Just as the modest office and the functional work floor gradually reveal a massive plant area upon exploration, much the same way the partner-owners Mr. B. Gopala Reddy and Mr. S.P. Vel Murugan, seem to like keeping a low profile while working wonders with body fabrication for big names in the automotive sector. We meet the partners based in Bengaluru to find out how Aditya Auto Engineering Pvt. Ltd. is taking the body fabrication industry quietly by storm.
Quietude is what meets you at the office of Mr. B. Gopala Reddy and Mr. S.P. Vel Murugan, Managing Director and Director – Operations, respectively – joint owners of Aditya Auto Engineering Pvt. Ltd. (AAEPL). It is easy to find out that they believe in action rather than in words. The duo believe in giving their customers solutions made with the lightest of material and give quality a top priority at all times.
First steps
“It was in 2009 that Mr. Vel Murugan and I thought of starting AAEPL with an aim to do business with OEMs. I take care of commercials, administration and marketing while he looks at operations and technical requirement of the customers,” introduces Mr. Reddy.
In another year or so, AAEPL got into real business when it started making trailers. Mr. Reddy shares: “Our first client was Mcnally Sayaji Engineering Ltd. We did general fabrication for Rs. 99 lakhs in our first financial year. We got the project in January 2010 and closed it in three months. And, our first OEM business came with Kamaz Motors in 2013, and we have given them 120 vehicles.”
The dip in fabrication business that was witnessed in the last couple of years, mainly due to the ban on mining, impacted them too. Lack of demand for new vehicles, and only body replacement orders, cut their business down to 50 per cent. Mr. Reddy says: “Now we are seeing a jump because mining has started and infrastructure development projects taking push. So we are foreseeing new orders from customers.”
Upward trend in the current financial year would be a great fillip for AAEPL which recorded Rs. 14 crores in 2010-2011, Rs. 30.65 crores in 2011-12, then dipping to Rs. 28.90 crores in 2012-13, further dipping to Rs. 24.27 crores in 2013-14 and getting back to track by closing with Rs. 28 crores in 2014-15.
The bouquet
AAEPL’s product bouquet boasts of manufacturing tippers starting from 5-6 m3 to 32 m3, flatbed trailers from minimum 22 feet to 40 feet to carry steel, then flatbeds measuring 28 and 32 feet for carrying cement bags, truck bulkers measuring from 19 to 32 m3 for cement and fly-ash application, to trailer bulkers from 26 to 42 m3.
Mr. Reddy says: “We can fabricate up to 56 m3. But with regulations, people are opting for 36 m3 maximum. Our flagship product is 46 m3 tipper trailers that we have given to Krishnapatnam Port with Volvo Tractors in 2011. Till date there has been no complaint.”
With a built-up area of about 55,000 sq. ft., AAEPL’s total plant measuring up to 1,25,000 sq. ft. has an installed capacity of 300 tippers per month though the current output is only half of it, including the long-standing contract with Hyva. Mr. Reddy lets us in on: “The trend is changing. Now rock bodies are being sought mainly for the mining sector. And manufacturing one rock body is equivalent to making three box bodies. Talks are going on with Hyva, so we are hoping for an increase of at least 100 Rock bodies a month. When that comes through and, combined with our regular production, we can touch almost 80 per cent of our installed capacity.”
First love
Hyva being their first love, the partners feel they owe their full attention to the company, at least for now. Mr. Reddy reminisces: “I joined Hyva India when it was started in Attibele Industrial Area, Bangalore, in 2001-02. Mr. Vel Murugan joined later and became my colleague there. When I left Hyva in 2009, I was there as Senior Manager – Materials. We feel comfortable doing business with Hyva. They have always extended support to us like it is their own facility.”
With burgeoning market and more opportunities, can they afford to do so? Mr. Reddy answers: “For anything new demands, We are ready to expand my capacity. Also, now that GST is going to happen, it will be positive. Secondly, when product codification happens, the unorganized sector will be phased out. Only those who are organized and can adhere to standardization will be in business.
The unorganized sector, in other words roadside fabricators, has been eating into the pie by catering to the needs of transporters informally, including making vehicles with illegal dimensions. Mr. Reddy agrees: “That was earlier, but now even they have started sticking to the regulations. The reason is the customers have started understanding that illegal dimensions are impacting them negatively like increased wear and tear of tyres and reduced fuel mileage. So, gradually the customers have started asking the body builders to look for ways to reduce the body and bed weight.”
Paring down
Clearly, the crucial issue of shedding weight to compensate for the customers’ need to accommodate more cargo depends almost entirely on the design aspect. “Since we do not have the expertise to work on dynamic designs for a special product like low bed trailers we are outsourcing to Chennai. For bulkers, we have a joint venture with designers & Manufacturer M/s. Vasant Fabricators in Ahmadabad. They give us the complete design technology. We have given almost 100 to 120 bulkers to the market in the last 3-4 years and have not faced any problem till date. Since, weight reduction proposals have come into the market; their modified designs have shed almost 1000-1500 kgs per bulker. In 2011, NECC Roadways, Hosapet wanted to reduce weight on the 30 trailers they were ordering from us. Using high strength steel (HSS) we gave them 1500 kgs weight reduction per trailer on the total number of trailers. Now tipper customers and even OEMs are asking for this material. So we gave our designers this idea to use HSS for bulkers as well. It has brought down the weight up to one ton,” shares Mr. Reddy.
Despite HSS costing 8-10 per cent more, the clients are happier because their payload has increased and they recover the additional cost in three-four months.
Core consolidation
While AAEPL may be making inroads into new avenues like building reefer bodies, they are more focused on consolidation of their core business in the face of stiff competition. The upper hand and the confidence can hold true only when they ensure that their products continue to deliver minimum field failures.
That, it seems, is the ultimate aim of the owner duo.
