Established as machine designing firm in 1979, Ace Micromatic Group today has emerged as one of the leaders in the global machine tools industry. The Group manufactures CNC lathes, machining centres, CNC grinders, machine tool automation sub systems like turrets & productivity monitoring solutions. The group markets its products globally with offices in Europe, China and a wide dealer network. In this interview with Rakesh Rao, T K Ramesh, Managing Director of Micromatic Machine Tools Pvt Ltd (an Ace Micromatic Group Company), highlights on the changes taking place in the industry and the group’s strategy for the next phase of growth.

How the group evolved from designing machines to being one of the leading global players in the machine tools industry?
We have been selling made in India products for over 40 years. We design and build quality machines as we understand local condition and requirements of customers in India very well.

Ace Designers begin its journey in 1979 as design consultant for machine tools industry. Later, we forayed into manufacturing by building machines for making engine valve. In 1986, we made our first CNC machine and exhibited at the inaugural edition of IMTEX. This was also a time when Maruti Suzuki and other companies were establishing their auto manufacturing plants in the country.

These car makers started sourcing components from Indian suppliers, who needed high-quality machine tools to meet the international quality standards of auto players. This provided us a big opportunity to grow by offering locally designed and made machines for cost-effective manufacturing of auto components.

Today, we have the largest network with 55 offices across country in this sector. We have a global presence and have office in China, where over 2000 machines are operating.

How do to you look at some of the recent developments in the machine tools industry?
There are two aspects to it - the machine and tooling. From machine perspective, in the last 10-12 years, one significant change has been the increased role of electronics; so "electronisation" and then computerisation have made a big change. Today, about 90% of the basic features and specifications of machines (whether it is made in India, Germany, Japan, or any other part of the world) are similar; the difference lies in the performance of the machine. The performance requirements also depend on the end-use industry. For example, if a part goes in automotive as well as aerospace, then precision required in aerospace will be much higher than auto.

Besides machine, tooling plays a big role in enhancing performance of the machine tools. Tooling has seen a lot of changes in terms of materials used - earlier it was high-speed steel and carbides, now you have diamond, ceramic, poly-materials, etc. So fundamentals have changed from process to materials. In basis research about materials, developed countries are far ahead of us.

While Indian manufacturers may be at par with global players in terms of technology, developed countries are far ahead of us when it comes to tooling as they are very strong in basis research about materials. India needs to catch up in fundamental research, workmanship, etc to become a dominant player in the global machine tools industry.

Which end-user industries are driving the growth?
Auto industry has been a key growth propeller for the industry and it will continue to be so in the near future.

With the government providing incentives for local manufacturing of aerospace & defence equipment, the sector offers a bright prospect to the machine tool makers. Electronics is also opening up a window of opportunity for the Indian machine tools industry. But, the kind of machine tools required for it are fundamentally different from the currently build machines in India, as electronics need high precision.

How do Ace Micromatic plan to capitalise on the new market requirements?
Ace is looking at three thrust areas - aerospace & defence, infrastructure (construction equipment) and making machines more intelligent.

As machines needed for auto and defence equipment are similar, we see huge potential for us in aerospace and defence – a machine tools market where we enjoy 35% market share in India. With the government investing heavily in infrastructure development, the demand for construction equipment and off-road vehicle is experiencing a growth, which will propel the requirement of machine tools - an area of our expertise. We are also focusing on exports market in the last 4-5 years and exploring opportunities is countries like Mexico, Russia, etc. Global markets for existing products and new developments for defence & aerospace will be our area of thrust for growth.

We are also focusing on digitalization and increasing intelligence of our machine to improve their productivity.

While machines are getting smarter, they also have to integrate with other parts of the shop floor. For example, robots are used for loading/unloading purpose on the machine, which requires connectivity (integration) between the loading/unloading system and the machine.

With number as well as variety of cars going up, machine tools (used to make components that vary from model to model) require changeover, which is a big problem in machines. The speed with which the machine can accommodate change-over (to make a family of parts) determines the efficiency of the machine. It is important for machines to understand the external inputs for smooth functioning and operations. This (integration and connectivity) makes machines smart.

What are the key challenges before the machine tools industry?
Getting trained and skilled workforce is the major challenge before the industry. Second is inadequate infrastructure and logistics.

Besides, technology changeover in the auto industry (one of the leading consumers of machine tools) from internal combustion engine (ICE) to electric vehicle is posing a challenge. For example, in ICE, engine itself has close to 1000 parts (which are made on machine tools). In electric vehicle, there is no engine.

What are your growth plans for the company?
Our growth will be driven by the new products (with addition of smart features), globalisation and digilatisation. Due to the new geo-political situation, the new mantra seems to be "Some globalisation, lot of regionalisation". We intend to increase contribution of exports to our turnover from the present 11% to 25% by 2025.

We see additive manufacturing (3D printing) as a growth area for the future and have already got into metal additive manufacturing machines through our unit Amace Solutions. We have been in metal cutting business all these years, now we are venturing into metal forming with laser cutting machines. We are also process of integrating turning, milling and grinding into one company.

At present, we have about Rs 3000 crore turnover with 8000-9000 machines installed. By 2025, we aim to become a Rs 10,000-crore company with 20,000 machine installations.