Leadec India targets over 25% growth in 2017

Leadec India, erstwhile Voith Industrial Services India and now owned by the Leadec Group from Germany, is a fast-growing company offering services under two verticals – production services and supply chain solutions.

Under production services, Leadec India offers production equipment maintenance, projects and automation solutions and production support and sub-assembly. Under the service vertical of supply chain solutions, it offers packaging, warehousing and line feeding solutions.

The company is anticipating growth of more than 25 percent in CY2017. “Organisations are largely accepting and appreciating the concept of PPO (production process outsourcing) as it helps them focus on their core activities like product development and hand over the non-core activities to the technical service providers like us. We are also expecting good growth this year on the back of new customers on board from sectors other than automotive. Good growth is also expected in other services such as project solutions typically in the areas of HVAC and material handling, production support and supply chain services like reusable packaging solutions,” says Sudhir Gurtoo, managing director, Leadec India.

The company had clocked YoY growth of over 25 percent in CY2016 too. According to Gurtoo, addition of new customers helped the company steer through the challenging times in the industry.

“We added 10 new customers last year, taking the total to nearly 40 in India. The majority of the customers added include automotive OEMs, auto ancillaries, tractor and two-wheeler manufacturers. Though the auto industry saw a temporary impact of demonetisation, we could hardly see the same in our business and have been witnessing steady growth,” Gurtoo adds.

Leadec India also recently started its first sub-assembly operations that include a wheel and tyre production contract in Gujarat for a major Japanese automotive major. Steady expansion over the years has also resulted in the consistent growth in its headcount. The company now employs around 1,400 people for its all-India operations and plans to hire another 300 this year.

 GROWTH STRATEGY

The company follows a simple growth strategy that it says it is providing good returns. While its service portfolio is aligned with the automotive industry’s growing requirements on the production and supply chain fronts, it continues to expand its services lines with existing customers. The recent contract to provide wheel and tyre assembly support is an example of extension of its service portfolio. The company is also focusing on developing and training skills in certain critical areas including PLC, automation and robotics programming as a part of its growth strategy. 

Revealing additional details on the latest contract for production support, Gurtoo says, “We are assembling around 500,000 wheels and tyres per annum currently. This will increase to 12.5 lakh units next year, handling around 16 variants. We are expecting to assemble around 37.5 lakh units of the wheels and tyres over the next three years.”

In the context of expanding its service portfolio, Gurtoo adds, “We would be adding more services under supply chain solutions. To complement reusable packaging solutions we have added warehousing solutions and line feeding solutions.”

“We have also added a few special services including the audit work like condition-based monitoring, vibration analysis, thermal analysis, spare part audit, energy audit, paint defect analysis. These are short-term projects that largely help manufacturers optimise their current processes and predict any form of major failure in machines and equipment. We further plan to add dry ice cleaning technologies as a value-added service for our customers. We are among very few to offer all these high-end technical services under one roof.”

Earlier this year the company has added a Tier 1 supplier from Denmark that supplies energy efficient drives, motors, steering systems to agriculture and construction equipment manufacturers. According to Gurtoo, the contract is for plant and utilities operation and maintenance.

Leadec has also bagged a contract from a South India- based Tier 1 supplier to the two-wheeler industry for the maintenance of its CNC machine shop.

Under its mid-term growth plan, Leadec is set to expand all four service lines besides expanding its footprint in India. “We are also looking to start operations in the eastern region. Potential opportunity areas for us in the near future include reusable packaging solutions for auto ancillary units, onsite brownfield projects and sub-assembly of automotive components,” signs off Gurtoo.