— V.P. Mahendru,
CMD, EON Electric Ltd
EON Electric is the reorganized entity formed when industrial leader
Indo Asian Fusegear sold off its switchgear business to Legrand in
2010. EON is now focused on specialized products including home
automation.
V. P. Mahendru, in this interaction with
Renu Rajaram, takes us through the various endeavours of EON
Electric and shares his vision for the company. Mahendru explains
that wires & cables today account for 70 per cent of the company's
business and that energy-conserving products will be the
company's new focus area.
Please brief us about the cable industry in India.
The wire and cable industry has moved from being a small
industry 20 years back to a very large industry over the last
decade. Although it is a volume-driven product, it has a lot of
quality and technical particulars. Over a period of time, the
industry has moved from the unorganized to the organized
sector. Requirements like brand and quality perception play a
key role in this Rs.15,000-crore industry. EON's business for
wires and cables is projected to grow nearly 400 per cent in the
current year 2012-13 over the previous year 2011-12.
Take us through the transition from Indo Asian to EON.
We started off in 1958 as a group of young technocrats
indigenously developing India's first sheet steel enclosed
rewirable switch at Jalandhar in Punjab. Gradually we grew
into a multi-product, multi-location company named Indo Asian
Fusegear Ltd, specializing in manufacturing and marketing of a
wide range of high-tech electrical products used for
distribution, protection, control and conservation of electrical
energy.
In 2010, we sold off our switchgear business to France's
Legrand and decided to continue as a manufacturer of
specialized products including home automation devices. As a
result of switchgear business sale, we reorganized and
renamed our company as EON Electric Ltd.
What is the contribution of wires & cables in EON's overall
business?
Today, almost 70 per cent of our business comes of domestic
wires and cables. Overall we are catering to real estate
builders, government housing institution, industrial sectors,
hospitality, hospitals, telecom etc. We are planning to increase
our product range by adding copper specialized cables such as
copper armoured cables and solar cables.
What is your product mix and what constitutes your clientele?
Our core manufacturing capabilities lie in lighting, wires &
cables, mobile accessories, modular switches and fans. Apart
from energy conserving high quality wires, EON is introducing
new varieties of wiring accessories, switches, sensors and
home automation systems.
Currently, we are focusing on all major markets in India.
Apart from metropolitan cities, we focus on rural areas as well.
Our mission is to satisfy our customers with innovative and high
quality products.
What makes EON unique to the cable & wire industry?
EON Electric is amongst the very few manufacturers who use
specialized machines from Niehoff, Germany for wire drawing
for absolute accuracy of conductor. These machines have
online annealing facilities to ensure that the conductivity of
cable is uniform throughout the length of the conductor. All our
extrusion lines are completely automatic and computer
controlled so as to reduce human interface in the
manufacturing process. This ensures that the quality of the
product is consistent and independent of the skill level of the
operator.
We aim to be market leaders in our segment and are planning
to invest about Rs.100 crore in existing and new facilities for
improving our production capacity and thereby enhancing
revenues.
How does the fluctuation in international copper prices affect
your wires & cables business?
Copper prices in the international market are volatile but
that does not pose risk to our profitability. We have a
strategy to ensure that the maximum purchases are made on
minimum average price. This leads to minimal impact on the
cost and makes our products cheapest in its class in all
circumstances.
Tell us about EON Electric's JV with Simon.
Our joint venture company Indo Simon Electric Pvt Ltd, formed
with Simon, Spain is progressing well. Simon, a Rs.1500-crore
group, is among the leading group of companies in Europe. We
hold 51 per cent share in this joint venture.
Any other JV in recent times?
Yes, we recently entered into a joint venture agreement with
OMS of Europe for producing variety of high efficiency LEDbased
high-end lighting and luminaries for use in commercial
buildings as also in the energy-efficient street lighting for
brilliance of lighting and conservation of energy. Bright,
brilliant and well designed lights enhance aesthetics. We are
also setting up a Lighting Research Centre (LRC) with OMS at
our own premises in Noida.
Tell us about your R&D infrastructure.
We are making continuous efforts for integration of R&D
activities with our business objectives so as to offer better
value-added products and services to our customers. Apart
from strengthening of our technical base, we also focus on
improvement in products reliability and quality.
We have an in-house R&D facility equipped with all
necessary infrastructure. In addition to this, we forge tie-up
with various domestic and international players for technical
assistance. Recently, we have imported new machinery that
uses ultra modern technology to develop more innovative
products at a faster pace.
EON Electric, as we understand, exports wires and cables to
over 40 countries in Europe, Australia and Africa. Please tell us
about your export potential.
All our products are exported to 40 countries in the regions you
have just mentioned. With the quality and variety of products
that we produce, there is scope to widen the export market and
we have plans to do that.
What about your capex plans?
We are setting up India's first greenfield plant for
manufacturing Lithium ion batteries at SIDCUL, Haridwar at an
investment of Rs.50 crore in the first phase. Currently, we are
operating a pilot plant for the batteries at the same location.
The new plant will be commissioned by the end of 2012-13.
We also strive to come up with energy-conserving products
in all our verticals and have put in a lot of resources in terms of
research and development as we see this as the next major
growth provider in our line of business.