SABO HEMA Indo-Italian quest for excellence
The Indian automotive sector has seen many joint ventures between multinational majors and home-grown companies, with the aim of deriving synergies between the formers’ advanced technology capabilities and the latters’ strong presence in, and understanding of the local market in terms of conditions, product requirements, customer expectations, etc. While there are a number of joint ventures in the industry, not all of them go the distance, while those which are successful and profitable are still smaller in number. SABO Hema Automotive Pvt. Ltd. is one classic example of a strong and mutually-enriching JV in the auto component space.
SABO Hema Automotive Ltd., a 50:50 JV between Roberto Nuti S.p.a, Italy, and Hema Engineering Industries Ltd. was set up with the sole aim of delivering world-class products and solutions at competitive prices in India and other emerging markets. More particularly, the objective of the JV was to consolidate the SABO Group with a qualified presence in very important areas and with excellent prospects for the development of passenger and heavy transports in markets such as India and other Asian countries, in addition to Australia, Africa and other global markets.
SABO Hema is a perfect Italian-style company, which, since inception, has been committed to putting highly skilled workers in the best possible working atmosphere, respecting the people and their cultural and religious traditions. Its products which include shock absorbers for a wide range of vehicles such as trucks, trailers and buses are designed in Italy and manufactured in different locations across the globe with the know-how, quality and customer care that have always characterized SABO products. Sabo Hema is serving its customers with genuine Italian products made at Indian facilities.
In order to take this JV up in the global pecking order, Mr. S.N. Ahmed, a Mechanical Engineer and an industry veteran, was roped in to head the JV operations as CEO. With over 30 years of experience in various skills of the shock absorber industry, the CEO paints a very optimistic future for the domestic CV industry. He states: “The aim of this new partnership is to produce various types of shock absorbers for passenger and commercial vehicles at the new plant in Gurgaon. The ultimate goal was a worldwide integration between the two different production plants (Italy and India), co-ordinated by the Italy headquarters. The purpose of this tie-up is to offer a complete, safe and competitive solution to customers, for both OEM and aftermarket.”
Partners in progress
The SABO Hema venture was established with the idea offering proven products and technologies to customers in the Indian CV market. The European half of the JV, SABO, has established itself as a reputed brand globally, driven by sound technology and worldwide presence, while the Indian partner, Hema, has a deep understanding of the domestic market through years of association with local OEMs and with manufacturing footprint spread across the country.
The Bologna-based Roberto Nuti S.p.a. is a 50 million euro revenue group manufacturing SABO brand shock absorbers and suspension parts, including air bellows, with over four decades of experience and expertise in the field. It is a major supplier of shock absorbers and suspension parts in the aftermarket with operations in over 90 countries. It has been delivering products directly to some marquee OEMs which are adaptable to a wide range of applications suitable for Iveco, MAN, Volvo, Mercedes Benz, Isuzu, Renault, Scania and DAF.
At Roberto Nuti, technology is a real culture and a tradition that keeps abreast of the changing times and progress. Each product built by companies of the Roberto Group bears testimony to this tradition, an all-Italian ability to design and build mechanical components of stunning technological value, maintaining special attention to customer satisfaction. Roberto Nuti S.p.a also holds a prestigious brand Mupo that produces suspensions for sport bikes and racing from 2010, based in Castel Guelfo, near Bologna.
Hema Engineering Industries Ltd. is currently a Rs. 750-crore revenue group. Established in 1984, Hema Engineering has vast experience of 30 years in the design and mass production of safety and precision sheet metal, tubular fabricated components with all types of surface treatment solutions catering to major Indian OEMs like Hero MotoCorp (erstwhile HHML), TVS and Royal Enfield, Terex, Metso, Daimler India, International Tractors Ltd., among others. The group has eight manufacturing facilities at seven different locations spread across the country. It also has a design centre in Pune which has been recognized by the Government as a certified R&D centre.
Hema Engineering manufactures a wide range of sheet metal and tubular components like motorcycle frames, fuel tanks, swing arms, exhaust systems, etc., mainly catering to the two-wheeler segment, and operator cabins, axles, chassis, and conveyor frames mainly catering to the heavy engineering Industry. The company is hopeful of reaching a turnover of Rs. 1,000 crores by 2016-17.
Tapping the potential
SABO Hema has set up a facility in Gurgaon, with an installed annual capacity of 500,000 shock absorbers for commercial vehicles, at an investment of Rs. 15 crores. The company has been studying the Indian market for long and has identified huge potential for its products, given the massive growth the country is likely to witness in the truck, bus and trailer segments. The company is confident of being very successful in the long term as it has the right mix of critical aspects such as product quality, global technology and local market understanding, among other factors.
