Sundram Fasteners reaps benefits of branching out
TVS group’s auto components arm, Sundram Fasteners, has set an ambitious target to invest ~200 core annually till it reaches a turnover of $ 1 billion from around $470 million today.
The investments will be made to bolster capacity of existing plants as well as to acquire capabilities to cater to emerging trends in automobiles such as electric vehicles. The company has already started supplying parts to Tesla and expects to meet the demand of Indian manufacturers too once sales of electric vehicles pick up in the country.
What gives the company confidence in meeting its growth target is the strength of its brand. “We don’t need to introduce ourselves in the industry today. Everybody knows us. In the last four to five years, we have daily grown both in terms of sales as well as profit,” says Suresh Krishna, chairman and managing director, Sundram Fasteners.
Along with domestic market, exports are going to be central to his plans. The capacity of its plant in China, which was set up 12 years ago, is being expanded to cater to overseas market. Over the next two decades, Krishna expects China to become a significant contributor to its revenues. In 2015-16 exports contributed ~1,000 crore to its overall revenue.
Started in 1966, Sundram Fasteners started looking at exports much before its peers. This meant a sharper focus on quality standards, something that helped the company expand overseas quickly when markets opened up in the 1990s.
“In 1988 as the president
“IN THE LAST FOUR TO FIVE YEARS, WE’ VE GROWN DAILY BOTH IN TERMS OF SALES AS WELL AS PROFIT”
SURESH KRISHNA, of CII, I was convinced competition was coming. But nobody took it seriously,” says Krishna.
As the markets opened up, the company consolidated its position in India even as other players such as Fit Tight and Guest Keen Williams folded up due to labour issues and other problems. It became a supplier to Maruti in India and to General Motors overseas.
Krishna says, “We worked 22 hours a day and we just had to get it right. That is how foreign companies do it. It takes time to convince them, but they finally see the advantage of buying from India.”
In addition to fasteners, the company started manufacturing transmissions, shafts and gears for the likes of General Motors and Ford and launched a factory in Maraimalainagar, near Chennai. It has also expanded into wind energy, setting up a wind energy fastener division in Puducherry. “If I had just stuck to fasteners, I would probably be about one fourth the size of what I am today,” says Krishna.
“Today, India makes 3-3.5 million passenger car and 1516 million two wheelers apart from commercial vehicles. India can make 10-12 million cars, and 50-60 million two wheelers in 10 to 15 years. We are sitting on a good trajectory. It can only go up,” he adds.
The company’s focus is likely to remain on automobiles. Sundram Fasteners is bullish about its growth in India and it hopes to outpace the growth in the automotive industry, he adds.
Meanwhile, to implement Krishna’s vision, the next generation of the family has joined the business. Arathi, one of his daughters looks after the domestic plants including fastners, cold extrusion, wind energy, SEZ etc, while another daughter, Arundathi, takes care of the overseas operations including China and the UK.
“The customers are younger now and they prefer to talk to younger people,” says Krishna.