A subsidiary of German cable connectivity solutions parent LAPP Group, Lapp India Private Limited (LIPL) is striving to lengthen its reach in the country. The company has gone for lean manufacturing methodology to develop manufacturing muscle, introduced innovative products to the market and launched an experience centre – all aimed at tapping the demand in tier I and tier III cities.

Wire & Cable India (WCI) recently interviewed Mr. Marc Jarrault, Managing Director, Lapp India, to get an understanding of Lapp’s operations in India, new developments at Lapp’s Bhopal plant and Bangalore unit, Lapp’s sales and marketing strategy and Lapp’s future targets.

Excerpts.

Marc Jarrault (MJ): According to Indian Electrical and Electronics Manufacturers’ Association (IEEMA), India’s Rs 1.30 lakh crore electrical equipment industry has witnessed a 6 per cent growth in the first six months (H1) of 2013-14 because of a rise in domestic demand. After a weak growth in the first quarter (Q1) of the current fiscal year, mainly on account of growth in exports, the second quarter (Q2) has witnessed a growth of 9.8 per cent in the production of the electrical equipment industry due to a welcome rise in domestic demand. This has led to a moderate growth in H1 of FY ’13-14 as compared to H1 of FY ’12-13.

The outcome of the general elections and the steps taken by the new Government will play a vital role in influencing the future performance of the electrical equipment industry. If the Government addresses the issue of Current Account Deficit and rising inflation, it will eventually play an important role in determining the price of key raw materials affecting the cost of production. Currently, Rupee depreciation has an important inflationary impact giving rise to increasing cost of imports of raw materials, which subsequently puts a pressure on productions costs and profitability. Trade deficit is widening because of costlier imports, worsening the current account deficit. The Government needs to positively boost the development of infrastructure to encourage foreign investment.

Lapp India is definitely optimistic about the performance of the industry in the coming years. There is an increased growth in awareness on the market to differentiate between quality product and counterfeit products. Improved lifestyle, affluence, demand for improved quality, better designed products and understanding of safety standards have made customers’ expectations very clear.

Lapp India is our second largest company, and our Bangalore manufacturing unit is the third largest manufacturing facility of the Lapp Group, producing about 100,000 km of ÖLFLEX® connecting and control cables and insulated single cores each year. In 2012, Lapp India set up its second Indian manufacturing facility at Pilukhedi, Bhopal, and it is currently operational.

At Lapp India we have currently initiated the Performance 2016 programme, which is based on the following pillars:

Sales and marketing effectiveness emphasising strongly on strategic market segmentation and enhancing customer satisfaction by creating effective value proposition.
Reduce costs (LEAN manufacturing): As we lay a strong emphasis on speed, implementing lean manufacturing has helped us to generate products and services for customers within the shortest time. The primary tangible benefit that we have achieved after implementing lean manufacturing is transparency in the shop floor operations. We have implemented the KANBAN system to reduce non-value-added movement of operators from machine to stores and back. KANBAN gives the required material at the right place, at the right time and in right quantities.
Another biggest benefit that we have gained out of lean implementation is that we have been able to introduce the copper control system and it has helped us reduce extra copper consumption in the factory.
Supply Chain Management efficiency: To ensure sales effectiveness our focus has been on enhancing our supply chain management and logistics. Lapp India has been investing extensively in strengthening the dealer network to penetrate deeper into the market.
To achieve the competitive edge in terms of supply chain management efficiency, Lapp India has set up a new warehouse recently in Maharashtra, India. Located strategically in Bhiwandi, a city in the district of Thane, the warehouse, which is a part of a shared facility will cater to Maharashtra, Madhya Pradesh, Chhattisgarh and Gujarat, among other regions in the country. The newly set-up warehouse is strategically located in a region that offers exemption from the local taxes otherwise applicable for the entry of any goods delivered into the area. This tax advantage helps Lapp India cater in a cost-effective manner to existing and potential customers across neighbouring cities such as Pune, Nashik, Baroda and Ahmedabad. Additionally, with proximity to the Mumbai Port, the new warehouse can help Lapp India significantly reduce the duration of any import delivery as compared to the Chennai Port, which was the primary import location earlier. While this is a key benefit for the logistics team of Lapp India, the larger gain here would be for customers, as they will in turn derive the benefit of faster product delivery for orders placed. Further, with the implementation of SAP, the new warehouse will also enable customers to have access to the stock status on a real-time basis, which will help them take relevant purchase-related business decisions.
People Development: We strongly focus on constant training, performance management, recruitment and retention programmes as a part of our efforts to build a rich talent pool.
Innovation: Lapp India’s focus is on supplying innovative end-to-end harnessing solutions to give a constant value add to the services.
Hence, in terms of new products, Lapp Group, recently added the latest innovation to its ÖLFLEX® brand: the ÖLFLEX® HEAT 125 SC, the multitalented single core that not only has a broad temperature range, but also meets the most stringent fire-protection requirements owing to its certified high-flame retardancy and low toxicity in case of fire. The ÖLFLEX® HEAT 125 SC has a temperature range from -55°C to +125°C for fixed installation, and it can even withstand temperatures of up to +145°C for brief periods. In case of fire, the single core guarantees safety in areas with a lot of people, by minimising flame propagation, density of smoke gases and their toxicity. These properties contribute to reducing fire damage to buildings and equipment caused by formation of toxic acids.
Further, in addition to the well-established single core power chain cable ÖLFLEX® FD 90 Lapp presents the Basic-Line equivalent ÖLFLEX® CHAIN 809 SC for light and ordinary duty in power chain applications. The new single core is also suitable for torsion loads, which typically occur in wind turbine generators. Due to an AWM approval in combination with a very small minimum bending radius in terms of fixed installation export-oriented machinery builders can also use this cable for internal wiring of switch cabinets. The ÖLFLEX® CHAIN 809 SC is a single core power chain cable with both insulation and outer jacket in PVC; it is UV resistant, flame retardant and oil resistant.
Additionally, we have introduced the EPIC® SOLAR PL008 and EPIC® SOLAR AL008 to our wide range of solutions for solar industry. The latest innovation EPIC® SOLAR PL008 and EPIC® SOLAR AL008 has benefits of cost-effective plastic junction box. These cables are extremely resistant and durable. The aluminium housing is an excellent cooling element for the diodes and significantly increases their lifetime.

