“Indian market offers a lot of potential for aluminium extrusions.The real challenge is to convert these potential into real business.” Mr.Kshemendra Nath, MD, Sapa Profiles India.

AlCircle team had the pleasure of meeting Mr. Kshemendra Nath, Managing Director, Sapa Profiles India Ltd during Zak Aluminium Extrusion Expo in Mumbai in December 2013.

The Sapa Group, a joint venture owned equally by Orkla ASA and Hydro AS is the world’s largest manufacturer of aluminum extrusions and value-added profiles. Sapa Profiles India Ltd, a 100% subsidiary of Sapa Group offers aluminum solutions to its discerning customers from itsfully integrated facility at Kuppam with Extrusion, powder coating, anodizing and fabrication services.

A Civil Engineer by profession, Mr. Nath has been with the building and construction field for last 25 years. He joined Sapa Profiles India as Managing Director in April 2011 and since then he had been playing a pioneering role in Sapa’s business expansion in India. He shared with AlCircle his vision for the aluminium extrusion industry in India.

Excerpts from the interview:

AlCircle: Could you tell us in brief about your products and the new projects and expansions that are coming up in Sapa?

Mr. K. Nath: Sapa is the world’s largest aluminium extruder.In India, we started in 2010 with a Fabrication unit in Bangalore producing heat sinks to the electronics and communication industry in India. In May 2011Sapa acquired the extrusion business of Alufit in Kuppam, 110 kms from Bangalore. At time of acquisition, the facility had an 8” UBE make press, anodizing and powder coating facility. After the acquisition, we invested in enhancing the process control, technical systemsand also set up a Fabrication facility to cater to the industrial and the solar segment. In addition to supplying aluminium profiles to the B&C and other industries, we also manufacture components for the industrial segment, solar mounting systems we also do fabrication of heat sinks. Right now we are commissioning our second press, which will start commercial production by Feb 2014.

Sapa is acknowledged globally as an aluminium solution provider than just another profile supplier. We derive our strength from our presence in 40 countries and our rich experience of over 50 years. Our investments, both in terms of resources and manpower are directed towards realizing the objective of being a solution provider. That is why we have an integrated facility whenever we set up a plant.

AlCircle: What according to you are the potentials/ opportunities for the extrusion industry in India in the near and the long term?

Mr. K. Nath: Indian market offers a lot of potential for aluminium extrusions. The challenge is to convert these potentialities into real business. The per capita consumption of aluminium extrusion in India is one of the lowest in the world. The opportunity for extrusion in India is therefore bright and India is slowly opening up to a lot of new opportunities for the extrusion industry; be it machine building, automotive, solar frames and mounting systems, mass transportation or in the building and construction space. Many global majors are setting up their operations in India in all these segments. We would like to position ourselves as the preferred partner to the global customers. We understand the demand for quality and service from these customers will be of the highest order and we are quite confident of meeting them. In turn the whole industry will stand to benefit, as the quality standards are bound to improve from today’s levels.

We believe that in time to come, the demand for extrusion will increase. For example, in the passenger cars, the consumption of aluminium extrusion in India is about 3 kilos per car, much lower than the average consumption in US and Europe which is around 12 kgs. Thereare plenty of opportunities for aluminium in the automotive as it helps in reducing the weight and improving fuel efficiency. Globally, a good deal of R&D work is taking place in the field. Due to the absence of good qualityaluminium extrusion suppliers in the Indian market, many global automakers that came to India did reverse engineering and reverted back to steel. However, if we demonstrate the expertise and prove the availability of quality aluminium extrusion locally, there is no reason why they should switch back to aluminium.There is also wide acceptance for window systems in the market. Wood is no more an option and quality aluminum window systems are slowly replacing UPVC windows. The emerging segment of Metro railways and modernizing of the Indian railways will open up big opportunities. So opportunities are everywhere, only we need to demonstrate our capabilities to meet these demands and convert them into business.

AlCircle: What is your view on the present recessionary condition in the aluminium industry and how is it affecting you as a producer of aluminium extrusion?

Mr. K. Nath: What we are currently going through is a temporary blip and in a long term perspective, this should not be a major concern. It is true that the extrusion industry has not been growing at the same pace as it was a couple of years ago. But the same can be said of many other industries as well. The fundamentals of Indian economy are very strong and we should look into the future to overcome these short term issues.I still believe that new opportunities will be available for the growth of aluminium extrusion in India without a doubt. To sum up, there is definitely a lull but the industry will bounce back.

AlCircle: Which industrial sector (automotive, construction, transport, packaging electrical etc.) do you think has the potential to boost the demand for aluminium?

Mr. K. Nath: Let me answer this from the viewpoint of extrusion industry. Traditionally building and construction has been the biggest market for aluminium extrusion contributing about 50% of the total market and going forward also the building and construction will continue to be the growth driver. The presence of global building system companies and their acceptance by the market will play a very important role in the growth of the B&C segment. This will improve the perception and acceptance of the aluminium window system, because, in the past, aluminium has suffered due to the poorly designed and produced windows and doors and these companies will change that. Solar is definitely a very promising segment and so is mass transportation. Automotive and industrial sectors are other areas for growth but the engine of growth will definitely be the building and construction sector.

AlCircle: As E-Commerce has caught on in a big way in the consumer sector; do you think e-commerce model can work well in the aluminium sector?

Mr. K. Nath: It depends very much on the product per se. More than 50% of the total market volume in India is sold through the dealers, distributors and retailers. So theoretically, there exists an opportunity for e-commerce model. These are mainly in the B&C sector, the electrical sector like the bus bars and rods and bars. Aluminium window system to individual houses will provide a good opportunity and so will roof top solar. But in my opinion, it will be some time before E-Commerce model finds success in Aluminium extrusion sales. In the industrial and other segments, E-Commerce have limitations as most of the products are custom made and quite a lot of customer interface is required. So there will be products where E-Commerce will work and there will be segments where the business will remain traditional.

AlCircle: Do you think that as an online media Alcircle has an advantage over visual or print media in promoting your company products and services?

Mr. K. Nath: Currently we are still depending on the traditional marketing mix to promote our products and services. Online media has an advantage over the visual and print media in the sense that there is an opportunity to make this interactive and that is a huge plus. Unlike the visual and print media, the reach for the online media is really global and not limited by geography. It is also a platform for knowledge and experience sharing and being present on such a platform we would be able to do justice to our core strength.The advantage of online media as I said before;is that unlike print media, it is more interactive and it is not one way communication. There are still more developments to be made in this regard. But, it will definitely open up new avenues in future.

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