Manufacturing – Drives & Dynamics

Mr. G. K. Pillai Managing Director & CEO Walchandnagar Industries Limited.

Mr GK Pillai is a Change Management Leader having extensive experience of 42 years in the Manufacturing Industries both in the Public sector & Private Sector. Presently working as Managing Director & CEO of Walchandnagar Industries Ltd. Pune and prior to this has been the Chairman & MD of Heavy Engineering Corporation Ltd. Ranchi – A central PSU.

Q. Is everything hunky-dory with the manufacturing sector?
We can only say at the moment that there is optimism as far as sentiments are concerned, however action on the ground leaves a lot to be desired. Positive sentiments began to be built up with the coming of the new government in May last year and since then there has been a lot of pro-active work done in terms of unshackling the ennui that had set in. Launch of the “Make in India” campaign, thrust on the defence sector (especially indigenous manufacturing), relaxation of FDI norms, higher budgetary allocations for infrastructure, progress towards critical legislations like GST (consensus building), reforms towards labour related legislations by some states like Rajasthan and finally the attempts being made to pass the “Land-Acquisition” bill with the right amount of consensus are all long term measures which will serve the manufacturing sector in the long run.
The downturn in the commodities cycle especially crude oil, iron ore, etc have to a large extent positively affected raw material costs which have lent support to profit margins of manufacturing companies. However absence of fructification of big ticket investments in core infrastructure like power generation (conventional and nuclear based) have led to order book positions for engineering and manufacturing sector not seeing any significant uptick. Exports situation has also been tepid with feeble recovery in USA and continued problems in the Euro Zone further aggravated by tensions in the Middle East. We do agree that the government will take some time to actually to get things moving and a lot of the pushback is due to stressed balance sheets of corporates. All in all we remain quite hopeful of the potential of the manufacturing sector in the future.

Q. What are the drivers which would give a thrust to the manufacturing sector?
In our view some of the key thrust areas which would give a fillip to the manufacturing sector would be:

• Successful roll out of the Goods and Services Tax – creation of a uniform and fair All- India market.
• A consensus based Land acquisition act wherein there is a reasonable balance between scope for industry to grow further and fair compensation to farmers and land-holders
• Firm steps towards long term interest rate reduction – a step wherein the Central Bank and the Central Government act in tandem towards economic recovery.
• Long pending reforms in the mining sector – both coal and iron ore so as to give a fillip to power generation held up due to disruptions in fuel linkage.
• Clarity on CLNDA clause in the nuclear domain so expedite setting u of NPPs and also to increase private participation.
• A proactive Defence Procurement Policy (DPP) to encourage private sector participation in defence manufacturing.
• Clarity on retrospective taxation issues so as to encourage foreign investments

Heavy machine Shop and Gear cutting machines

Q. Comments on Hi-Tech manufacturing in our industry (heavy engineering), challenges, capabilities
The Heavy Engineering industry has seen a definite move towards niche or hi-tech manufacturing in recent decades. From relatively commoditized offerings in process equipment, sugar plants, cement plants, boilers, etc the challenge has shifted to extremely demanding offerings in nuclear plant equipments, defence applications, aerospace components and structures, ship-building, etc. A major challenge is also seen in handling of exotic materials like composites, aluminium alloys, etc. Very high capital cost in acquisition of the necessary machine tools (which can accommodate such tight tolerances over large sized components) and material handling equipment have inevitably become a pre-requisite towards genuinely building such capabilities. Multi-Axis Boring Machines, Large Turning centres, Deep-Hole drilling machines, Profile Cutting CNC Machines, etc are some examples.Extremely sophisticated and stringent quality control techniques have also developed concomitant to machining and fabrication technology in the domain of Hi-Tech manufacturing. Other challenges include significant investments (both in terms of time and cost) in attaining specific fabrication skills with reference to both materials and equipment. These skills are usually a result of a combination of expert engineering and some amount of trial and error. Qualification of Welders, constant training and upgradation along with skill retention have become keys to success in hi-tech manufacturing.

Specifically speaking of Walchandnagar Industries Ltd, we have been into hi-tech manufacturing for more than four decades now through our association with strategic government agencies like DRDO, DRDL, Indian Navy, NPCIL, ATV Program, ISRO, etc. Our facilities at Walchandnagar and our technical and managerial
personnel have been fully tuned to carry out such activities to exacting standards. A versatile manufacturing facility with a prudent mix of specialized and general purpose machine tools, advanced skills in fabrication and welding, proven engineering expertise and a support ecosystem are some of the building blocks of our facility.
Another significant factor emerging in this area is availability of land especially as far as increasing scale of operations is concerned. With key legislation in this regard getting delayed, it would remain a stumbling block. With sufficient land availability, Walchandnagar Industries Ltd doesn’t see this as a constraint for scaling up its operations in the future.

For more information
Web: www.walchand.com