mal de­tec­tion and pedes­trian au­to­matic emer­gency brak­ing made more at­trac­tive by use of a com­mon hous­ing de­sign that is also said to be com­pat­i­ble with mul­ti­ple OEM con­nec­tor op­tions. Its ther­mal de­sign en­ables re­li­able high-tem­per­a­ture op­er­a­tions. The Tri-cam for­ward cam­era from the com­pany can de­liver long-range and short-range wide ob­ject de­tec­tion for pre­mium and semi-au­to­mated ap­pli­ca­tions. Claimed to of­fer best in­class op­ti­cal per­for­mance, it makes use of a fish-eye lens for op­ti­mum short-range ob­ject de­tec­tion and a tele­photo lens for long-range ob­ject de­tec­tion of up to 300 me­tres. The com­pact me­chan­i­cal de­sign is claimed to be smaller than other stereo cam­eras on of­fer in the mar­ket. The mul­ti­ple op­ti­cal paths ef­fec­tively sup­port au­to­mated driv­ing func­tions.

Com­mer­cial ve­hi­cles

Brakes In­dia is look­ing to cus­tomise brakes based on the dif­fer­ent CV duty cy­cles. Its hy­draulic-as­sisted disc brake sys­tem is claimed to im­prove brak­ing sta­bil­ity in com­mer­cial ve­hi­cles. It can im­prove the over­all life of buses. Help­ing in sig­nif­i­cant weight re­duc­tion for the goods car­ry­ing ve­hi­cles, the hy­drauli­cas­sisted disc brake sys­tem has the po­ten­tial to bet­ter the re­turn on in­vest­ment (RoI) to cus­tomers. There is im­mense scope to of­fer a more cost-ef­fec­tive and lighter so­lu­tion, with­out the need to com­pro­mise on per­for­mance, to LCVs in In­dia with over 7-tonne GVW that adopt pneu­matic brake sys­tems, Viji said.

“Brakes In­dia with its ad­vanced engi­neer­ing ca­pa­bil­ity has de­vel­oped an ac­tu­a­tion sys­tem called Uni­booster to ex­tend hy­draulic brakes up to GVW of 10-tonne. Cou­pled with hy­draulic disc brakes and hy­draulic ABS, it pro­vides the end-user with a very op­ti­mised so­lu­tion on safety, sta­bil­ity and per­for­mance,” he said. Many OEMs have signed up for the first SOP of the Uni­booster to be re­leased shortly. The com­pany has been work­ing to re­duce brake noise in the in­ter­city bus seg­ment, Viji said.

Ex­pands foundries

Brakes In­dia’s Foundry divi­sion op­er­ates iron foundries in 4 lo­ca­tions, each in Tamil Nadu, Oman, Gu­jarat and Andhra Pradesh with a com­bined ca­pac­ity of over 160,000 tonne of cast­ings. Ca­pac­ity has been com­ing on-stream at a reg­u­lar pace in the last 7-10 years and this trend is ex­pected to con­tinue. The com­pany has in­vested about Rs 300 crore on ca­pac­ity ex­pan­sion in the past 5 years. It has also im­proved qual­ity and pro­duc­tiv­ity of its ex­ist­ing lines. “We have added 2 new lines at the Jha­ga­dia foundry in Gu­jarat, one line at Naidupeta in Andhra Pradesh and we have re­placed one of our older lines in Sholin­gur to aug­ment out­put,”

V Narasimhan, Ex­ec­u­tive Di­rec­tor - Foundry, Brakes In­dia, said.

