Baba N. Kalyani, heads the flagship US $2.5 billion Kalyani Group. BFL is India’s largest forging manufacturer and exporter of components to the global automotive industry. Not just that, with manufacturing facilities based in India and Europe, it also manufactures various equipment and components for non-automotive industries including aerospace, railways, marine and conventional & non-conventional energy.
The Kalyani Group has joint ventures with global MNCs including Meritor, USA, Carpenter Technology Corporation, USA, Lochpe-Maxion of Brazil and Alstom, France. Under his leadership, Bharat Forge has grown from US $1.3 million in 1972 to about US $1.2 billion now. In an exclusive interview to Business World, Mr Kalyani talks about the prospects ofthe Indian economy under the new leadership and the place enjoyed by the Indian manufacturing in the global order. Excerpts from the interview:
- Can you give an overview of your contribution towards Indo-German business ties and how significant is ‘Bundesverdienstkreuz’ – Germany’s prestigious Order of Merit?
German companies have been in India in manufacturing for over a hundred years and it has been a one-way street. I think, we were the first Indian
company in 2003 to go and set up manufacturing there We were the pioneers and now have four plants including one coming up in Saxony. We have exceller relations with the government and also with companies which has helped us grow our trade there. This, in fac: set the ball rolling for other Indian companies to star looking at Europe as an investment destination.
We feel good about the award and I think it is the contribution of a few thousand people who work in the company. I have had the rare opportunity to lead such s company and I had done my job as a leader and mentc But the heavy lifting and hard work has been done : the employees.
- Can you tell us more about your Saxony plant?
Our new plant in Saxony, in eastern Germany, v. produce light weight aluminium components for car This is a green technology that we have innovated a”: uses very little energy to produce these parts.
It is a unique technology comprising closed-mater; cycle that reduces the Global Warming Potential (GV\: impact of customer products at least by 40% with adder benefits of reduced material weight and costs.
- How have you reached this pinnacle of success?
We decided to make ourselves one ofthe top five in re I world and that could be done with three things. One was that we will provide skills to our people and put tremendous emphasis on training and skilling people in the nineties itself.The second was to drive our business with technology and innovation. The third was to develop our technology ourselves, and not to borrow, because then it becomes a self-driving engine.
- Your website says, “Our strong presence in the passenger car segment is guaranteed by innovative light weight solutions with application of advanced materials and optimised product design.” Please elaborate.
If you look at the trends in automotive-making, you will see that there is a lot of connectivity, a lot of gadgetry but the metal part in the car is getting smaller and is light-weight. We spotted this much earlier and started working on it by two ways. We started using aluminium instead of steel. Second was to reduce the weight of existing components using the desired engineering and technology. So, if you reduce just 10 per cent of the weight of a car, it is a lot of efficiency in terms of fuel efficiency and lower emission levels. The car is greener and less polluting.
- Could you please elaborate CSR initiatives undertaken by your Group?
We have been doing CSR for over twenty odd years now. One of our long-running programmes is with the NGO called Pratham which puts children from disadvantage families into school. We are able to do this for almost
- to 20,000 children in a year and our children are now graduating. Recently we have started building toilets under the Swachch Bharat Abhiyan. We realise the health and education make an impact on people’s lives and this is what matters. A few years back we had also built an Industrial Technical Institute (ITI) which finally became a model ITI.
- What do you think about the government’s initiatives?
After more than three years of prolonged economic slowdown, the Indian economy has started to turn around both cyclically and structurally. The performance of the government in the past ten months has created greater optimism and a heightened sense of expectancy.
Prime Minister Modi has given a very important direction to the industry because every leader in this country in the last 20-30 years has said we need to create more jobs and need to have more manufacturing. But nobody could figure it out how to do it. But Prime Minister Modi has a lot of clarity in terms of manufacturing and ‘Make in India’ vision that he has. He
has a lot of steps clear before him and is driving those with a lot of horsepower in a nation of nearly 1.3 billion people with such different kinds of thinking.
- What do you feel about the ‘Make in India’ campaign?
Bharat Forge has been a flag bearer of ‘Make in India’ since a long time.The big thing is the ‘Make in India’ campaign and the implication is what you can do in India in terms of defence and aerospace. This initiative will give a huge opportunity to the Indian industry but the Indian industry will have to understand that it will have to create that innovation, the skillsets and then that opportunity will come to you.
We still import a huge amount of hardware in defence while a lot of that can be made here. The railway is another similar area. We have recently inaugurated a high-tech locomotive factory for making railway components.
Under ‘Make in India’, the emphasis would now shift towards import substitution. It is perhaps for the first time that the manufacturing sector has received the kind of attention that it deserves both as a catalyst for investments and to generate employment in the country. But our goal should be to not only achieve 25 per cent share in GDP but also position India as a country with the most advanced manufacturing capabilities.
- Would you describe yourself as an industry major that is encouraging SMEs from Indian to invest in Europe.
There is a certain similarity between Indian and German SMEs – most of them are led by technocrat entrepreneurs who are passionate about building strong businesses around a few technical capabilities that they have mastered. Over the last few years, with the Indian economy expanding many Indian SMEs have grown multifold in their operations. Bharat Forge has also leveraged its strength in domestic markets to first promote exports and then acquire assets globally.
One of our major acquisitions abroad was Carl Dan Peddinghaus (CDP), Ennepetal, which even now is the largest among all our European plants. Running plants closer to our customers, in Europe and in particular in Germany has been a pleasant and very enriching experience for us.
We have benefitted immensely by people exchanges and sharing of best practices between our European and Indian manufacturing locations.