Ajit Lele, CEO, Mahindra Composites "The Major Growth Driver for Composites Consumption in India is Not the GDP Growth but 'Change Over' from Traditional to Composite Components"
Mahindra Composites Ltd (formerly Siro Plast Ltd) was established in 1982 with technical collaboration with Menzolit, Germany. Subsequently Mahindra developed materials suited for Indian conditions. Some of the significant developments are the "Halogen Free" materials for electrical applications, achieving UL094 approvals with V0 fire retardant properties and automotive applications for Head Lamps with antifogging properties at elevated temperatures.
Mahindra Composites have been the pioneers in India to setup SMC machine with 48" width, besides having expertise in (DMC / BMD) for Compression and Injection molding applications in '90's itself. Mahindra Composites have manufacturing locations in Mangaon (approximately 150 km south of Mumbai) and Pune.
In an exclusive interview Ajit Lele, CEO, Mahindra Composites shares his experience with Editor, Lucintel, K. Venkateshwar. Rao. Excerpts:
1. What are the key drivers for composites consumption in India?
Ajit Lele: International players with composite part designs coming to India, low per capita consumption as compared to US & Europe and low penetration of composites per (commercial) vehicle coupled with low labour cost and availability of technically sound manpower who can imbibe new technologies are some of the key drives of composites consumption in India.
The availability of good quality resins & designers, weight reduction drive in the Auto Industry and stricter rules & regulations in Auto Industry and hike in the price of steel price is greatly boosting composites consumption in India.
2. What are some of the key challenges faced by Your Company in the composites market?
Ajit Lele: Availability of RM sources which compete in quality, cost and delivery, design expertise and validation knowledge at customer end are some of the challenges being faced by Mahindra Composites. End user mind set that composite products are inferior to sheet metal and issues on recyclability & scrap disposal are other challenges being faced by the Indian companies.
3. Tell us about the impact of government policies on Indian composites industry?
Ajit Lele: More funding in infrastructure through Urban & Rural (JNNRUM, RGGVY etc) renewal missions will boost the business of composite pipes, enclosures for meter/distribution box, etc. Factory built cabin norms will force commercial vehicle manufacturers to use composite parts in order to impart more styling, part consolidation and weight reduction as it is in US and Europe. Defense offset program will encourage Indian composite industries. Discussion on Metro railway in 20 Indian cities will showcase composite coaches as in Delhi metro.
4. Key challenges faced by composite end-users in India?
Ajit Lele: Reparability issues, Paintability and Surface finish, Disposal (End of life) Replacement of spare parts are the challenges faced by composite end-users.
5. Government support and policies change that is required to encourage exports of composite components?
Ajit Lele: No policy of government as such is hindering the export of composite components. Export is governed only by the cost factor. Any other sort of Governmental support like subsidies will prove beneficial or encourage exports in the long run. Composite parts have to carry a large cost burden of "transport cost" & hence become less competitive for exports - which is world wide phenomenon.
6. Emerging applications that you foresee to have a significant bearing on the composites consumption?
Ajit Lele: The Indian Railways may modify outdated coaches as per the suggestions of Mrs. Mamta Banerjee, Cabinet minister for Railways. Companies like bombardier will come into the picture and design high-tech composite coaches for high speed and efficient trains.
International composite component manufacturers may set up shops in India and bridge the technological gap, vehicles (commercial) and tractors with more kg of composites will significantly increase composite consumption. Construction Industry will push composites consumption due to ease of fitment and very low maintenance.
7. How has global slowdown affected the market? How has been your organization's growth in the last 2-3 years and how do your foresee the growth forward?
Ajit Lele: In US and Europe, where composites industry is almost matured, the recession is equally affecting composite industry just like any other industry. In India, case is different. First of all, the growth is due to domestic demand. The major growth driver for composites is not the GDP growth, but it is the 'Change Over'. More and more components, which were in sheet metal, wood etc is getting converted to Composites. For example, the composites per commercial vehicle in India is 9.5 kg where as in US & Europe, it is 30 & 40 kgs respectively. Even if the annual production of vehicles is going down due to recession by 50%, composites can grow by more than 100% if we achieve the technical competency and European levels. In addition, many new ideas are creating new composite parts.
Since last 3 years we are steadily growing at 30% YoY and we expect a growth more than this in the coming years.
8. Do you see high-potential for composites in the market? If yes, what are some of reasons for the same?
Ajit Lele: Immediate growth will be seen in composite auto parts, as and when Indian composite companies acquire technological parity with Europe and US. Lack of infrastructure in many of the Indian cities including metros and since signs of change are visible with huge funding in infrastructure projects shows there will be a very high demand for composite pipes. Due to low cost labour and Government incentives for non conventional energy, India will grow and sustain as a hub of wind turbines. Since India is having more billionaires and millionaires than any part of the world, high end leisure products like yachts, carbon fiber sporting goods will register a huge growth.
Need to improve Designs in Auto/Tractor/Off Highway will create more demand as also maintenance costs will drive use in Construction Industry, GDP growth & Power sector will push Composite requirements in the Electrical sector.