Hindustan Composites Ltd. (HCL) has pioneered the development, manufacture and marketing of automotive and industrial friction materials in India, setting high standards in quality and technology through collaborations and in-house research and development over the last five decades. Established in 1964, the company had initial association with Ferodo, U.K. for 30 years. Today, HCL is part of the Rasoi Group which is also into consumer & health care products, auto components, investment and real estate.
We caught up with Mr. P K Choudhary, Managing Director, HCL, for an exclusive interview to know more about recent developments in the company, its future plans and also about the evolution of the friction material segment in the country.
Excerpts:
According to you, what are the current trends in friction material technology and how are customer expecting from suppliers like HCL?
Friction material components such as brake linings have undergone lot of changes and technology upgradation in the recent past to improve the braking performance in the vehicle and to meet the expectation of the end users. The expectation of the drivers and travelling public has also undergone a sea change. Friction technology is a chemical science and plenty of research has been done to bring out the best formulation in friction material. Today, the end customer wants improved response time while braking, reduced stopping distance, noise-free lining, improved life and above all, different grades for varying vehicles and applications. It is a big challenge for friction material suppliers and we, on our part, are in advanced stage of addressing the customer expectations at large.
We have a clear intention of consolidating our position as one of the leading players in the automotive friction material category. We will be able to grow with our customers because we are in the process of offering our services in a customized problem-solving competence. What we mean by customized problem-solving is to develop and offer different friction materials under different grades and special formulations to suit specific applications. At present, most of the commercial vehicle OEMs in our country use the similar grade of friction materials towards drum brake liners for all types of vehicles, irrespective, whether it is a haulage, tipper or passenger carrying application.
Could you give us an outline of your range of product offerings?
HCL has different business verticals on friction products and is constantly upgrading and adding latest technology in each segment. Our range of friction material solutions for automotive applications include Drum Brake Linings, both asbestos-free and asbestos-based grades, for CVs, PVs, tractors and earth-moving equipment. We also make Disc Brake Pads for PVs, SUVs, two wheelers and CVs and Brake Discs for agricultural tractors and other applications. Our Clutch Facings for transmission assemblies are used in CVs, PVs and tractors while our Clutch Buttons with Ceramic Button technology are the preferred choice for CV and tractor applications. Apart from these, we also supply friction material for industrial and railway applications.
What kind of infrastructure do you have on the manufacturing front? Do you also have facilities for in-house R&D and testing?
HCL has modern ISO/TS 16949:2009 certified manufacturing plants with state-of-the-art facilities situated at Paithan and Bhandara in Maharashtra. We have all the required machines and facilities such as auto batch raw material weighing system for formulations, bar coding system for raw material weighing, PLC-controlled hydraulic presses, in-house capability of manufacturing binder/resins and yarn, enabling us to conform to the highest standards in terms of delivering consistent quality.
We have an R&D centre recognized by the Department of Science and Technology, Government of India, with a dedicated team of engineers and chemists. The R&D centre is equipped with all testing facilities, including six dynamometers, to take care of the testing requirements of our OEM and other customers across CV, PV, tractor, railway, 3- and 2-wheeler segments. The state-of-the-art dynamometers, testing and analytical equipment make it a truly world-class facility which has made significant contribution towards development of new products, ensuring quality and excellence in production.
How do you foresee the CV industry performing in the near future? What is your level of readiness to cope with the expected rise in demand?
Following a slack period of 3 to 4 years, we have seen an upturn in the Indian CV segment in the last few months. We were ready to respond and benefit from the turnaround and are convinced that it was a wise decision on our part to go for major investment since last year in upgrading our manufacturing facilities, adopting new technology to upgrade our current processes, coupled with sizeable investments to take our R&D to the next level in terms of technical know-how, robust NPD process, new formulations and above all, continuously improving and increasing our In-house testing facilities.
How strong is your association with the OEMs?
We have forged strong partnerships with some OEMs in the country and are taking aggressive steps to enter into business relationship with others with whom discussions are in final stages. We are a major source and a preferred supplier for most of our existing OEM customers’ new projects and developments.
We understand that you have laid a solid foundation in aftermarket space. How do you expect this segment to unfold given the stiff competition in the field?
HCL has traditionally been a strong player in aftermarket segment over the last five decades. Our distribution set up and aftermarket coverage is one of the best in the industry. We have four Regional Offices and sales representatives all over the country, with around 100 distributors and approximately 3,000 dealers/stockists spread throughout the country. Considering the market size and changing service practices, we see huge scope to double our existing aftermarket business in the next few years. The aftermarket space is one of the key focus areas in our business strategy.
One particular product category in which we are a dominant player in the aftermarket is Clutch Facings. While we work closely with all the Clutch Assembly manufacturers in the country for their OES requirements, our Clutch Facings business is growing at a steady pace and soon we shall be supplying our facings for OE fitment as well.
Can you spell out the growth strategy and future plans of your company?
We are very optimistic about our growth prospects and wish to project ourselves as a specialist in friction materials by offering the right kind of solutions to our customers. While we have already charted a long-term plan with clear objectives for all our business verticals, the automotive segment will remain our core business area. We are targeting a CAGR of 25% YOY, bulk of which would come from the automotive space through existing customers with new products and new customers with new products. On the export front, we are planning to penetrate the aftermarket segment in North America and Europe where we see good business potential. We have already obtained the necessary certificates and test approvals and are in the process of adding few more.
With regard to Disc Brake pads, we are a new entrant in the field and with our recently-formed association with Advics of Japan, we have started concentrating on the aftermarket space in a modest way. Considering the acceptance level of our product, we see huge scope to grow this business multifold. We have already developed around 60 references of Disc Brake pads for various applications. We are also in the process of improving our technical know-how in commercial vehicle pads considering the increasing shift towards Disc Brake pads in CVs in our country. Business from Disc Brake pads will also be an important growth area for the future.