Es­corts banks on in-house in­no­va­tion to de­velop crit­i­cal rail com­po­nents

Auto components India - - CONTENTS - Story by: Bhar­gav TS & Sricha­ran R

Es­corts Group’s rail di­vi­sion has come up with an in­no­va­tive brake sys­tem that are ‘Made in In­dia’ for the In­dian Rail­ways. Es­corts man­u­fac­tures and sup­plies crit­i­cal rail­way com­po­nents such as air brake sys­tem, EP brake sys­tem, draft gears and cou­plers, com­po­si­tion brake blocks, dampers and rub­ber com­po­nents to In­dian Rail­ways.

“For any Make in In­dia pro­gramme to be true, you have to build in­house ca­pa­bil­ity. If you see the brake sys­tems here, only multi­na­tion­als have been sup­ply­ing them. We are the first In­dian com­pany that has come with our own brake sys­tems,” Di­pankar Ghosh, CEO of Rail­way Equip­ment Di­vi­sion, Es­corts Group, told Auto Com­po­nentsIn­dia. The Haryana-based com­pany has been op­er­at­ing since in 1944 and is pre­sent in sec­tors of agri­ma­chin­ery, con­struc­tion and ma­te­rial han­dling equip­ment, and rail­way equip­ment. Di­pankar said that Es­corts is the only com­pany to do the bo­gey-mounted brake sys­tems in the coun­try. “Only when you de­velop and build prod­ucts in In­dia, the prices can come down. We have in­vested heav­ily in R&D to de­velop deep do­main knowl­edge. And now we are ca­pa­ble of build­ing prod­ucts in In­dia. It is very easy to buy the tech­nol­ogy, but if you buy, tech­nol­ogy do not come to you,” he said.

Speak­ing about the new brake sys­tems, Di­pankar states,” At pre­sent peo­ple buy axle-mounted brakes from multi­na­tional com­pa­nies. What hap­pens is that they con­tinue to make money by giv­ing you old tech­nol­ogy. We have mod­i­fied the old brake sys­tems through do­main knowl­edge and have a very com­pact brak­ing sys­tem now. These are now be­ing used by MRVS (Mum­bai Rail Vikas Cor­po­ra­tion), and all the coaches have this brak­ing sys­tem. Sim­i­larly, there are many high-end brake elec­tron­ics that are be­ing im­ported by the In­dian Rail­ways, it has 28 mi­cro­con­troller com­po­nents in­side. This helps to in­ter­act with other parts con­tin­u­ously and mon­i­tor the brake sys­tems. We have de­vel­oped it in­de­pen­dently. Multi­na­tion­als charge Rs 40-45 lakh per set and we of­fer it at Rs 20 lakh. This is be­cause we are so con­fi­dent about our tech­nol­ogy.”

He said the cou­plers that were ini­tially used were for­eign brands. The spe­cial cou­pler would help pre­vent ac­ci­dent, as it would not climb and top­ple if a mishap hap­pens. MNCs were sell­ing for Rs 5 lakh each and Es­corts sell it for Rs 2 lakh. The sce­nario is sim­i­lar in shock ab­sorber seg­ment too. “Most of the multi­na­tion­als are out. In an­other 2-3 years, we will give them a run for the money. We are con­fi­dent about it and we are in­vest­ing sig­nif­i­cantly in capex and in R&D tal­ents.”

Rail­way cargo wag­ons re­quire a spe­cial brak­ing sys­tem and the engi­neer­ing firm is into that too. It is a spe­cial type of low-weight brake sys­tem with no me­chan­i­cal lever­age. So, the ad­van­tage is RAMS - Re­li­a­bil­ity, Avail­abil­ity, Main­tain­abil­ity, Ser­vice­abil­ity. The RAMS quo­tient goes up very high and this is what the car man­u­fac­tur­ers ex­pect. It is only a ques­tion of time to see pri­vate wagon builders ac­tu­ally own­ing this. “Across Europe, the track is owned by some­one, the rolling stock by

some other and the user is some­one else. This is be­cause rail­ways will not be able to man­age ev­ery­thing. In­di­ans are also ask­ing for their own wag­ons to be op­er­ated,” he said.

