Supreme & Co : The true spirit of entrepreneurship

Mr. Harish Agarwal, CEO,
Supreme & Co Pvt Ltd.

Q. Supreme & co was established in 1970 as a fasteners manufacturing unit. Over the years, the company has evolved into india’s leading manufacturer and exporter of products for power T&D, construction, telecom & engineering industry. What were the company’s key strategies that were implemented in order to obtain this strong growth?
We are an entrepreneurship-driven organization. The spirit of entrepreneurship is not just with the entrepreneur alone. It’s all pervasive. As an organization, we all believe in saying yes to the customer needs. Saying yes is easy but delivering is difficult. But we have worked very enthusiastically, synergistically and cohesively to deliver on this “YES”.

Q. Supreme is one of the strong contenders in the indian T&D market. How has supreme been able to nurture growth in this market?
Our growth is driven by strong fundamentals. We have no external investor breathing down our neck and giving us an Investor-focused strategy to work on. We have no investor-driven top line growth imperatives. We have always followed the fundamentals. We know that future is in delivering the customer needs. Future is in innovations. Future is in spending on research. An investor will come and want us to build top-line for nothing. We have followed largely organic path to growth. And our growth has been over a long term. We have focused on sustainable growth.

Q. What are your company’s key initiatives to offer advanced and sophisticated technologies (like smart grid) in the t&d market?
Smart Grid is an evolving technology. There is no such fixed definition of Smart Grid. It’s all a matter of how Smart Grid is a Smart Grid. What was smart yesterday is not so smart today. The whole world is working on it but nobody has a fixed course charted yet. India has also taken up various Smart Grid initiatives at different levels. The most cohesive, integrated, well-coordinated and well thought Smart Grid initiative that has been taken up in India is by Power Grid last year, where they have been collaborating with Puducherry Municipal Authorities. Puducherry Electric Company, all the premier Technical Institutes in India, leading Energy Consultants, IT companies, Metering companies, Equipment Manufacturers to make a joint effort to develop a range of open source inter-operable solutions for setting up a Smart Grid pilot in India, which is now truly on the way in Puducherry. That Smart Grid pilot will let people see the first hand benefits derived visa-vis cost incurred. As the process of setting up of the pilot is taking place, the cost has already started coming down for various components. Our Advance Metering System is getting installed in Puducherry next week.

They have been tested as per IEC. After the pilot is there, the Discoms, the consumers, the Transmission companies, Power Generation companies, Regulatory Authorities, Power Exchanges, they all will have the opportunity to see it first hand and assess the cost-benefit binomial of the Smart Grid. And what Power Grid has ensured by the way of their experience that they have introduced a pilot which is completely a non-commercial and there is no intellectual property right ownership. Everything is open source inter-operable and nobody has an opportunity for taking anybody for a ride. This is a national project. People who are willing to be part of it are collaborating. Business Model for them will emerge out of satisfactory completion of the overall project.

Q. India is expected to invest Rs. 7 Trillion in its power T&D sector in the xii – plan period, what initiatives are you taking to seize opportunities thrown up by this investment?
The opportunities are huge and the money will also come. But ultimately money will go only to places where meaningful assets actually get built or sustainable returns come from there. Why the sector ran into trouble? It was partly because many people took lot of business whether as EPC Contractor or through open bidding, had no experience or understanding. People started quoting absurd rates. And what happened ultimately …that Transmission Lines failed to emerge. The person who had taken the Contract to build the line was not willing to build it anymore because he was suffering losses.

The business evaporated not just because there was no money for it. That situation was also there. This was aggravated by Discoms accumulating a debt of Rupees 3 Trillion which also contributed to the downturn. But again that was not the only cause of downturn. It was also because across the Board, people had been taking business which they were not able to deliver. Either they had taken the business for which they are not ready or they had taken business without knowing the prices or knowingly that the prices were not good but hoping that something would emerge out of it later.

Our strategy is to stick to fundamentals. In spite of so much investment coming to Indian market our focus is on the international market. Because the advantage of being at international market is that you are always close to fundamentals. In an international market you cannot survive a day without strong fundamentals. We keep increasing the range of our Prototype Testings. And put systems in place which will respect customer’s timelines. We strive to maintain the functional integrity of our products all the time. We have always taken a long term view and we continue to grow in the long term. In every boom when it emerges in the short term, a lot of players come with very strong top-line focus. They would want to take orders in any situation. So you consciously decide to stay out of it and let them have it. But in long term those consumers have no options but to come back to you.

Q. Supreme, in collaboration with group companies webspiders and supreme gridtech offers complete ene-to-end solutions. What are some of the successful projects that the collaboration has carried out lately?
That is the part of our strategy of offering a wider gamut of solutions to try and offer end-to-end solutions. Getting involved with WEBSPIDERS gives us an IT-perspective. It made us realize the value of IT-empowerment in any process. Supply of electricity is also a process where downstream activities were missing out IT-empowerment. And when this initiative came, due to our involvement in IT business we knew the possibilities and potential of that.We have worked on a 1200 KV project despite experience of only up to 220 KV. We were the first to supply and our products were the first to be installed. We got lot of international leverage out of that. And now we are an international brand, similarly this Smart Grid City pilot is going to be very significant project. Because world over Smart Grid is like a wave. It’s a movement now. This project will enable us to become an active part of that movement now. This is going to be the internet of electricity.

