In a focused chat with M Devarajan, Whole-Time Director, Amalgamations REPCO, N Balasubramanian learns that the company has exceeded its expectations in the last financial year despite COVID pandemic’s negative impact on businesses in general. Responsible for clutch and ring gear divisions of the company, Devarajan has aggressive plans to revamp their pan-India distribution channels and sales network, and is keen to tap unexplored export markets besides strengthening their presence in the aftermarket further. A report.
In 1967, Amalgamations Group entered into a technical and financial collaboration with Australia-based Repco Limited and formed Amalgamations REPCO (AMREP). In 1970, the new entity began manufacturing clutch assemblies and components. Since then, the company has been catering primarily to the automotive segment with specific focus on tractors and commercial vehicles. In 2004, the company began manufacturing flywheel starter ring gears. Today, the ring gear and clutch divisions of the company enjoy robust business catering to OEMs, and aftermarket besides serving STUs. Unlike other business houses who may have focused on cost cutting measures during the COVID pandemic, AMREP went bold and invested Rs. 10 crores last year to modernize the ring gear division by equipping it with CNC machines and enhancing the manpower.
M Devarajan, Whole-Time Director, AMREP shares: “At the start of the COVID pandemic, one of the major challenges was that of supply chain and logistics. Hence, we focused on improving our efficiencies in supply chain, manpower, productivity and on reducing costs. Since April 2021, our business was on the upswing though we experienced a slight dip in May. We are hoping for the rural market to look up soon, since at the peak of COVID last year the tractor dealerships were shut. Yet, compared to 2020, our productivity has been higher this year.”
Flagship Divisions
AMREP boasts of a state-of-the-art manufacturing plant in Madhavaram, Chennai which is equipped with advanced machinery. The plant is ably supported by their in-house design and development divisions. The company has carefully nurtured itself into a reliable supplier of a range of products including clutch driven plate, clutch cover assemblies – both conventional coil spring and diaphragm spring types, and flywheel starter ring gears among others.
Devarajan says: “We mainly cater ring gears to major automotive manufacturers and 20-30% of our ring gear and clutch exports are to countries including Japan, Italy, France, USA, Spain, Turkey, Mexico, Croatia, Serbia, Sri Lanka and United Kingdom among others. As for the clutch division, we have focused on improvement plans and processes, which has helped us in higher sales compared to even 2019-20. We service CV and tractor segments with our clutch products besides exporting and catering to the aftermarket. We are looking at 15-20% more sales in 2021 compared to the last 2 years. This year, based on our customer feedback and requirements, we are targeting around 30% more in manufacturing in both the products.”
Today, AMREP is a single source supplier to 2 major Indian OEMs for the ring gears and is on its way to become the same for a major tractor manufacturer for its clutch products.
Upcoming Technology
AMREP has a strong brand presence in finger type clutch and plans to build up capacity for making diaphragm and double clutch. The company is pegging its hopes on catering to more Indian OEMs in the next few years.
Talking about the technology aspect, Devarajan adds: “We are looking at developing a few critical clutch parts which are of advanced technology. Last year, we tied up with a strategic source partner to develop some of the critical components for clutch wherein we will provide the design and the tooling, and they will manufacture and supply them to us. Specifically for tractors, soon we will see single diaphragm and double clutch coming more into use. We are investing in design software this year, and clutch automatic assembly section. Another critical area is casting and we have many suppliers, but we have tied up with a strategic partner whom we will support technically and also financially.”
He further shares on ring gears: “The accuracy of the tooth in the ring gear is critical, and noise less gears are becoming more of a norm. Currently, passenger vehicles are using these and, in the future, tractors will do too. We are ready with the technology and when the volume goes up, we only need to duplicate the lines. We are prepared with the upcoming customer needs in the next 3-4 years in the ring gear product segment.”
Additionally, as NVH is a focus point for OEMs, AMREP offers various flywheel dampers as part of their product range to cater to them readily. Presently, AMREP is exporting flywheel dampers to a major OEM in USA and is in discussions with multiple Indian and European tractor manufactures too.
Business Boosters
The clutch division contributes to about 70% of the AMREP business, while the ring gear as a component brings in the remaining 30% business. Of this, 90% of the ring gear business comes from OEMs. Then, in the clutch products, 70% business comes from the OEMs and the remaining 30% gets generated from the aftermarket, exports and OE spares.
AMREP has a well-planned strategy that will smoothen the way to tripling the company’s turnover in the next couple of years.
Devarajan explains: “We are focusing on the aftermarket keenly now and are expanding our customer base for exports too. In the next couple of years, we have a plan to take the business to Rs. 500 crores. We are also working on forming strategic partnerships to supply our specialty and advanced clutch products.”
Market Acceptance
AMREP brand and the products already enjoy high acceptance in the market. Devarajan and his team are focusing on building further on it taking advantage of the positive market sentiment and hence, the reason for revamping the aftermarket business.
He shares: “The revamping of our aftermarket business has been underway for the last one year. We have about 130 dealers spread across India and we are restructuring the network now. We are working on upgrading our day-to-day processes, and also empowering our manpower. We are focusing on enhancing and expanding our existing product range too as we wish to cater to newer vehicle segments. We are training our sales executives in improving their capabilities.” AMREP is proud of delivering quality at economical cost while fulfilling the customer needs by predicting them accurately. And that is where the strength of the company lies and hence is poised to grow by leaps and bounds in the near future!