Leoni is a global supplier of wires, optical fibers, cables and cable systems as well as related services for the automotive sector and further industries. The group of companies, is listed on the German MDAX, employs more than 61,000 people in 32 countries and generated consolidated sales of Euro 3.7 billion in 2011. It develops and produces technically sophisticated products from single-core automotive cables through to complete wiring systems along with wires and strands, standardized cables, special cables and cable system assemblies for various industrial markets. It serves the sectors such as automotive, industry and healthcare, communication & infrastructure, electrical appliances, conductors & copper solutions. Keeping in mind the above points team WCI interacted with Mr. Balkrishna Sonar, Managing Director, Leoni Wiring Systems (Pune) Pvt. Ltd. to explore more on the Leoni’s expertise of more than 9 decades, plans for India and global, quality policy etc. Excerpts
Wire & Cable India: Brief us about Leoni’s 9 decades of creating connections, customized solutions and complete systems with perfectly tuned components?
Balkrishna Sonar: The company, founded 95 years ago, is today among the worlds largest and most successful cable manufacturers. The group offers its customers, alongside customized cable solutions, increasingly also complete systems in which all the components are perfectly tuned to one another from the cable itself to the required connectors and mountings. We as a global supplier have the claim to continually improve the customer’s applications. Company distinguishes itself through excellent competencies in cable assembly and has a comprehensive understanding of the conditions of use and technical correlations on the user’s side. Leoni has a product value chain, which is unique in the sector and which offers you valuable synergies and potentials.
WCI: Give us the highlights of your Pune facility, its overall set-up including technology installed, R&D systems etc?
BS: Having successfully secured a production contract to supply diesel engine harnesses to Tata Cummins in India, Leoni has established its first manufacturing plant near Pune. The factory area is currently around 1,300 sqm with the potential to expand to more than 6,000 sqm in support of the planned growth of the business. The management structure of the Pune facility is in place and the headcount was estimated around 240 at the end of 2013. Overall volumes of diesel engine harnesses are expected to increase as India moves towards Euro 4 vehicle emissions standards, resulting in Leoni’s annual sales of double digit millions of Euros by 2014. This new plant and our engineering and customer support in Pune emphasis our position as a leading global supplier of automotive wiring systems and demonstrate Leoni’s commitment to supporting our customers in India.
WCI: Quality is the key for any customer. So what kind of adherence does Leoni follows in its business processes to deliver the best product?
BS: The conception that we have of ourselves in all business actions is shaped by the highest level of quality from the development and production of our products and solutions to sales and services. When speaking of wires, cables, cable systems as well as wiring systems, there is no way around Leoni for more than 90 years now. We create the best connection between our employees and customers, suppliers, the financial community, the media and all other business partners. We offer them connections of different kinds stable and always on the highest level of quality. We therefore succeed in combining a comprehensive commitment to quality with versatile customer benefits. The reliability, certainty and longevity of everything we do, this is the claim we meet as expressed in the slogan “The quality connection”.
WCI: Kindly elaborate on the internationalization plans of Leoni?
BS: Leoni continues to pursue an earnings-oriented strategy of sustained expansion aimed at guaranteeing sales growth together with rising returns. Our activity will in the process, be concentrated on the so called BRIC countries. Our sales projections for China, Russia, India and Brazil as well as the growth market of South Korea altogether amount to about one billion Euros in 2016 accounting 20% share. Leoni is also making progress in India, where we recently succeeded in obtaining another contract with Tata for the supply with harnesses. Our WCS division is also preparing its market entry with special cable products for the automotive, solar and rolling stock sectors. We are also tapping the new solar thermal energy market. The automotive and capital goods industries as well as the BRIC countries and the United States are currently the growth drivers. To be able to perform the newly obtained contracts in terms production capacity, Leoni will increase its capital investment in new plants, machinery and equipment by up to Euro 185 million this year. For the medium term, too, we have ambitious plans setting ourselves a group-wide target for 2016 of sales totaling Euro 5 billion.
WCI: “India is a major growth area for the global automotive market and is therefore strategically important for Leoni.” Take us further to this strategic route?
BS: There are few things that I visualize, firstly the sheer number of cars, albeit small cars by western standards, that are now starting to appear on India’s roads and secondly increasing numbers of cars will inevitably put significant pressure on local governments to improve the road infrastructure because based on which there needs to be significant investment in road infrastructure if the automotive industry is going to successfully persuade the population to switch from two and three wheeled vehicles to four wheel cars. Hence while Leoni focusing on BRIC market, India is strategically very important.
WCI: Your views on the Indian wire & cable market, its opportunities and challenges?
BS: Though production of high-volume commodity products is an important aspect of the industry, many wire and cable manufacturers are moving to more complex and sophisticated products that have specialized high performance characteristics. These products are often jointly engineered with customers and suppliers to meet the demands of particular applications. In this environment, wire and cable manufacturers must be able to:
• Quickly develop, quote, and produce new products for planning and scheduling specific customer specifications.
• Effectively manage the complexity of manufacturing many customized end products for different customers.
• Rapidly and efficiently produce products in both low volume and high.
• Contain costs and effectively utilize expensive capital equipment.
Wire and cable manufacturers that master these key operational capabilities position themselves to increase market share, revenues, and profits.
The wire and cable industry has moved from being a small industry 20 years back to a very large industry over the last decade. Although it is a volume-driven product, it has a lot of quality and technical particulars. Over a period of time, the industry has moved from the unorganized to the organized sector. However, about 35% of this industry is still in the unorganized sector. Requirements like brand and quality perception are the keys in this Rs. 15,000 crore industry. The wire and cable industry predominantly provides challenging opportunities in the field of manufacturing, supply chain, procurement, marketing and HR. This industry is currently undergoing a major change and portends huge opportunity for upcoming professionals and will give them a firsthand experience on subjects like techno-marketing, brand building, six-sigma, just-in-time manufacturing, etc.
The wire and cable industry comprises 40% of the entire electrical industry, which is expected to double in size over the next five years. The government’s emphasis on the power sector reforms and infrastructure will further drive growth. The wire and cable industry will eventually focus on supplying cables for specific applications pertaining to the industry needs. India has a lot of potential in the automotive sector, mining, power, oil and gas, metro railways, cement industry, steel industry and other sectors. Different kinds of cables like extra high voltage cables, elastomer cables, etc, are now being used for special applications such as mining/oil sector, shipbuilding/crane cables/ elevator cables, cables for solar power plants, to harness power for new generation motor vehicles, windmill solutions, security systems and other types of data cables. This field requires professionals to be techno-commercially inclined. Ideally, electrical/mechanical engineers for manufacturing, electrical engineers for EPC related sales for special applications, managers with operations knowledge for implementation of world class manufacturing techniques, managers with knowledge of creative/application based marketing, MBA’s who can use various strengths of companies and make use of adjacent opportunities, as well as fresh graduates who have the zeal to outperform and change customer outlook. The sector also provides tremendous entrepreneurial opportunities in trading, contracting and manufacturing.
