Though the auto component industry is going through a rough patch, the Delhi-based Shriram Automotive Products Ltd. (SAPL) of the Shriram Group, started in 1989, has been recording a double-digit growth for the last few years. The company sells all the 5Cs of the engine, i.e., cylinder liners, crankshafts, camshafts, cylinder heads and connecting rods. Incidentally, these are the most critical parts of the engine.
MOTORINDIA caught up with Mr. Rajiv Sachdeva, SAPL President, who was actually the brain behind this successful business model. He said: “SAPL was formed as an offshoot of Shriram Pistons and Rings Ltd. (SRPRL) under the Shriram Group. It was floated by Mr. Deepak Shriram who is now the Chairman of the company. They were already engaged in the manufacture of piston rings and valves (with SRPL), and there was a constant push from the market to go for other products along with the engine parts they (SRPRL) were rolling out. We, at SAPL, started with cylinder liners or big sleeves and decided to sell the products which are suitable for tractor and industrial applications. In 1992, after selling these products in the replacement market, under the brand name Usha/Shriram Pulsar, we added the complete range of cylinder linings. We have now reached a stage where we sell cylinder linings suitable for every single application in the world. That is the USP we have. So we now cater to each and every segment, like two-wheelers, cars, tractors and commercial vehicles (comprising LCVs, MCVs and HCVs). Even though we cater to the entire spectrum of vehicles in the aftermarket, the flagship product still remains cylinder liners which account for nearly 80 pc of our total business.”
Mr. Sachdeva, who joined SRPRL as a trainee, is with the Shriram Group for nearly 32 years. After a seven-year stint with SRPRL, he set up SAPL as a separate entity and has been heading its operations since inception. Under Mr. Sachdeva, SAPL has grown from strength to strength and has crossed the Rs. 100-crore revenue milestone in the last financial year. On April 2, 2014, the company celebrated its Silver Jubilee.
“Last year we grew by 15 pc and this year we should grow by 20 pc. We have closed FY 2013-14 at Rs. 102 crores and this year we should be clocking Rs. 121 crores. We should be able to comfortably double that amount in four years and quadruple it in eight years,” he said.
Unlike other blue-chip auto component firms, SAPL has gone off the beaten track by selling its products in India and abroad without having an in-house manufacturing facility. With the technical assistance of SRPRL, it sources products from small-scale players in States like Gujarat, Karnataka, Tamil Nadu, Delhi, etc.
Mr. Sachdeva further observed: “We select companies which have a good manufacturing base but don’t have the marketing wherewithal to sell them in the market. So we join hands with them and give them the technical know-how to upgrade their products that meet industry standards. We give them financial assistance if required and we do a right handholding with them so that they come up with a product that is acceptable by Shriram. Nearly 80 pc of the products are procured from our captive units. Our motto is that the tiny and small-scale units should survive as an ancillary to the automobile sector. But to ensure that the product quality is not compromised, we always prefer a company which is an OEM supplier with an ISO or TS-9000 certificate.”
It is worth mentioning here that the engine components trader owns nine warehouses and is running a chain of 500 dedicated distributors all over the country. It also exports its product lines to almost 22 countries, and its largest shipments are for Europe, followed by South America, South Africa and North Africa. It is also supplying to one of the Deutz plants and is a 100 per cent supplier to Triumph Motorcycles of the UK.
Business opportunities with new CV players
SAPL is also upbeat about the new players in the country like Scania, Beiqi Foton, Volvo’s UD and Bharat Benz. “As the new product lines get added with new players, we will be the first one to cater to them. This is because we serve the market with product quality which is on par with that of OEMs. Our products already cater to the aftermarket vertical of all the CV players in the country,” affirmed Mr. Sachdeva.
Asked to shed some light on the leading exhibitions the company is associated with, he said: “We participate primarily to build the brand. Auto Show 2014 was better organised (than Auto Expo 2012) as OEMs were separated from the parts manufacturers. The footfalls were more focused than what it used to be earlier. However, the number of foreign delegations was not that huge. So this show needs better popularity as in the case of Automechanika at an international level. Just like last year, we will be participating in Automechanika 2015 on a bigger scale. We do, on an average, 10 shows a year out of which one is in India.”
Almost 40 per cent of SAPL business is accounted for by exports. The credit for the export performance goes to this event (Automechanika). “We have been participating in Automechanika events across the globe. Last year, we participated in Automechanika Mexico, Shanghai, Malaysia and South Africa. And I have left not a single Automechanika event in Germany since then. So for enhancing our exports, Automechanika is the best platform to leverage on,” he added.
Non-automotive domain
As part of its expansion plans, SAPL is also looking to make a strategic foothold in domains with which it has backward linkages with its present portfolio. Confirming such plans, Mr. Sachdeva said: “Since our specialisation has always been engineering which was restricted to castings and forgings, we are certainly looking at opportunities in the non-automotive verticals in the overseas markets. It could be any casting or forging components completely machined and ready for use. The industries could be machine-building, aerospace, railways or aviation.”
Further, SAPL has got the fastest growth award from EEPC for the last nine consecutive years. “Last year, we have done Rs. 40 crores and this year alone we will do Rs. 45 crores,” concluded Mr. Sachdeva.