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Baba Kalyani

CMD

Bharat Forge

3 Ratings

DIGITALISATION Everybody has to be prepared for EV

Jul 18, 2019

….says Baba Kalyani, CMD, Bharat Forge, in this conversation with Shekhar Jitkar and Juili Eklahare. He points out how digitalisation is a must, highlights the work the company is doing in the EV business, and the various kinds of technologies being used in its manufacturing processes to create growth. Excerpts…

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What are the growth drivers for Bharat Forge, so far? What is the strategy for further development?

Our strategy for the past 8 to 10 years has been to create growth through the specifications into other products coming under the industrial part of our business, which has generated a fairly good traction for us and has created tremendous growth in that business. This is a process that will continue. Also, one of the new businesses that we will continue to see a lot of traction in are passenger cars, because there is a huge churn that is taking place in technology – everybody has to be prepared for electric vehicles & hybrid vehicles. At the same time, they have to continue producing what they are already producing.

So, it’s becoming quite difficult to invest in three different technologies at the same time. Hence, suppliers that have capability, strong engineering, and ability to perform are going to get a lot of advantage, as we are beginning to see in this market place.

As for the domestic market today, the last quarter has been a bit of disappointment. However, we are hoping that the government will have a plan to get the economy to kick-start at a much faster pace. So, we should see the domestic market coming back.

Is there any significant change in the business model of the company? How do you look at the group’s growth in the next 5 years?

There are a couple of very significant things that we are doing – the first is embracing IoT and digital manufacturing. So, by the end of next year, our entire facilities will be on a digital platform, which is going to be a major change in how our businesses run. Once one gets on a digital platform, market opportunities open up very dramatically; so, we’ll see many new markets where these kinds of technologies are more relevant, especially in the area of aerospace.

Next, we have created a huge R&D and innovation centre and developed some tremendous new technologies, from emission control to transmission drives for electric vehicles, on which we are pretty much on the forefront. Additionally, we even have a small group using AI in manufacturing. Hence, in a way, we are entering a transition phase – we used to be a very conventional company of forgings, through which we have now become a much more diversified business, doing a lot of electronics, a bit of software, AI, implementing IoT & digital platform in our plants, which all create collateral technologies that can be used in many other things. So, we are using all kinds of technologies in our manufacturing processes to create growth. In fact, when you come to think of it, we might have to change our name 10 years from now, as “forge” would not do justice to our company name because we have now also got into very high technology products.

With the opening up of new opportunities in Indian defence manufacturing, Bharat Forge has been one of the earliest private sector companies to enter this domain in the country. How significant would defence and aerospace be as part of the total business mix for the company?

We have four manufacturing plants in defence, one being in Pune and three in Hyderabad, making very sophisticated air defence systems, with lots of electronics in it. The sector should prove to be very significant in the next five odd years. We are creating completely indigenous capabilities that very few companies have. Defence is an area where one has only one customer, so it’s very difficult to predict what the business model is going to be. So far, India has just been importing a lot of our hardware and, for a country to get used to the idea itself that there are local companies that can produce hardware is a very strange notion.

In the Indian manufacturing industry, how do you see technology evolving among companies, especially with the use of digitalisation in manufacturing? How are Bharat Forge and its group companies dealing with it?

Our focus has been largely on training. Digitalisation is not an option – if a company does not digitalise its manufacturing processes and get IoT into its systems, then it won’t survive. However, the real challenge in making this happen for companies in India is the ability to train a large number of people to adapt to this technology. If one does not train at least 80% of his workforce, right from the president of the company to shopfloor operations, then the company is going to have a hard time.

What, according to you, is the competitive strength of the Indian manufacturing industry today? Do you think the industry is leveraging enough on this to strengthen its global footprint?

In the manufacturing space, India has been competitive for the last 20 odd years and will continue to be so, provided we are able to keep up with new technologies with the rest of the world. Let’s take a company in the US, Germany or France into consideration, with an old plant and that has to adapt to IoT. Here, the cost of doing that is much more than the cost of doing that in an Indian company. Many might say that they will throw away the old plant and bring a new one. Nonetheless, that is not practically feasible as everybody might not have that kind of capital. So, one has to become innovative and make this happen. However, what is important is that if one does not make this happen then he is doomed.

What are your expectations from the government for the industry in the future?

I think the government has set some very clear goals and is going to move in that direction. There are some new opportunities that are going to come because of huge investments in infrastructure that it is targeting, from roads to airports. Water is one of the new activities that are coming in – we now have a new ministry for water, making water a new area of business prospects. It does not involve selling water, but the focus is on the technology for providing clean drinking water. Therefore, we have a lot of positive things to look forward to.

Can you share your views with us on the government’s target of 30% electric vehicles by 2030? Is the recent announcement of strategic investment from Bharat Forge in Tevva Motors, UK, a step in this direction?

We are working in the EV business, creating a range of products and components required for EV and hybrid, for which we will have a whole suite of products that are needed. Besides, we have made investments in the EV business, of which our investment in Tevva Motors in the UK is a step in that direction. We also bought a stake in an electric two-wheeler manufacturer in Pune called Tork Motors, who also makes complete powertrains for three-wheelers. The government wants to turn all three-wheelers electric by 2023 and all two-wheelers by 2025-26. Now we have to consider the fact that this is a huge market, where we are talking of 25-30 million vehicles. But this is achievable. The good news is that electric two-wheelers and three-wheelers don’t really need the kind of infrastructure that electric four-wheelers need; one can charge a two-wheeler from his home. Hence, I think it’s a fantastic move by the government to bring in new regulations because this will bring in a complete new industry in India that was missing.

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  • Baba Kalyani is B.E. (Hons) in Mechanical Engineering from Birla Institute of Technology & Science, Pilani and subsequently, earned his Master of Science from Massachusetts Institute of Technology, Boston, USA, in the year 1972. In recognition of his significant contribution to industry, trade and service to the community, he has been conferred with highest civilian awards from many countries, including, Padma Bhushan by the Hon’ble President of India; Cross of the Order of Merit, Germany; Commander First Class of the Royal Order of the Polar Star, Sweden; and Knight in the Order of the Legion of Honour, France.

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