Ashish Chand says..‘The best thing about India is the availability of engineering talent’
The ground-breaking ceremony was held last November, so the Belden plant is ready in a year?
As a matter of fact the plant is operational from September this year and production has commenced since, though the inauguration is tomorrow, 15th November, exactly a year after the ground-breaking ceremony. It was timed this way for two reasons – one obviously the significance of the date, and second this is a better time post Diwali, more convenient for all the visitors and guests invited for the ceremony. In fact the land was allotted to us by MIDC in September 2017 and within a year we could actually start production so this has been really quick and the government agencies involved in the process all very supportive. The very fact that we could commence production in 52 weeks from the time the land was allotted is very satisfying.
This is just the first phase, so what about the second phase? This plant was also to have an Engineering Centre?
Yes, actually the plant itself is planned in two phases and what we have completed is the first phase where we manufacture very high end cables – optical and proper connectivity cables – and Ethernet switches. We have utilised about 70% of the planned investment of Rs 250 crore, including the acquisition of land. The second phase will commence soon and will add to the volumes plus have some more connectivity products that are very sophisticated and currently being made in Europe. The second phase will be completed in 2019 but the Engineering Centre will not be located here, we will build it at another location about 10 km away as this will be the manufacturing area and since the engineering centre will have a software division, it will be better located at another place considering the talent pool we need there.
Some of these products are meant for exports, right?
Yes, we have already started manufacturing and testing the products for the US market and the shipments should start in early December. These are very high end broadband cables for the US market used for last mile connectivity. The requirements of the US market are different, because the broadband speed is high reaching up to 1000 Mbps. So the demand for these cables is very high and that particular division of Belden in the US is requesting us to supply the entire production of these cables to them, which is of course not possible as we have the demand of the Indian market to consider.
Is this particular range manufactured for the first time?
No, Belden has production of these cables in China and Mexico. But the Indian plant being the most recent is also the most modern with the latest, highly sophisticated machines imported for the production of these cables, where reliability is a crucial factor. This is the consumer market and here high reliability is very important as the market does not accept anything less and if there is a problem, the word spreads fast and you lose the order and get a bad name, something no business can afford. Thanks to some of the schemes of the Indian government we could import these high end machines as the tariffs were not only less but there was also a refund in some cases.
What are the other product lines manufactured for the Indian market at this plant?
Belden caters to four different industry segments, viz., Process, Energy, Transportation and Factory Automation. The bulk of the products we manufacture in India are for Process and Energy, as the Factory Automation is still not a matured market here and the needs of the Transportation are more or less being addressed adequately as a lot of metro projects are commissioned, and airports modernised. Factory automation will mature in the next 2-3 years as thanks to the GST a lot of plants that were scattered across different locations will get consolidated and then that will trigger a demand for high end products. So at the moment it is the Process and Energy segments where the demand is high – oil & gas, chemicals, pharma, and of course electricity. The best thing about India is the availability of engineering talent with very high awareness of the applications and requirements. Earlier there was the problem of non-availability of the right products which is now addressed with this plant.
What about the testing equipment and quality control?
In this plant we have installed some of the best and very expensive test equipment available, a fact noted by one of our customers who mentioned not seeing such equipment at any of the competitors in the market. And the reason Belden is a premium brand is because there is a sort of insurance policy – when you buy our product there is no reason to worry. This only happens with very regular and very intensive testing. There are various types of very high quality testers and analysers for network analysis, chemical analysis, etc. We are also very conscious of the environmental impact in terms or biodegradability and sustainability of the materials used.
What are the applications of these products in the Indian market, especially from the cyber security perspective?
Two of our main markets in India are the Enterprise and the Industry segments. In Enterprise we have a very strong footprint in retail and non-banking finance segments. We also see strong interest from large software companies operating from multiple locations. As for the Industry segment, we initially thought Energy to have a large potential, but that has not happened as the regulations are not very stringent at the moment. But the oil & gas industry has a lot of demand, driven by the companies rather than regulations, as the security aspect here is very important. Plus there will be the demand from Smart City projects.
What will be the role of the Engineering Centre and the Software division in it?
The high end customers do not have any problems in buying our products for their mission critical requirements as they are aware of the safety standards and their own requirements. But for mid-range buyers there are two issues, first being the high price. But the second is more crucial. Many of the features are probably not required or not relevant to the Indian market. So at the Engineering Centre we will help customise the products to their needs and application. Once this is done, there will be some R&D to develop such products not only for the Indian market but also export to other markets.
As for the software element, it was planned to be a part of the Engineering centre as the cyber security market in India is rapidly evolving since a lot of Fortune 500 companies are operating here, storing and processing data. As we are still planning the finer details of the Engineering Centre it is not possible to give any figures, but about one third of it will focus on software.