INDIA Is On The Path To Be The World’s Fastest Growing Major Economy
LAPP India, the second largest company of LAPP outside of Germany, is an important contributor to the LAPP group, and is poised to become an INR 1,500 crore company in the next five years. To achieve this, the company will restructure its business in order to add more value to its customers, and with major focus on segments such as electric vehicles, food & beverage and oil & gas which have immense growth potential in India, says Gary Bateman, the new Managing Director of LAPP India who is responsible for spearheading and enhancing organisational and operational efficiency by leveraging his extensive cross-functional experience. He is expected to foster a global mindset to create vision and build business processes to address the local market by understanding and managing cultural differences and cultural dynamics, discovers P.K. Balasubbramaniian in an interview with Gary Bateman. Excerpts:
Q. You are now helming the Indian operations of the Lapp Group. Would you like to revisit the journey of Lapp India and its major milestones?
LAPP India launched its operations in 1996- the first multi-national cable manufacturer to set up operations in India.We started off with the opening of our first local manufacturing facility in Jigani, Bangalore followed by a second one in Pilukhedi, Bhopal in 2012.The second manufacturing plant was set up primarily to produce best-in-class electrical wires for the building segment. The journey of LAPP in India that spans over a period of more than two decades witnessed the transition of the company from a cable manufacturer to an end-to-end solutions provider. We have also recently strengthened our position in the solutions space by offering an Industrial Communication range of products for network connectivity. Our strong presence across varied sectors along with a local manufacturing presence allow us to provide a customer centric service experience based on our in-depth understanding of the market pulse.
Q. Tell us something about your wherewithal and how the company is poised to spread its wings.
LAPP India, the second largest company of LAPP outside of Germany, is an important contributor to the LAPP group, and is poised to become an INR 1,500 crore company in the next 5 years. To achieve this, we will restructure our business in order to add more value to our customers, with a special focus on areas such as our standard product portfolio as well as our value-added services (ÖLFLEX® CONNECT and Industrial Communication). Our state-of-the-art local manufacturing facilities and our three service points in Bengaluru, Pune and Dharuhera specially cater to local demands and provide customised products as per customer requirements. In the years to come, our major focus will be on focused segments such as electric vehicles, food & beverage and oil & gas, which have immense growth potential in India.The pandemic has also boosted our digitalisation initiatives to provide a faster and smoother customer service experience by reducing delivery time, providing 24×7 engineering support to our customers, staying connected with our customers online and digitalising internal processes for quicker output.
Q. What are the dynamics of the cable and wire industry here? And what’s your assessment of the market economy?
The era of Industry 4.0 calls for the transmission of increasing data loads at lightning speeds, as well as miniaturisation of devices to improve resource efficiency. This will demand more flexible, compact, and modular connector systems. With individual production lines being used for multiple products, connectors have to be easy to configure and reassemble. 5G and wireless technology are expected to be major change drivers in the industry through the years to come. However, contrary to popular belief, this doesn’t mean that cables will be wiped out. In fact, advancing electrification and networking in factories will demand even more cables to guarantee the high transmission rates required by the industry. Additionally, the data reliability and latency levels demanded by industrial production processes cannot be achieved through wireless solutions without disproportionately high costs. Multiple wireless connections can easily interfere with and eliminate one another and can also be interrupted by moving objects. Cables, on the other hand, are less susceptible to malicious disturbances and hacker attacks.
Providers of customised ready-to-use assemblies and end-to-end integrated solutions will be highly preferred by customers. With the increasing number of players in the market, providers need to create a differentiation in the minds of the consumers in terms quality, reliability and the kinds of services provided. Customers will demand greater value from wire & cable providers to meet their changing needs with customised solutions.
Q. Which are the key sectors you are eyeing to take a plunge to make the most of the growth opportunities available?
India is on the path to be the world’s fastest growing major economy in 2022. In terms of growth opportunities, we expect food and beverage, infrastructure, electric vehicles, oil and gas, and industrial communication to be major commercial drivers for the wire and cable industry in India. The accelerated digital boom across industries calls for scalable, faster, reliable, and interoperable communication protocols which boost the demand for cables and wires. Automation of systems become an essential part of digitalisation, providing opportunities for the cables and connectors used in machinery.We are also witnessing a growing requirement for modular cable technology with the rise of smart manufacturing and industry 4.0. The industrial communication industry also has strong potential, expected to grow at a CAGR of 6.3 percent to USD 23.5 billion by 2025. With the developments in the economy, there is also increasing demand from the Indian food and beverage packaging market which is expected to grow at a CAGR of 29.88% between 2020 and 2025. While still at a nascent stage in India, the electric vehicle market in India is expected to reach USD 47 billion by 2026, increasingly seeing more players venturing into the market every day.
These valuations indicate the positive growth path on which India is advancing, projectingthe massivepotential of the country’s economy across sectors, which will also positively impact the wire & cable industry.
Q. What are the key differentiators and competitive advantages of Lapp India?
LAPP India comes with a history of 60 years of manufacturing excellence and a diverse product portfolio that is a symbol of reliability and durability. But for us, the most significant differentiator is how we keep innovation at the forefront and constantly innovate to bring in new products based on cutting edge technology.
In terms of advantages over our competitors, unlike many other multinational companies, we have local manufacturing facilities that specifically cater to Indian customer requirements and demands.We are not just a wire & cable manufacturer like many other players in the market, but a one-stop solution provider for all our customer needs.To provide maximum value to customers, we provide them with access to both locally manufactured products that address their specific needs as well as aglobal product portfolio that can be accessed from any country that the customer is based out of.
Q. With your new assignment, is your ‘strength of will’ being put to test? What are the challenges ahead for you?
Taking on this new role was especially challenging as it happened during the pandemic, and it took a while for organisations around the globe to settle into the new ways of working. It was no different for us, but thanks to the support of technology, I was able to stay connected with my team in India and they made the transition extremely easy and efficient. Maneuvering the company through the pandemic and emerging with an impressive double-digit growth in the past year was a big win for the team.
Ensuring a smooth transition of LAPP from a cable manufacturer to a one-stop solution provider is one of the biggest challenges for the whole LAPP team currently. This transition will be built on our growth plan for emerging as an INR 1,500 crore company in the next five years. This is a pivotal point for LAPP and will involve some critical decisions as part of this process. Specifically, for the Indian market, we also want to look at increasing our presence in emerging segments such as electric vehicles.
Q. What is the transformation you want to bring in the company to help meet the local needs?
We want to maximise our focus on the local manufacturing of products as well as local sourcing of raw materials. We believe that the policy of Make in India to serve our customers in India will help deliver delightful customer experiences.
To clearly analyse customers’ evolving needs, you have to be where your customers are. We aim to triple our service points in the next four-five years as well as set up more warehousing facilities to ensure a strong presence across the country.
Q. What’s your vision for Lapp India and where do you want to see the company five years hence?
In our journey to becoming an INR 1,500 crore company by 2027, focusing on the people who drive this company is just as important as the revenue aspect. Our vision for the company is built on two major pillars: business growth and employee/customer growth.
LAPP is a family run company, and our people (both employees and customers) form a huge part of this journey. While we will be planning our strategy forward in terms of expansion and creating a strong footprint in newer segments, we will also be implementing new initiatives for employee development as well as create more robust approaches to addressing customer needs.