Shar­ing more on the in­vest­ments the CEO said that around 3-4% of the turnover will go into it, which is around Rs 400 crore. This in­vest­ment hap­pens on a yearly ba­sis. The engi­neer­ing firm also has a 3-pronged ap­proach. With build­ing it in-house it of­fers many global tech­nol­ogy lead­ers to have a col­lab­o­ra­tion for en­ter­ing the In­dian mar­ket and will also re­duce the cost for their home coun­try by at least 30%. “We will do low­cost engi­neer­ing here. For many com­pa­nies, we are re­duc­ing 20-25% of their cost, even for their home coun­try. Now they have started buy­ing a lot of cast­ing forg­ing from us. If they are deep into this, we can ba­si­cally de­sign ma­chine and send it to them as it is much cheaper. This is more than ex­port­ing, called con­tract man­u­fac­tur­ing,” Di­pankar said.

Es­corts Rail­way Equip­ment Di­vi­sion will also be de­vel­op­ing new prod­ucts that in­clude dif­fer­ent types of brake sys­tem, air con­di­tion­ing sys­tem, doors, and many other sys­tems. As the au­to­mo­tive di­vi­sion of the com­pany was mak­ing a loss, it has sold it and is now con­cen­trat­ing only on the three di­vi­sions. Group busi­ness mar­ket cap­i­tal is about $1 bil­lion, and ATP is around Rs 6,000 crore.

At the ex­pan­sion side, the com­pany al­ready has an 8-acre plant and is set­ting up a sec­ond plant. See­ing the prof­itabil­ity of the rail­ways’ sec­tor, the com­pany’s camshaft plant is now be­ing taken over by the Rail­way Equip­ment Di­vi­sion. It will be man­u­fac­tur­ing cou­plers and air con­di­tion­ers and the ca­pac­ity will be of 2.5-3 tonne. Around Rs 400 crore of in­vest­ments will go into tech­nol­ogy ex­pan­sion and ma­jor ac­qui­si­tions, says Di­pankar. The ac­qui­si­tion will be more for a tech­no­log­i­cal rea­son. The com­pany tar­gets around 25-30% CAGR for the next 4-5 years. On in­no­va­tions, the firm is bring­ing in new ideas for soft­ware and elec­tronic seg­ments. “We can­not do much in the me­chan­i­cal part ex­cept re­duc­ing some price. This is be­cause safety is in­volved,” he said.

On con­tract man­u­fac­tur­ing, he said, “We will man­u­fac­ture the de­sign and also ask them to send their de­sign. The ad­van­tage is one, can make money. Sec­ond, our over­all ca­pa­bil­ity will grow. This is what we want. We will make a lit­tle bit of money, but a huge amount of tech­no­log­i­cal ca­pa­bil­ity. For ex­am­ple, the thin wall cast­ings. If you de­sign for a Ger­man ma­jor once we could de­sign it our­selves for a dif­fer­ent prod­uct. There are sev­eral sources of get­ting knowl­edge and we are mak­ing use of that.”

The com­pany also plans to in­crease its ex­ports to South-East Asia and the Mid­dle East. “We are not en­ter­ing Europe be­cause of the many has­sles and en­try bar­ri­ers. In that way, we feel the ben­e­fits in the African mar­ket and we are do­ing quite good there. Ex­ports should grow and now it is just 5-6%. We ex­pect it to grow at least to 15-20%. For the Rail­ways we have taken a tar­get to achieve around Rs 1000 crore by 2022,” Di­pankar said.

Link­ages with a unique de­sign

Es­corts axle­mounted brake sys­tem, which is an in-house de­vel­op­ment by the com­pany

Di­pankar Ghosh, CEO of Rail­way Equip­ment Di­vi­sion, Es­corts Group

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