National Engineering Industries Ltd. (NEIL), part of the CK Birla Group, is the country’s leading home-grown bearing maker under the NBC brand, catering to the automotive, railways and industrial segments. The company’s facilities at Jaipur and Newai in Rajasthan and Manesar in Haryana produce 100 million bearings annually at present, and once its new plant in Gujarat becomes operational, it will be able to produce 40 million more bearings by the end of next financial year.
NEIL registered an overall turnover of Rs. 1,500 crores in FY14-15 and is looking to make the most of the recovery in the domestic CV market by increasing its share in the segment. It is also aggressively stepping up its focus on exports. “In the last five months, we have registered a growth of over 40% in exports, the highest in the industry. Around 80% of our exports are to the US market while the rest are to the European region. We cater to two big segments, railways and commercial vehicles, in the US, where we cover all major OEMs. We expect 25 per cent of our overall revenue to come from exports in 2015-16”, states Mr. Sanjeev Taparia, Sr. Vice President – Sales & Marketing, NEIL, in an exclusive chat with MOTORINDIA.
NBC bearings are part of the vehicles of almost all major automotive OEMs in different segments in India. In the domestic market, Mr. Taparia says, the challenge is still on the rural front where monsoon plays a major role. “If we notice the automotive industry growth, though the urban sale is very important, growth is actually driven by Rural India. If this economy shapes up well, then we can see actual growth. Other than the monsoon, the Government’s intervention in terms of infrastructure and policies, which is on a low key at present, also plays a significant role. Our product portfolio allows us to cater to various segments other than automobiles, such as railways and aftermarket. We are looking at an overall growth of 20 per cent this year.”
Apart from organic growth, the bearings giant is also looking to spread its wings through the acquisition route. “We are eyeing at inorganic growth as well and are in discussions with some companies. We are on the look-out for companies which operate in a niche market with strong technology capabilities or those which can give us entry into a new market in any segment”, he reveals.
Global competence
New generation products are those which deliver superior performance in terms of better fuel efficiency, light weight, zero maintenance, etc. While NEIL consistently keeps raising the bar when it comes to product performance and technology, its latest offering has been designed in such a way that they assist in vehicle condition monitoring. “We have a magnetic seal in our new bearings which will function as an encoder. We have already started supplying these bearings to premium car manufacturers in the country”, Mr. Taparia adds.
While balancing between quality and cost is quite a challenge in itself, companies like NEIL, operating in the highly price-competitive bearings segment, go beyond the ordinary by catering to the extremely stringent demands from its customers, especially the global OEMs for whom the supplier selection criteria run far beyond standard parameters such as quality, cost, etc. “One major expectation from global OEMs is flexibility in development of new products and ability to adjust to its requirements. With new vehicle models coming up in quick time, the OEMs expect vendors to cut down on development time, so the supplier who responds fastest to this change is preferred. The entire supply chain has become very responsive”, he shares.
Mr. Taparia continues: “In addition, the global OEMs think in terms of environmental impact and safety, so you may produce the best product. But if you are not conscious about the environment, they do not engage with you. They also focus on human policies such as avoiding child labor while issues like IT security and risk management will also have to be addressed by us systematically.”
Doubling turnover
With automobile sales going up both in India and globally, it is but natural that aftermarket volumes have grown rapidly. NEIL has established a strong aftermarket network in over 20 countries and continues to grow at a steady pace despite threats from low-cost imports and the unorganized sector.
NEIL expects the market to grow at 8 to 10 per cent in the next four years and is eyeing a growth of at least 20 per cent in its sales. “We had registered a turnover of Rs. 1,500 crores in 2014-15 and aim to double this by 2018-19”, he concludes.