Saurabh Gupta | 14 May, 2008
Noting that two-thirds of the Indian machine tool industry consists of SME manufacturers N. K. Dhand, President of Indian Machine Tool Manufacturers' Association in an exclusive interview to SME Times said that the machine tool industry in India is primarily dominated by technocrat-entrepreneurs, most of whom are of the first-generation.

Excerpts of the interview...

Do you think that Indian small and medium enterprises (SMEs) are technically capable to compete with globalisation?
Dhand: Two-thirds of the Indian machine tool industry consists of small and medium manufacturers. The machine tool industry in India is primarily dominated by technocrat-entrepreneurs, most of whom are of the first-generation, who are driven by their passion and zeal for manufacturing high-productive and cost-competitive customised manufacturing solutions.

The growth and competitiveness of the machine tool industry in India is driven by these technocrat-entrepreneurs. Several machine tool manufacturers who are currently making inroads into potential global markets have their origins from the SME segment. At the same time, there is a concerted effort within the machine tool industry to scale up so as to emerge as one of the major machine tool manufacturing countries in future.

Off late, there is a noticeable change in the perception towards the 'Made in India' brand elsewhere. The industry's efforts in showcasing the best of India's capabilities over the recent past have borne fruit in the highly-competitive markets of Europe, Germany and Italy as well as in the key Asian markets of China and more recently in Thailand. We expect more such emerging opportunities to be thrown open to the Indian machine tool industry, much of which has been made possible because of the relentless strides of the small and medium scale enterprises in this industry segment.

How  is IMTMA helping SMEs to becoming more techno savvy?
Dhand: For enhancing competitiveness of the Indian machine tool industry and in particular for the SME segment, IMTMA has a strong focus on productivity, quality, technology, new product development, design, customer satisfaction, etc, which is channeled through:

• Array of international and national seminars, workshops and training programmes - to update users and manufacturers on technology and processes.
  
  
• Customer interactions and plant visits - to  understand their requirements; get their feedback; and in the process, forge a much-closer relationship.
  
  
• IMTMA Design School - the country's first private training institution for machine tool design; and  training programmes on mechatronics, CNC machine tool technology, aesthetics, ergonomics, etc.
  
  
• IMTMA Clusters - IMTMA was one of the early industry Associations that formed a machine tool cluster in Bangalore comprising companies that compete fiercely in the market place, but cooperate with each other in building competence. Sharing experience, brainstorming; rationalising capacities, apart from clubbing purchases to reap cost reductions ranging between 30 to 50 % are some achievements of the Cluster.
  
  
• Machine Tool Summit - confluence of 500 industry stalwarts. 3 days of expert coverage of all facets of Business Excellence made it a Learning Summit. First one in May 2005 and the next one in May 2007 - both in Goa.
  
  
• Productivity Summit - where leading thinkers and practitioners share their knowledge and successes.
  
  The highlight of the Summit is the 'IMTMA - Siemens Productivity Championship Awards, to recognise outstanding case studies of productivity improvements. Two events already scheduled in Chennai in 2006 and in Bangalore in 2007. Next one is scheduled in New Delhi on 08 and 09 August 2008. Over 600 delegates expected.
  
  
• Group participation in international overseas machine tool exhibitions - to showcase the high-quality, cost-competitive manufacturing solutions from India; as well as to enhance the Made-in-India brand.
  
  
• International outward missions to potential overseas machine tool markets to tap opportunities.
  
  
• Technology missions for interaction with Universities and Industries at the forefront of R&D - to meet keep abreast and develop relationships.
  
  And creme de la creme --
  
• Exhibitions - famed initiatives of IMTMA - IMTEX, Tooltech and Modern Machine Shop - are on the global map of exhibitions for machine tools and manufacturing solutions.
  

Our SMEs do not have enough money to spend on research & development (R&D). According to you what is the alternative solution for this? Do you think that the government is doing enough in providing R&D support to SMEs?
Dhand: Growing competition together with a concerted effort to develop enhanced quality and highly productive machine tools and manufacturing solutions have prompted most industry players to increase their focus on technology, design and new product development. This is now emerging as one of the core focus areas within the Indian machine tool industry, in particular with the SME segment.

At the same time, this initiative can be further strengthened with support from the government through a special promotional effort on R&D and innovation. A policy stimulus is needed, for instance, a 150% weighted deduction of R&D expenditure, as offered to other key industry sectors.

Transferring developed technology to SMEs can result in quick improvement of technology across the sector. What is your opinion on this issue? How can technology up-gradation be brought about in the SME sector?
Dhand: The machine tool industry was amongst the first sectors that faced the onslaught of a protracted recession in the late nineties. Rather than closing shop, Indian manufacturers, especially those in the SME segment, put in their best efforts in terms of enhancing competitiveness, improving quality standards, adapting newer technologies and bettering design features. These efforts have obviously paid off, with the global market now recognising Indian machine tool industry as offering 'value propositions' and not merely low-cost products.

We, in IMTMA have also initiated a host of measures as well as launched several new activities, so as to assist the Indian machine tool industry become competitive in an open market. Focus of the Association's activities is primarily to enhance productivity and improve quality of the industry.

Much of the enunciation on upgrading technology and quality levels of the industry has also taken place under the aegis of a unique National Programme for Development of the Machine Tool Industry.' The national programme has come to symbolise as the one-stop forum for enhancing capabilities of the Indian machine tool manufacturers, in particular our SSI units, so as to achieve competitiveness of the highest order.

The Association also organised a CEOs B2B Technology Mission to Germany in May 2006, in order to help member-companies to find ways to upgrade their product and production technologies. The mission, consisting of 24 CEOs from the machine tool industry, undertook a week-long visit to select German universities as well as research and technical establishments to get a close view and information on the kind of technology developments pursued by them and to partner with them for its success development in the Indian market.

Having said that, in the world of technology denials, it becomes imperative for any advanced industrialised nation to develop its own technology requirements - either through collaborations, or through indigenous development. The Indian machine tool industry was amongst the proactive industry-segments to recognise this reality and has steadfastly worked towards this realisation.

What are the challenges that SMEs are facing in technology up-gradation?
Dhand: In order to further improve our competitiveness a greater emphasis is required on technology, design and product development. "German quality machines at Chinese prices" has to be our goal. At the same time, we need to constantly partner with our customers to understand and meet their expectations.

Although scattered all over the country, the plight of the machine tool industry, in particular in the SME segment, is common. The strengths, weaknesses, problems and challenges faced by machine tool manufacturers are universal, rather than regional or sectoral.

Topping the problem list are taxes and duties.

Critical machine tool technology inputs like CNC systems, ball screws, precision bearings, linear guides, in-process gauging systems, dynamic balancing systems, high speed spindles etc, not made in India, suffer 12.5% basic duty. Considering the multiplier effect of this mother industry - the tariff should be 5% or less.

The next concern is rampant imports of second-hand machines, some of questionable Safety and most of dated technology. While the machine tool industry has no qualms about import of new machines, specially those not made in India, it is rather concerned at the unfettered entry of obsolete, unsafe second-hand machines, which will result in low-quality products and accident hazards.

IMTMA has recently taken up joint programme with the technological University of Darmstadt in Germany on adoption of lean manufacturing process by Indian companies. Please throw some light on this joint programme?
Dhand: Detailed information on this programme cannot be shared in view of the confidential nature of the contents.