Q. The government has recently announced the debt restructuring scheme for distribution companies. Do you think this is going to have a positive impact on the financial health of state the distribution companies?
This will go a long way. When it actually gets implemented, it will go a long way in pulling the T&D industry out of the deep hole it is in. For two reasons number one all the Discoms are completely starved of money. They will get much needed Oxygen. So far they have not been given Oxygen. They were always given steroids. Because, the money which will be granted is linked to the more sensible tariffs that they are going to charge. It’s not a giveaway that they are getting. I am not sure about the exact nitty-gritty of the policy but I am given to understand that the redemption of the loan been given is being envisaged to be paid out of the increased tariff and reduction in AT&C losses. If something like that actually takes place, it kills two birds with one stone. Because, it introduces the systemic corrections which were missing and it is giving the much needed vital finance to the Discoms.

Q. What are your views on power distribution through franchise mode? Do you think this will lead to reduction in power theft and improve revenue realization for power utilities? What according to you are the major road blocks for adoption of this model in india?
I don’t have a very good idea about it but on face of it as I understand that it has been a limited success. Essentially it is a kind of public-private partnership. This experiment has not been a uniform success although on paper it looks very good. Some experiments of Torrents and Tatas have by, all accounts been successful. In India it also has been a partial success at some places but in some cases it has failed because people have taken business without doing their diligence and homework. See, initiative is good, but if a contract goes to the highest bidder, and the highest bidder goes too high, nobody is going to fund him. Discoms can still be funded by the Governments one way or the other but who will fund a private operator, if you make some mistake and where your money going to come from.

Q. Are you looking for the new alignments at global level to diversify your export basket?
Yeah…….! From the marketing point of view, yes. For combining with other manufacturers and for offering combination of products, yes. But, purely Technical Collaboration for our range of products. Right now it’s not in the plan. Because, we have developed most products on our own that industry has globally required and we have not gone for the softer option of shying away from investing in Type Test, going into the collaboration to avoid doing the Type Tests on our own. We intend to invest heavily on Type Testing our products globally for the next two years because we already have developed most of the products which are available globally for our range of business.

Q. After the success of 1200 kv test station at bina in madhya pradesh, what next?
See, the next milestone is as I said is becoming a fully qualified player for the entire range of hardware, Connectors & Conductor Accessories in UHV segment. We still have a lot of pre-qualifications to cover for the commercial side of the business which we are addressing gradually and we expect the next two years are going to be very critical where our PQ level for our range of products will be at par with any manufacturer in the world.

Q. You have been conferred various national and international awards, so what do you attribute your success to?
It is again the faith of the people, their ability to deliver. See when people have given up a business when we didn’t have anything, and we delivered it to them.

Q. How do you differentiate supreme from other manufacturers offering similar products and what keeps you ahead of them?
Working at non-remunerative prices is a worse form of greed than working at higher prices. Ultimately what happens, you get under pressure, and you take business at unsustainable prices. The buyer doesn’t remember that. Any problem that comes he remembers all his life. He doesn’t come back to you.

Q. What are your future plans and share with us your vision for supreme for the next two decades?
Two decade is a pretty long time. We don’t exist in a vacuum. We are a part of an industry. We have seriously been pursuing and developing various Energy Management Solutions and Smart Grid Applications. In the next 10 years, we will be highly active in the developments of various Smart Grid Applications, as the investments in various Smart Grid Applications in India are envisaged to be around Rupees 3 Trillion during this period.

Globally, the numbers keep coming which you can’t even count. We have been part of the pilot. We have a Development Centre in Bangalore for the software for this family of business.

Q. Tell us about the mou that supreme has signed with power grid corporation of india (pgcil) for the 1200 kv transmission line system.
SUPREME has signed two MoU’s with PGCIL so far – one was signed some 6 to 7 years back for developing Hardware and Conductor Accessories for the 1200 KV Transmission Line, where we had supplied most of the Insulator Hardware, Conductor Accessories and Clamps & Connectors and they are all working on the line, quite satisfactorily. This is the highest System Voltage used in the world so far and is a very prestigious project. Supreme is very actively involved and the business model of this will emerge after the trial is completed. The good thing about this project is that while even at 765 KV there were very few Indian manufacturers qualified when it was brought into India, for this test station all the product and equipments used are indigenous. The second MoU was signed with PGCIL last year for their pilot Smart Grid project in Puducherry, where we are providing many services like Advance Metering Infrastructure, System Configuration, GIS services. They are willing to provide their own grid for trial. So, once this pilot is completed, it will be our significant contribution to a national project, because cutting down AT&C losses is the primary concern of the Indian Power Sector. Current AT&C losses are unaffordable for any power sector.

Q. Enumerate the difficulties that you initially faced during the manufacturing of 1200 KV equipment.
There were lot of challenges in the sense that we were not even in the Power Grid’s approved list for 400/765 KV Hardware and Fittings. So, it was a quantum leap for us from 220 KV direct to 1200 KV. We had to substantially augment our manufacturing facilities only for the sake of supplies to non-commercial Test Station.We invested very heavily into Dies, Tools and Testing facilities. We installed a 200 ton Test Bench which would only be needed for a 1200 KV Quad Tension Strings. A large range of dies were developed and then all these supplies were done non-commercially. And non-commercially is off course only a matter of expression because when we send our materials for Performance Testing outside India, we not only supply without payment but we also have to pay them very hefty charges for using their Test Bench for testing. In this case, the test station was available to us without any extra charge. So, the new technology that has been developed is a quantum leap in Transmission. Having said this, the challenges in development of new facilities, new test abilities, new dies were not engineering alone in nature but also required commitment of such significant investment in non-commercial supplies.