WCI: What is your action plan for the region?

MJ: We aim to further strengthen our position in the control cables segment and penetrate deeper into the market. Also, to help cater efficiently to increasing demands from customers in the country, we are strengthening our base in the single core wires segment as well. We have been focusing on establishing the single core business for the building segment and control cabinet application.

WCI: How has been the performance of Lapp’s Bhopal plant?

MJ: In 2012, Lapp India set up its second Indian manufacturing facility in Pilukhedi, Bhopal, which is helping us strengthen our base in the single core wires segment as well as cater efficiently to growing customer demands in India.

Further, our state-of-the-art infrastructure in manufacturing facilities and adherence to the highest safety standards has earned our manufacturing plant in Bhopal an ISO 9001: 2008 certification on March 22, 2013, recommended by TUV India, VDE and IEC certification for HO5-VK and HO7-VK for a range up to 6 sq. mm. and IS 694 extension certification for producing FRLS wires up to 6 sq. mm.

WCI: What new developments are taking place at Lapp’s Bangalore unit?

MJ: Lapp India’s Bangalore plant has been awarded IEC certification for HO5-VK and HO7-VK for a range up to 240 sq. mm.

WCI: Please describe the sales model used by Lapp for its building wires. How do you ensure that your product reaches even the remotest areas?

MJ: Lapp India operates through four regional marketing units in Delhi, Kolkata, Mumbai and Bangalore, 23 sales offices and a strong network of 100-plus dealers throughout the country. Additionally, we have “e-KHOJ” bringing the “Dealer Connect” portal for our customers and employees where we provide real-time information on the following:

Tracking order status
Maintaining quotations
Creating sales order
Viewing open orders pending for delivery
Document flow
Printing order
View shipment details and tracking number
Product pricing
Stock
Invoice wise outstanding

To achieve the long-term goals that we have set for our business, we are investing extensively in distribution. Lapp India intends to focus on creating a wide retail presence in the building segment. We are therefore associating with new retailers and distributors to achieve the milestone. We are also strengthening our customer care through our contact centres to fully understand our customers’ requirements.

WCI: How does Lapp educate its customers (institutional and retail) on right wires?

MJ: Lapp India has been organising product/application seminars for panel builders and electrical retailers to create an awareness of innovative cabling solutions for buildings, control cabinet application, automation, robotics railways, etc. At the seminar, we showcase new products, new applications, introducing the entire product range for the application. Also, seminar attendees get the opportunity to touch and feel the product.

Also, our recently launched Lapp Experience Centre showcases extensive range of products that we offer to help cater to more than twenty different industry verticals. This centre provides customers with an opportunity to touch and feel the entire product portfolio, enabling us to enhance our customers’ buying experience.

WCI: The Indian economy is thriving and India is the future market of connectivity solutions industry. Most of the international players have therefore come to this turf. What are your thoughts on how Lapp will play its role?

MJ: To win a competitive edge over the players in the field, we focus on delivering unbeatable quality and our excellent logistics enables supplies to reach customers in the shortest time. Further, as tier II and tier III cities have been developing vigorously, we are focusing on exploring the market potential in these regions by educating buyers on the significance of quality products.

We have embarked on augmenting our customer service and the way we respond to customer requirements. In line with our guiding principles of being customer-centric, we are focusing on our customers’ connectivity requirements to improve efficiency of operations. Our recently launched Lapp Experience Centre showcases our extensive range of products, and we have also introduced a single hotline for customers to get in touch with us.

The Lapp Group has always backed research and development; our research and development and innovation centres in Europe have been developing new compounds, deploying new raw materials and looking at generating more efficient and advanced ways of transmitting energy. Our products are known for their unbeatable quality; we never compromise on raw material inputs and ensure that when our customers buy a product, they get peace of mind; and the strong trust value we have built with the customers helps us gain a competitive edge.

To achieve our long-term business goals, we are investing extensively in distribution. Lapp India has been concentrating on creating a wide retail presence in the building and panel building segment. We are appointing new retailers and distributors to reach this milestone.

WCI: You have recently joined Lapp India as Managing Director. Kindly share your observations on the Indian wire and cable industry and Lapp’s operations in India.