Rajesh Khatri, Executive Director and CEO, TAL Manufacturing Solutions Ltd shares with Ahlam Rais the latest trends of the manufacturing industry along with his future fiscal targets.
TAL Manufacturing Solutions, a TATA Enterprise, is a 100% subsidiary of TATA Motors and one of the leading companies in India, delivering manufacturing solutions for over 40 years to customers in automotive and heavy engineering and more recently, to aerospace and defence sectors. It also provides cost effective automation solutions, including its ingenuously developed 5/6 axis articulated robots, to the industry.
TAL Manufacturing Solutions has two facilities in India. What is the total investment carried out by the company for each of them?
Rajesh Khatri: In our new Nagpur facility, we have invested more than Rs 100 crore in the last one and a half year whereas in our Pune facility, we have already invested more than Rs 15 crore in the robotics business. Our company has indigenized and developed robots in the shortest possible time i.e. in less than 2 years.
In the present scenario, many Indian players import their machines. Do you think this trend will change with an increase in local production of machines?
Khatri: Yes but it will take time; today 50% of the machines are imported and this is primarily because special machines are not ‘Made in India’ especially the large machine used for the aerospace industry. Secondly, we still have a long way to go in terms of technologies, aesthetics, quality of the machine, reliability of the machines, etc. These are some of the areas where we still need to benchmark and improve our machines in order to meet the global standards.
What are the latest trends of the manufacturing industry?
Khatri: Industry 4.0 is a buzzword, there is a need for automation but a bigger trend is closed automation which is not only sweeping India but the globe and hence, the earlier we start the better. At present, we are way behind in automation as far as the world is concerned. The density of robots in India is less than 1, one in ten thousand workers. Whereas in China it is around 50 and it has grown more than 90 – 100% CAGR over the last few years to reach the figure of 50. Korea is at 450 so imagine the effort which will be required to reach there. The good thing is that we are growing quickly and the growing awareness will work well for us.
How has the ‘Make in India’ campaign helped the manufacturing sector to grow? Can we expect India to be the next China in the coming years?
Khatri: A lot of emphasis has been given to the manufacturing industry in the past two years because of the ‘Make in India’ campaign but how many new industries have been set up? The campaign has remained at a macro level but we need it to translate into policies which will benefit the industry.
In addition to this, we have also been talking about the ‘Ease of Doing Business.’ We have moved up on certain scales but we still have a long way to go. We need the government to be more focussed and dedicated in terms of providing policies in order to promote manufacturing.
Certainly, we will catch up with China as we have the potential but it requires the support from the government in the form of policies. For instance, in China the local government provides numerous incentives and subsides for the manufacturing sector. However, in India we are not given any subsidy. In Italy too, for selected machines which the localities buy they are allowed a depreciation rate of 125% whereas we are doing it at the normal rate of 10–15%.
We are at a macro level and if we really want to translate it into action than we have to go down into the micro level which focuses on manufacturing. We are looking forward to a lot of support from the government.
The GST has already missed its first deadline of April 1. What are your thoughts on the implementation of this vital policy?
Khatri: It will be very effective. Initially, it was expected to roll out on April 1 but even if the government is able to implement it by June1, 2017 the industry will be happy with it. The GST will be a ‘game changer’ as we will be sending out good signals and it is a step in the right direction. This will have a positive effect on the Indian manufacturing industry!
What is the expected turnover for your company in the next five years?
Khatri: By the end of March, we are likely to cross Rs 300 crore for the first time in our history. We are still in our initial stages as aerospace is yet to come to India in a big way and we have launched our range of robotics in September 2016. We expect to have sold about 50 robots by March end.
We have our vision of touching around Rs 1,000 crore in the next five years i.e. by 2021. We expect our aerospace business itself to cross more than Rs 600 crore, it is an area on which we are focusing on.