Despite the slowdown in the automotive industry, Pune-based RSB Transmissions (India) Limited has managed to not only utilise its production capacity but has also forayed into new markets across the globe

In 1975, two young entrepreneurs from Jamshedpur from a humble middle-class background plunged into the hurly-burly world of business with a passion and dedication to do something different, to traverse a different path. For the brothers Rabindra Kumar Behera (RK) and Suvendra Kumar Behera (SK), "dreams were responsibilities". RK had just chucked the security of a job with Bokaro Steel after graduating as a mechanical engineer from NIT, Jamshedpur and SK was pursuing his commerce education. They ventured with little finance - a mere Rs 15,000 - borrowed from their father.

The duo established International Auto Products, a sole proprietorship company and the operations commenced in 1975. After several transformations it became a public limited company, International Auto Limited, in 1994, which eventually merged with RSB Transmissions (I) Limited in 2009. The group has, in a span of three-and-a-half decades, grown into a global engineering institution. Excerpts from an interview with M Sankaranarayanan, President, RSB Transmissions (I) Ltd.

Could you provide a profile of your company?

RSB is a leading global engineering institution with turnover in excess of Rs 1,400 crore, manufacturing a wide range of products, viz., propeller shafts, steering systems & components, transmission components & assembly, other automotive components, etc., and construction equipment aggregates. We operate in several countries. Presently, RSB has 14 manufacturing plants spread over seven locations in India, namely Jamshedpur (Jharkhand), Pune (Maharashtra), Dharwad (Karnataka), Chennai (Tamil Nadu), Pantnagar (Uttarakhand), Cuttack (Orissa) and Lucknow (Uttar Pradesh); and one each in Homer (USA), Tessenderlo (Belgium,) Silao (Mexico) and a partnered venture at Brazil.

RSB has two verticals, viz., automotive and CMI (construction, mining and infrastructure) equipments and aggregates. In the automotive vertical, RSB is a leading global manufacturer of propeller shaft systems & components, an array of axles including front axle, trailer axle, tractor axle, dummy axle & banjo axle beam, fully finished gears, shafts, hubs & sleeves and passenger car steering systems, viz., manual/power steering gears, axle components like differential cases, yokes and carriers for medium and heavy commercial vehicles, passenger cars, tractors and light commercial vehicles. In the CMI segment, it is a leading manufacturer of heavy fabrications and aggregates like frames, arms, booms and buckets for excavators, back hoe loaders and front end loaders.

Do you have a strong international presence?

In 2006, RSB made its first foray overseas and acquired Miller Brothers in Michigan, USA. It further expanded its global footprint by making another acquisition in Belgium in 2010 and then set up a greenfield project in Mexico in 2011. In June 2013, RSB Transmissions (I) Ltd signed a technical know-how agreement with Fontaine 5th Wheel, UK, to manufacture and sell 5th wheel coupling for domestic market under the brand name RSB-Fontaine and export to Fontaine, UK. In December 2013, RSB started partnering with DHB Automotivos, Brazil, an USD150 million global enterprise. They are the largest manufacturer of passenger car steering systems in Latin America. With this, RSB has now made an entry into the Latin American market, which was hitherto untapped.

In November 2013, RSB joined the select band of elite global quality corporates after having been conferred with one of the world's highest awards in TQM (Total Quality Management) - Deming Prize (one amongst few Indian automotive companies to get this award) by JUSE (Union of Japanese Scientists & Engineers) at Tokyo, Japan, for achieving all-round business excellence - a globally accredited mandate for highest product quality and service.

What is your expansion programme for the coming five years?

We will increase our global footprint through taking our products to global markets, move up in the value chain and set up more shops across India when the country's growth story unfolds.

Who are your leading customers?

RSB's Indian and overseas customers are OEMs like Tata Motors, Ashok Leyland, Mahindra & Mahindra, John Deere, Fiat, Daimler, Volvo, Ford, Allison Transmissions, American Axle, Eaton, Magna, GKN, Renault Nissan, Kamaz, Tata Hitachi, Caterpillar, Terex, JCB, Kobelco, Komatsu, GE, Volkswagen, Ford, PSA Peugeot Citroen, etc.

Could you list some of the company's recent achievements?

As already mentioned, we signed an agreement with Fontaine 5th Wheel, UK, in June 2013. In the same month we also commissioned a plant at Jamshedpur. November turned out to be a milestone for the company because of the Deming Prize and immediately the month after that we were able to foray into the Latin American market. In March 2013 we developed propeller shafts for the Volvo for the bus application as per Southeast Asian requirements.

How has RSB successfully battled the recent slowdown?

The year 2013-14 has been a very challenging year. Uneven swing of economy; fiscal measures posing serious challenges in growth; rupee value taking a downward swing; crude prices shooting up; sluggish buying power, etc., took a sizeable toll on the automotive component sector. However, with aggressive tapping of unexplored markets and a cost reduction drive, RSB has managed to sail through with very few obstacles. This also gave us an opportunity to strengthen our processes through continual improvements and be ready to face similar challenges in the future.

What, in your view, are the opportunities and prospects in the future?

The market has bottomed and an upswing is expected in this FY with signs of brightening up in the horizon of the automotive component industry. The market is expected to be moving up in the second half of the year with the government taking initiatives focused on development.

What is your expectation from the new government?

Some of the expectations are:

• To attract investments from within and overseas
• Single window clearances as against the multiple layers prevailing now
• Improvement in the power situation so as to have uninterrupted power supply for industries
• Good infrastructure support with tax benefits to newly set up industries
• Fully blasted thrust and support from the government for enhanced exports through more tax incentives and sops to enable us to compete with global players in pricing and thus increase the forex inflow
• Clear and straight-line tax laws
• Single rate tax as against multi-layered taxing from the central and state governments
• Tap undeveloped areas for setting up industry with tax benefits for balanced regional growth
• Provide a big boost to renewable energy and thereby reduce dependence on fossil fuels
• Simplify the outdated government procedures and implement high-speed e-governance
• Increase skill availability through joint industry-academia participation
• Encourage need-based skilled development though participative education between industry and educational institutions, and
• Encourage technology transfer with benefits for the same.