Samkrg crosses Rs. 100-cr turnover
Exponential growth in exports
Mr. S. D. M. Rao, Chairman & Managing Director
Recently I met the man behind the success of Samkrg Pistons, Mr. S.D.M. Rao its Chairman & Managing Director. At the age of 74 Mr. Rao is raring to take the company to great heights. Personally it’s a great feeling, for he as he founded the company in 1990, and in a span of 17 years established Samkrg as high quality pistons and rings manufacturer with growing presence both in the domestic and export markets.
Mr. Rao along with his two sons, Mr. S. Karunakar and Mr. S. Kishore, and well supported by a team of fully trained professional managers, is driving the company for growth through technical excellence, low cost production and excellent service to its customers.
Exports
In 2006-07 the company did exceedingly well on the export front with an export growth of 67 per cent to Rs. 26. 40 crores from 15.83 crores the previous year. Exports are made mainly to Europe and North America.
Mr. Rao is quite upbeat on exports as the company recently received an order from Yamaha (Europe) for supplying pistons and rings. Samkrg will be the single source for Yamaha Europe, which is a subsidiary of Yamaha Japan. The company has been supplying to a German auto major for the past three years and has recently received orders for supplying pistons to its plants in Germany, Russia, France and the US. The order would be doubled in the next couple of years. The company has also been exporting to Piaggio of Italy and Derbi of Spain.
Mr. Rao does accept that margins have been hit a bit with the rising rupee value, and says that nothing much can be done about it except to work on plans to reduce costs and improve product quality and efficiency.
Mr. Rao is equally optimistic about business prospects in the domestic market. The company has very strong presence in the two-wheeler OE segment with close to 90 per cent share in TVS and 30 per cent in Honda (HMSI), as also Bajaj Auto. It has made it first shipment of 15,000 pistons to TVS' Indonesia project which would be manufacturing the step-thru Neo.
Honda award
A major achievement, or should I say acknowledgement of Samkrg's quality and service, was the company receiving the coveted Honda Quality Achievement Award for 2006-07 for a second consecutive year. The award was given for achieving ‘Zero’ PPM rejections in quality, ‘Zero’ PPM rejection in warranty and ‘Zero’ PPM defaults in delivery. The company has been maintaining ‘Zero’ PPM for the last 20 months.
Mr. Rao says that this is an endorsement from a Japanese company and reflects “our commitment to our clients both in terms of providing the best quality product at the right price and delivering it at the right time”.
Traditionally Samkrg has been very strong in the two-wheeler segment, but the company has clear intentions of entering the 4-wheeler and commercial vehicle segment as well. It has already been supplying pistons for the 4-wheeler segment in the automotive aftermarket. The company is now approaching car and commercial vehicle manufacturers for OE business. In fact, it has also been shortlisted for the Tata small car project.
“We have already introduced pistons for the trucks and tractors segment in the American aftermarket and are also working with the German engine manufacturer who is supplying engines to trucks”, Mr. Rao added.
Expanding capacity
With the current boom in the domestic and export markets, Samkrg has been expanding its production capacity. Currently it has three manufacturing plants. The second and third plants, both near Vizag., manufacture cast iron & steel rings and pistons and pins respectively.
The success of Samkrg, Mr. Rao says, is due to the fact that “our clients have accepted our quality; they know that we are supplying with ‘Zero’ PPM levels and ‘Zero’ PPM warranty to companies like Honda. They have realised that this is a company which they can rely on and we have been adding capacity to meet their demand”.
Samkrg is planning to expand its capacity for manufacturing pistons from 6.5 to 7.5 million units annually, and for piston rings it is planning to expand its capacity from 20 to 25 million units annually. This would entail an additional investment of Rs. 15 crores. Last year the company invested Rs. 12.90 crores towards capacity expansion.
Developing new products
Another important factor that contribute for the success of Samkrg is the company’s capability to develop and manufacture pistons and rings for any new product in less than six weeks. It has created the infrastructure for the purpose, and as Mr. Rao observes, “most of the development is done in-house, and we believe we are uniquely positioned to compete in the rapidly growing and extremely attractive domestic and overseas markets”.
This is a huge advantage for Samkrg as vehicle manufacturers are launching new products and they expect the component manufacturers to develop products in the shortest possible time-frame.
Samkrg has invested quite heavily on rapid prototyping and has also invested on creating infrastructure for tool rooms in all the three plants. The company spends 2.55 per cent of net sales on R&D. It is always focussed on quality and it is already certified to TS 16949:2002. The company is going in for ISO 14001:2004 certification.
Targets
For 2007-08 the company is targeting a turnover of Rs. Rs. 115 crores and a modest growth of 15 per cent in exports and profits. Currently 90 per cent of the company's business comes from the automotive segment.
It is for stabilishing the future of Samkrg that Mr. Rao has created a professional team headed by his two sons Mr. S. Karunakar who is the Vice President and Director of the company and Mr. S. Kishore, Director - Operations of the company. The company employs close 1,000 persons in all the three manufacturing facilities and provides continuous training to all its employees. A full fledged training facility has been established in all the three facilities.
Is Samkrg looking at acquiring companies globally? Not really, says Mr. Rao. However, there have been some enquiries from companies in countries like Russia, Iran and Malaysia that are looking for technology or even setting up joint venture. But this would take some time, and the immediate priority for Samkrg is clearly to consolidate the existing business.
