“We are almost tripling our capacity in bead wire. Today, we are making 950 tonnes a month; this would be scaled up to 2500 tonnes in next 6 months time.”
Aradhya Steel, incorporated in 1989, is manufacturer of specialty steel wire and ropes catering to the automotive tyre, cable, spring, ACSR and rope industries in India. It is located in Davangere, Karnataka which is in the heart of Southern India where the significant majority of the tyre industry is located.
“We have 200 years of roots in Davangere. My grandfather had a vision that all his children should contribute back to society and, therefore, he ensured that every one of his eleven children was educated in the best of institutions and made to contribute to our society in their respective professions.” says Mr. Avinash Aradhya, Managing Director, Aradhya Steel Pvt. Ltd. in an exchange with Wire & Cable India magazine. “It was similar with my parents who ensured I had the best education with a degree in Mechanical & Electrical Engineering from Purdue University, USA and yet inspired me to return and to continue serving the society by providing job opportunities and commit to run a socially responsible business.”
Beginning Tipped With Vision
Armed with family’s ideals of social service, the steel wire business was started by Mr. Mallok Aradhya, Chairman and father of Mr. Avinash Aradhya. He was a first generation entrepreneur and a Mechanical Engineer.
“He started making hardware products initially and moved into making nails afterwards. Then, he backward integrated into wires making MS wires. From there, he got into making concrete pipes and poles. Subsequently, he ventured into making high carbon wires, galvanized wires, fine and super fine high carbon wires and wire ropes,” avers Mr. Aradhya. That’s steady and robust diversification of portfolio, of course.
Mr. Dilip Deshmukh, Jt. Managing Director, Aradhya Steel Pvt. Ltd. joined the Board of Aradhya Steel Pvt. Ltd. in 2006. As a Post Graduate Metallurgist from Indian Institute of Technology, Mumbai, he was instrumental in developing many innovative products, processes and plants across the country.
Commitment to Quality: Tyre Bead Wire
Mr. Aradhya says that though the prime focus was to contribute to the society by providing jobs, the adherence to quality and creation of high value products were never compromised; in fact, it stood at the forefront of every enterprise. “We have been moving and scaling up with that spirit,” quips Mr. Aradhya.
“The only way for us to survive was to understand customer needs and meet their demands of quality, cost, delivery and service,” says Mr. Aradhya. “We kept refining and investing in those areas and we are fortunate to have met Mr. Deshmukh at that time as he had ample experience in producing various types of wires.”
Production Expansion
Aradhya Steel was incorporated in 1989 with Unit-1 producing high carbon fine wires, wire ropes, and other products. In 2006, the new plant of Aradhya Steel, Unit-2, was started where production of high carbon steel wires began and later on, in 2008, tyre bead wire was also launched from here.
Aradhya Steel is in the process of a mega expansion in almost its entire product category, especially tyre bead wire. The company’s overall production for tyre bead wire and other steel wire products stands at 26,000 tonnes annually, which is slated to be augmented to a level of 60,000 tonnes annually by mid FY 2015-2016.
“We are almost tripling our capacity in bead wire. Today, we are making 950 tonnes a month; this would be scaled up to 2500 tonnes in next 6 months time,” declares Mr. Deshmukh.
This is a huge capacity expansion arousing a question whether market is ready to absorb the produce. On being asked if there has been due feasibility study of the prevailing market situation in wire and cable with respect to the aimed production augmentation, Mr. Deshmukh says, “Yes, we have done enough study of current market situation as well as the situation that may be arising in future. The expansion is on at the moment. We have had already partial increase in the quantity. Going forward, we would reach to 2500 tonnes per month in next 6 months time.”
“The capacity would be ready in April 2015, but we would ramp it up gradually,” quips Mr. Aradhya.
“We would be increasing our capacity in other products also. Not as much as tripling the produce as we are doing in tyre bead wire segment, the capacity expansion will take place in all the products in our bouquet,” states Mr. Deshmukh.
In House Technology Development
When we put the new plant in 2006, we were the first in the country to have inline strand pickling and without a batch pickling plant as backup! We put up the fastest bronze plating line! So now in 2015, we continue to innovate and invest in state-of-the-art drawing and wire processing technology indicates Mr. Deshmukh. “We have only indigenous technology being designed and developed by us. We are not taking anything from abroad or within India because we are now investing for the future and the plant must stay relevant for the next two decades.”
He adds, “We are developing our own technology, wire machinery, processing lines, etc. Everything is our own design and development. In the first phase, we fetched some wire drawing machines from Europe and China. But, what we realized that they were unable to meet our expectations for machine performance and costs for the capacity expansion. So, we decided to do it at our own, right from design to development of machines within our budget.”
Combating Demand Slowdown
Wire and cable industry today is marred by slowdown in demand and we often come across proverbs like a bit of oversupply in the market. Mr. Deshmukh, though, sounds very normal about it. “I have, in my working life time of 35 years, seen many ups and downs in the market. This is 4th or 5th cycle of slowdown. Each time, the market has bounced back and I am sure the market will start looking up in a few months time.”
On strategy to overcome this slowdown and be able to sell the produce of the expansion in the market, he says, “ As far as we are concerned, when we are talking about the expansion in bead wire and other products, this is with the confidence that we are going to give the best quality to our customers. Quality, service and delivery are key components of our strategy to combat slowdown. So with this, we foresee that there should not be any problem in selling our products-the quantities we are looking for. I feel the market would start looking up in 2-4 months time.”
Whether Aradhya Steel is envisaging increase in its export capacity after this expansion drive, Mr. Aradhya says, “Yes. Though we don’t have much capacity to export, we intend to export about 20% of our enhanced capacity.”
Challenges and Opportunities
Mr. Deshmukh feels the low technology infusion is the biggest hurdle for the growth of wire and cable industry in India. “What I have seen, in last 35 years, this industry, which was nascent in 1970s and ’80s, has grown progressively for better. But, there is still a large scope for a cultural mindset change in terms of quality consciousness and willingness to invest in technology.”
He adds, “In today’s customer driven market, even if you undercut the prices, people would not choose to buy from you unless you have the right quality. Tyre industry is one such example, where no one will compromise with quality. Customers want zero defect product quality of every millimeter of wire supplied.”
As for opportunities, the Company eyes the impending growth in automobile industry as growth booster to wire and cable industry. “The Population is expected to increase to 11 Billion people in this century with an increase of 4 billion people in Asia alone. Therefore, as people strive for a better quality of life, the demand for cycles, two-wheelers, cars, buses and trucks will only grow exponentially driving the growth in the automotive business in Asia. Though the demand has been low in the last two years, good times are ahead for automobile sector and with them for the wire industry too!”
