Initiatives to develop India as a major manufacturing hub seem to be bearing fruit with even privately held firms like Theeta mulling expansion into other business areas.

The federal government initiatives such as Make in India and Digital India are encouraging several leading Indian manufacturing firms to look beyond their existing areas of business. The Gurugram-based Theeta Electricals Pvt. Ltd, also the country’s largest producer and exporter of tubular heating elements for domestic and industrial applications, is one such firm that is currently weighing several options.

“At the moment our focus is on selling our heating elements across industries, which include electricals, petroleum, laundry machines, etc. Our aim is to be not just the biggest supplier of heating elements to specific sectors but number one across verticals. We are parallelly looking at getting into different products, a proposal that is still under consideration,” Avishkar Prakash, General Manager, Industrial & Domestic Sales at the firm told IPF recently. Some of the options that the company is considering are electrical appliances, industrial products and cross-selling.

Following the launch of especially the Make in India programme in September 2014, several global manufacturers have either already expanded their manufacturing operations in the country are in the process of evaluating it. For instance, Theeta has received feelers from a few global players to shift up to 80 per cent of their manufacture of heating elements to India. In this regard, Theeta is even amenable to a strategic tie-up or collaboration with a foreign partner and was in dialogue with several companies, though Prakash said the talks were at a very nascent stage.

But challenges remain. “Presently, we might not be in a position to supply to everyone because certain markets weren’t part of our focus earlier. Similarly, we need to acquire specialised machines as well as upgrade ourselves to the next level of automation.” Recognising this the company has devoted the last one year to restructuring and building capabilities to take full advantage of the emerging opportunities.

Have left GST woes behind

The firm asserts that the challenge arising out of the Goods and Services Tax (GST) rollout in the second half of 2017 are firmly behind it. “In the short-term, it was not good for us either as we too were struggling like everyone else. But in the long-term, it has had a positive impact,” informed Prakash. He pointed out that even though small players in the unorganised space were gradually making a comeback, a significant part of their business was now diverted to firms like Theeta.

In Prakash’s view, such structural reforms were likely to provide a major boost to the Indian electricals industry. “Earlier everything was being imported from China. But in the last one year, a lot of appliance manufacturers have started manufacturing here. If I talk about water heaters, the market has witnessed Jaguar, Hindware and Ferroli launching their products.” The development, he pointed out, made it obvious that there was potential for further growth.

Manufacturers no longer wary of China

Prakash also felt that Indian manufacturers were no longer scared of China like they were a decade ago. He felt the fear resulted from the rules that penalised local manufacturers for even the slightest deviation in quality while products imported from India’s largest neighbour would often escape regulatory scrutiny. But with the government now keeping a close eye on cheap imports to prevent dumping and China becoming expensive by the day, the trend was reversing. “China is no longer a destination for cheap manufacturing. I expect that to continue and finally help us. We are expecting electrical manufacturers to switch base to India for appliances and other products,” he predicted.

Prakash felt that India’s unique mix of labour and technology will start working to its full advantage in the years to come.

A privately held firm, Theeta’s management team consists of well-qualified engineers and professionals with over decades of experience in the specialised field of electrical heating. The heating elements are manufactured at the company’s plants located in states of Haryana, Delhi and Himachal Pradesh. - Manish Pant