Says Mr. Chandresh Jajoo, Managing Director, Hema Engineering: “The Indian CV industry is going through a transformation. We felt that the CVs which use regular suspension with leaf springs are moving into long-term durable suspension systems. SABO is one of the leading shock absorber brands in Europe and is supplied to various OEMs and a large part of the CV aftermarket across the globe. We were fortunate to tie up with SABO and get them to India to serve the growing needs of the CV segment.”
“The Indian CV market has its role in our global scheme of things. We today enjoy technology superiority that helps us to compete in global markets, especially in Asian and Middle Eastern markets”, adds Mr. Massimo Nuti, CEO, SABO Italy.
Mr. Ahmed points out: “With global truck and trailer manufacturers identifying India as the third largest market for growth, we have seen different MNCs like Volvo, Hino, MAN, Isuzu, Scania, Daimler, DAF, BPW, etc., setting up manufacturing footprint and marketing base in India. In addition, the domestic majors have also tightened up their belt. SABO Hema is ready for the growth phase and are continuously investing to serve these vehicles, both through direct OEM supply and in the aftermarket.”
Growing penetration
Despite operating in a segment which includes strong global competitors, SABO Hema is confident of supplying directly to major OEMs in the Indian market in the near future. Says Mr. Ahmed: “We made a breakthrough with OEMs in India this year. We are definitely looking at enhanced business opportunities with new players coming in. We have developed cabin shocks and steering dampers for both local and overseas markets and are keen on more clients and projects. In the domestic market, we are looking at all the big OEMs in the direct market.”
Though the first-ever air-springs were fitted on trailers globally, the Indian market has taken a different approach, with buses being the largest consumers among heavy vehicles, followed by trucks and trailers which have a lot of catching up to do. Despite a vast majority of heavy vehicles running on leaf spring suspensions even today, the migration towards air-suspensions has already begun and is on the rise, buoyed by schemes such as JnNurm for city buses. For SABO Hema, the technology shift comes as a welcome move.
“Our target group, at present, are the fleet operators who are switching from leaf springs based suspension to air springs-based suspension. This is because the end users are looking for comfort and durability. They want their products to be delivered faster but in a safer manner and are going for hi-end products. There is a transition happening. When people get used to good quality, they are ready to pay a higher price but they want that quality,” asserts Mr. Ahmed.
Training is one of the key elements for the success of SABO Hema. The company has gone in for various trainings of its manpower matching the global standards and is also investing in its R&D base to meet immediate needs and provide its customers the same level of services across the globe, in terms of design, manufacturing, quality and delivery.
“SABO products are already tested and proven through various global extreme environments since last three decades. We already have proven part numbers for all MNCs which have entered India, at least in the CV segment. We believe that our suppliers and good quality components contribute a lot to product quality, which is why a very clean and healthy atmosphere is a major priority at SABO Hema. We practise all compliances to meet ISO/TS 16949-2009, ISO 14001-2004 & ISO 18001-2007 standards”, shares the CEO.
Future plans
Even though its products are well accepted in the market, SABO-Hema is not resting on its laurels. “The commercial vehicle market in India is growing at a tremendous pace, and to meet this demand, we plan to set up another manufacturing facility and are scouting for a good location. The new facility is expected to be operational by 2016/17,” reveals Mr. Jajoo.
At present, a major portion of the company’s output is earmarked for export. Barring Europe, Australia is one of the key markets looked after by SABO Hema directly, as it eyes expanding into other regions as well. “We are looking at long-term tie-ups with distributors and OEMs in non-European countries. We will be tying up with some companies in the US and Australia and are in an advanced stage of discussions”, notes the CEO.
Besides commercial vehicles, plans are afoot at SABO Hema to diversify into passenger vehicle segments comprising utility vehicles and premium cars. “We are actively exploring new segments. Passenger cars might be considered only in the premium segments, while two-wheeler shock absorbers could also not be ruled out. Having said that, the CV segment is itself a very big market and we are betting big on that,” adds Mr. Jajoo.
The JV company clocked a turnover of Rs. 24 crores in the last fiscal. The figure is expected to touch Rs. 30 crores in the current financial year, the target set is Rs. 100 crores by FY17-18.
Outlining the key credentials of the JV, Mr. Ahmed concludes: “We believe that both the partner companies are well positioned to manage the integration of systems, deliver international quality products and develop a brand image that can create value among CV manufacturers. The JV will prove to put forward safe and competitive offerings to both OEM and aftermarket customers. Based on our extensive marketing and operating activities, we aim to capture 25 per cent of the components market in the country.”