Despite the current slump in the Indian forging sector, Pune-based Kalyani Forge Limited is looking forward to increasing its production capacity. In this interview, Viraj Kalyani, the company's executive vice president, outlines the reasons

Kalyani Forge Limited is one of India's oldest and most established manufacturers of precision forged and machined components. The company's technical capabilities include hot, warm and cold forgings as well as precision machining. With 3 TS 16949-certified facilities in Pune, Kalyani Forge is ideally located near raw material sources as well as the seaport of Mumbai. It has developed superior quality forgings through continuous improvement in quality control systems; technology upgradation; and creating a congenial work atmosphere for betterment and growth of employees. The company's customer base includes global leaders in automotive and non-automotive segments. With over 30 years of experience and deep technical expertise, Kalyani Forge today provides design-to-launch capabilities which are critical for its customers' success.

On the company's senior board of management is Viraj Kalyani, Executive Vice President. Born on April 12,1990, he graduated from the Jerome Fisher Program in Management and Technology at University of Pennsylvania, a four-year dual-degree program, with a Bachelor of Science in Economic, Concentration in Finance at the Wharton School and a Bachelor of Science in Engineering, Major in Mechanical Engineering at the School of Engineering and Applied Science. Viraj Kalyani joined Kalyani Forge Limited as Executive Vice President in the year 2012 and contributed towards implementation of the current expansion plan, business systems, and research for potential new business opportunities' and diversification. Excerpts from the interview:

What is the overall scenario of the forging industry as of now?

The Indian forging industry is not too optimistic of growth in forging production in the ensuing fiscal too, especially with the ever growing energy cost, which has shown a steep 36 to 38 per cent increase. The industry is also suffering from compounding problems like slowdown in the automotive sector, non-availability of adequate power, and the high cost of fuel.

Given the highly volatile scenario of the automotive industry, how has this affected the performance of Kalyani Forge?

Under the current volatile scenario, Kalyani Forge has systematically identified and implemented cost reduction measures in its production process and focused on enhancing each employee's productivity. The future also looks encouraging for the forging industry in terms of the expected surge in global demand. As a result of liberalisation, more MNCs have entered the domestic automobile market. This has opened up more business opportunities for the company.

Is there a plan to lower dependence on the automotive sector and diversify to cover other sectors such as construction, engineering, energy, agriculture, mining, etc? Kalyani Forge, which makes precision and machined forgings for domestic and international automotive makers, plans to lower its automotive components business from 75 per cent to 60 per cent in the near term. The company has an installed capacity of about 25,000 tonnes and makes forgings weighing less than 15 kg. It manufactures connecting rods, gears, axles and other forged components.

What is the strategic business and growth plan of the company for the next five years?

We are in the process of adopting a lean manufacturing strategy to reduce waste and grow aggressively through upgradation of the facilities as well as go in for low-cost production through automation. The company is adding capacity to emerge as a strong player in the industry with value-addition processes in manufacturing and design. Further, Kalyani Forge has systematically identified and implemented cost reduction measures.

What kind of R&D is the company undertaking in the forging sector?

The company has consistently managed to be a globally competitive company with a lead in quality and technology. Thus we have gained a reputation of being a preferred source of forged and machined components. As an organisation we have evolved through continuous innovation and technology tie-ups. As part of Kalyani Forge's overall strategy, throughout the year the company remained focused on developing value-added products for all market segments through research and development activities which also focused on process cost reductions through increased yields.

What methods are being employed to make the operations leaner and cost-effective?

A state-of-the-art phosphating and bonderising facility has been installed to take care of special processes that need to be carried out before cold forging operations. The company has, through years of in-house research activities, achieved marked improvements in design and production technology to specialize in the manufacturing of a variety of intricate profile forgings.

What is the export status of the company? Is there a plan to tap new markets?

We are increasingly addressing opportunities arising out of the growing trend among global automotive OEMs to outsource components from manufacturers in low-cost countries. As a result, the Indian forging industry has been making significant contributions to the country's growing exports. In this context, the future looks encouraging for the forging industry in terms of the expected surge in global demand. As a result of liberalisation, more MNCs have entered the domestic automobile market. This has opened up more business opportunities for the company. At present we export around 25 per cent of our overall production to global customers and this percentage is likely to go up in the future.

Is there any plan for capacity addition?

Kalyani Forge has two manufacturing plants in Pune - hot forging and metal forms' divisions in Koregaon and a precision automotive component division in Sanaswadi at Shirur. The company is planning to invest around Rs 200 crore over the next five years. Under the plan, the company will upgrade its current facility and key areas of operations. The company intends to increase the capacity utilisation to 75 per cent in the next two-three years from the current capacity utilisation of 55 per cent.

What kind of percentage growth is the company looking forward to over the next two years?

While we cannot provide any specific number about future growth, the company is expecting a quick revival of the forging industry and is looking at every opportunity for growth. While the company has been making its mark among global customers, there are opportunities to cater to small and medium-sized enterprises as well.