In 2009, Kaizen CFS had come across an interesting material known as high tensile steel which has proved the cornerstone for the company’s success today. After an intense study on the nature of the steel, Kaizen re-engineered and re-designed products for better performance and soon found it to be very well acceptable in the market. Ever since, it has strongly focused on optimally designed products with various combinations of steel used, and thus won the confidence of its customers. Repeat orders flowed in, and then there was no looking back for the company. Mr. Raghav Saraf, Director, Kaizen CFS, talks in detail to MOTORINDIA in an informal chat.
The higher the strength of steel, the lesser the thickness of the material steel required for building a commercial vehicle body, thereby reducing the unladen weight of the vehicle to carry more payload.
In the CV industry, the factor which is a key growth-driver is weight. The lower the weight, the more efficient is the vehicle and hence the faster the return on investment. With stringent laws being enforced to curb the menace of overloading, Indian fleet operators have no choice but to look at reducing the tare weight of the vehicle to maintain profits.
In order to address this serious issue, Kaizen has carried out extensive research in the tip-trailer segment which led to a weight reduction by about 1.5 tonnes, and it is currently working on a weight reduction of 2.5 tonnes to enable trucks and trailers to carry higher payloads.
Yet another aspect the company is focused on is the higher performance of the steel product which has twice the strength of BSK 46, the highest grade of steel manufactured in India. An interesting fact is that a 3 mm S700 MC grade of Kaizen steel can well compete with a 4 mm BSK 46 grade steel, thus offering a unique benefit to customers.
For the commercial vehicle body building market, Kaizen has developed uses for wear-resistant grades of steel which are very cost-effective. Samples of the new product have been distributed to leading body-builders in the country with results turning out to be highly satisfactory. It deals with wear-resistant products of steel grades ranging from 300 BHN to 450 BHN, whereas in high tensile steel, it deals with grades like S460 MC, S500, QSTE 550, S600, S690 QL, S700 MC, S960, and many more. It also offers the weather and corrosion-resistant grade steel, which is best suited for the flat-bed trailers used in marine applications and containers in cargo-carriers.
The company stocks imported raw material in huge quantities at its stockyard in Chennai and considers ready availability as one of its biggest advantages. Next to Europe as the prime location for steel suppliers, Kaizen is scouting for suppliers in Japan and the US too. It sources close to 95 per cent of the raw material from European vendors while the rest comes from other countries.
Kaizen designs its products at its own testing lab in Chennai, while actual prototyping takes place at the customers’ R&D centre to meet the customization requirements. Initially, it began processing around 120 tonnes of steel per month, but with rising customer demand, the monthly volume has surged to 250-300 tonnes.
The company provides its customers a number of customized solutions like cut-to-length and cut-to-width facilities, as also forms, angles and channels as per customer requirements. It has designed and developed certain cold form channels with higher strength and lesser thickness, weighing just about 6 kg/metre as a replacement to a normal hot-rolled channel weighing almost 10 kg/metre. These channels ensured a significant weight reduction of 40 per cent when compared to conventional channels in the market. Kaizen has a tie-up with leading educational institutions in the State like IIT Madras and Anna University where its components are tested and certified.
Geographically, Pune and Mumbai have been major markets for the company, as it looks to expand its marketing bases in Pune, Bangalore and up North. Says Mr. Raghav: “Currently, we have an ambition of becoming the leading specialized steel supplier and are investing a lot into R&D to help meet growing customer demands. With standardization being a very important factor in the automotive industry today, our next plan of action is to standardize our designs and thereby the body-building process. We are planning to make CKD and SKD kits containing the entire set of components required to make different commercial vehicle bodies. The concept of standard bodies would be immensely fruitful to the body builders who will have a standard design in addition to the assurance of good vehicle performance”.
Using higher grades of imported steel, the company develops various products superior to the conventional existing items as per the customized requirements, assuring better productivity still staying very cost competitive.
The company is currently working with crushing equipment manufacturers in the mining segment where there is greater use of high-tensile steel. These kind of specialized steel finds uses in various applications like cranes, automotive components, mining equipments, construction equipments, industrial fans and blowers, liner plates, material handling attachments and hydraulic lifts.
On the company’s diversification plans, Mr. Raghav says: “We entered the CV segment because we found a huge opportunity when the government had laid norms on legal load carrying. So once we reach the targeted level in this segment, we would diversify into newer areas. Down the line, we want to be a manufacturer, rather than a supplier in whichever segment we work. Presently, in the manufacturing division, we are looking at manufacturing tippers and trailers components and fine blanked components for the automotive industry.”
Although Kaizen has diversified into supplying steel in other segments like mining, containers, cranes, industrial equipments, automotive components, etc., the commercial vehicle segment still makes up around 80 per cent of its overall business. In addition, the company is keen on supplying its processed steel for axle manufacturing, which demands high-tensile steel with high fatigue-resistant property. It is currently working on an R&D program to develop the same.
Kaizen is aggressively working on improving its brand visibility and plans to put up a number of roadshows and conferences in key truck markets like Namakkal and also in the mining areas. Highlighting the importance of brand building, he adds: “Today we don’t work towards just selling of material, we work towards branding. We are working towards marketing in such a way that people know the company by name, rather than the product because we don’t want to deal with just one product”.
With the unstinted support of its customers, Kaizen had crossed a turnover of Rs. 30 crores in 2010-11, its first full year of operations, and generated revenue of Rs. 35 crores in the subsequent year. For FY 2012-13, it is targeting a growth of about 10 to 12 per cent, with a turnover of Rs. 40 crores. With the ongoing R&D activities, the company is sure to have a widened product portfolio and hopes to double its volumes in the next couple of years.
With the fully-built-vehicle (FBV) concept gaining momentum in India and with higher payload capacity a prime deciding factor today, Kaizen certainly has a good opportunity to expand its presence and gain a major share in the OEM segment.
“I was happy to know when one of the trailers developed with our steel and design could withstand an overload of 80 to 90 tonnes of granite on a regular basis. Such is the strength of our product.”
– Mr. Raghav Saraf