The Naidupeta project, set up at a cost of Rs 120 crore, will in­crease the prod­uct range of Brakes In­dia. “Its line con­cept is a lit­tle dif­fer­ent from what we have done in the past and en­ables us to pro­duce slightly larger and more in­tri­cate cast­ings. Start­ing off, this line will pro­duce com­po­nents for brake as­sem­blies, turbo charger as­sem­blies, cer­tain com­mer­cial ve­hi­cle struc­tural and en­gine parts as well as new or­ders that we have on the anvil. Based on the prod­uct-mix, we ex­pect to pro­duce about 12,000 tonne of cast prod­ucts from this new line. We are al­ready eval­u­at­ing fur­ther ex­pan­sion of ca­pac­ity at this site with an ad­di­tional foundry line by in­vest­ing Rs 100 crore. This will be more like our ex­ist­ing mould­ing lines and serve to aug­ment ca­pac­ity by an ad­di­tional 24,000 tonne,” he said. The com­pany is wit­ness­ing a steady and grow­ing de­mand in the au­to­mo­tive seg­ment. In In­dia, growth has been es­pe­cially strong in both four-wheel­ers and com­mer­cial ve­hi­cles. The over­all level of growth in the au­to­mo­tive sec­tor was well be­yond pro­jec­tions and this has led to a dearth of foundry ca­pac­ity, and in some cases lost or­ders for OEMs due to the non-avail­abil­ity of cast­ings. Due to this rea­son, many play­ers have put in place or made an­nounce­ments to in­crease ca­pac­ity.

The Brakes In­dia foundry started by sup­port­ing its cap­tive de­mand for brak­ing prod­ucts. “There­fore, a ma­jor fo­cus still re­mains in brak­ing – both for pas­sen­ger cars and com­mer­cial ve­hi­cles. Safe­ty­crit­i­cal brake parts con­sti­tute about 50% of our out­put. We also ser­vice a large range of turbo charger com­po­nents, com­mer­cial ve­hi­cle en­gine and struc­tural parts, steer­ing knuck­les, pump hous­ings, fuel in­jec­tion parts and some other au­to­mo­tive chas­sis com­po­nents. The fo­cus of the foundry is to pro­duce parts which are crit­i­cal ei­ther from a safety per­spec­tive or from a per­for­mance per­spec­tive. We also spe­cialise in in­no­va­tive met­al­lurgy whether it is for high tem­per­a­ture ap­pli­ca­tions such as tur­bocharger com­po­nents, or for high strength ap­pli­ca­tions such as chas­sis com­po­nents,” Narasimhan said.

Brakes In­dia has been fo­cus­ing on long-term cus­tomer needs and on de­vel­op­ing ex­per­tise in cer­tain prod­uct lines. “Though we al­ways look for new op­por­tu­ni­ties through in­no­va­tive de­sign and new ma­te­rial spec­i­fi­ca­tions, our bread and but­ter are our ex­ist­ing prod­uct lines of brak­ing, turbo charger com­po­nents and crit­i­cal chas­sis and en­gine com­po­nents such as steer­ing knuck­les, en­gine and chas­sis mount­ing brack­ets and bear­ing caps. Also, as prod­uct life cy­cles get longer, we find that many of our prod­ucts have been with us for sev­eral years. Typ­i­cal life cy­cles are chang­ing from 5 years to 8 years and in some cases even over 10 years as cer­tain prod­ucts are car­ried over from one plat­form to the next,” he said.

Ex­port has been a large part of the com­pany’s rev­enues for sev­eral years now and it is one of the largest ex­porters of au­to­mo­tive duc­tile iron cast­ings in the coun­try. “Over 50% of our sales value from the In­dian lo­ca­tions is to­wards ex­port re­quire­ments, and fur­ther over 90% of the pro­duc­tion in Oman is ex­ported to Europe and North Amer­ica. Based on our qual­ity and our abil­ity to adapt to cus­tomer needs, we are able to en­sure a smooth sup­ply chain for our cus­tomers across the globe,” Narasimhan said.

Brakes In­dia man­u­fac­tures wide range of brak­ing prod­ucts

Brakes In­dia Padi plant in Chen­nai

Sri­ram Viji, Deputy Manag­ing Di­rec­tor, Brakes In­dia

Naidupet plant man­u­fac­tures com­po­nents for brake as­sem­blies, turbo charger as­sem­blies, cer­tain com­mer­cial ve­hi­cle struc­tural and en­gine parts

V Narasimhan, Ex­ec­u­tive Di­rec­tor - Foundry, Brakes In­dia

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