Rieter Nittoku Automotive inaugurates Chennai plant to capitalise on demand

RNASP was incorporated in June 2008 and commenced manufacturing operations at its greenfield plant in Oragadam, about 40km south of Chennai, in May 2010. Its current product portfolio includes vehicle trim such as carpets, NVH insulators and heat shields.

RNASP is a 51:49 joint venture between the Rieter Group of Switzerland and Nihon Tokushu Toryo Company Ltd of Japan. Rieter and Nittoku have been working together since 1967 and have successful joint ventures already established in 22 countries including Japan, USA, China and Thailand. The Rieter Group is a leading manufacturer of textile machinery as well as a supplier of integrated solutions of noise control, thermal management and interior trim for the automotive and truck industry. Rieter has a presence in 21 countries with around 70 manufacturing facilities. The Nittoku Group’s principal activity is the manufacture and marketing of synthetic resin paints and coating materials. The operations are carried out through two divisions – paints and automotive paint related business.

Cutting down on weight

Speaking to Autocar Professional, Ralph Ruthner, CEO of RNASP, says the company currently manufactures three major product lines – carpets, NVH insulators and heat shields. At present, it supplies NVH insulators and carpets for the Nissan Micra and will soon commence supplies to Toyota Kirloskar Motor for its Etios.

Ruthner says these acoustic packages use proprietary ‘Rieter Ultra Light’ technology that can reduce the weight of the acoustic package of a car by up to 40 percent while improving vehicle comfort. Rieter and Nittoku established a successful global supply network with the goal of serving OEM clients around the world and the Chennai plant is the fourth Rieter Nittoku joint venture in Asia, which will supply products based on the latest technology from Europe and Japan, he adds.

RNASP will be looking at manufacturing foaming for NVH and heat shields. “We have not brought this technology yet and if the customer insists, we will bring it here. We are already discussing with Nissan to bring in some patented technologies in heat shields. We are also planning to bring in heat shield technologies for higher segment cars,” he reveals.

Accent on localisation

There is also focus on cost-competitiveness and the company, which currently imports tools from a few countries including Thailand, is now scouting for tool manufacturers in India to enable it to be further cost-competitive. Of the 16 major raw materials used by the company, 14 have been localised so far. “We are in the process of localising one more now. The last one, which is coming from South Africa, is not in our priority list as the cost is very low,” says Ruthner. The company believes demand for its products in India is set to rise substantially in the near future and is gearing up to manufacture them locally. The new products will be manufactured in the proposed expansion project that the company planned already. Thus far RNASP has invested $ 15 million in the Oragadam facility and plans to invest another $5 million next year to expand capacity as well as enlarge the product portfolio.

Ruthner says that the original gameplan was to construct a bigger plant but due to the global recession, it was downsized to the present level. “Our group has postponed several investments in different locations worldwide but not in India. The plan for the Oragadam plant was always on because to invest in India was a strategic decision,” for the group, he says. Currently the company has a production capacity of 250,000 carpets and half a million dashboard inners a year. “We planned things in such a way that the moment Nissan reaches a volume of close to 200,000 cars a year, our expansion is ready with the second carpet line as well,” he says.

Rieter’s wholly owned subsidiary Rieter Automotive Systems (RAS) opened its first India plant in Behror in Rajasthan in 2006 and has been manufacturing felt, NVH and damping parts. RNASP is equipped with the latest production technologies from Europe and Japan, including the first fully robotic water jet system for cutting carpets. The facility is spread over 11 acres producing moulded carpets, acoustic dashboard solutions, engine compartment parts and aluminium heatshields. The next expansion phase is set already for 2011, which will result in a growing number of automotive jobs in Chennai, says Ruthner.

“We are in the South to cater primarily to Japanese OEMs through RNASP while Rieter Automotive Systems’ plant in Behror is primarily to support the rest of India and non-Japanese OEMs,” he adds. This is mainly due to the specialty of the individual partners in supporting the needs of the customers based on the geography they belong to. For instance, Rieter is well versed in catering to European customers while Nittoku is a seasoned supplier for Japanese OEMs. However, in India, RAS has been supplying to Honda Siel, Maruti Suzuki, Mahindra & Mahindra and Tata Motors. Therefore, both the companies will be looking at synergies while addressing the requirements of their customers as it will make tremendous sense considering the logistics among other things, he indicates.

The Oragadam plant has been constructed based on the best practices that both the partners have garnered over a period of time from the manufacturing facilities across the globe. Rieter has developed the ‘Rieter Production System’, which is similar to the world-renowned Toyota Production System and implemented at all the plants. Since the company believes in continuous improvement not only at the individual plants but also in deploying it all over, the plant managers across the world have a dedicated teleconference every month. This helps in sharing and learning best practices, concludes Ruthner.

INTERVIEW RALPH RUTHNER, CEO – RIETER NITTOKU AUTOMOTIVE

What are the challenges in designing and manufacturing your product range? We make the inner and outer layers of the dashboard (the separation between the engine bay and passenger cabin), heat shield and the carpets. Among our products, only the carpet is the visible part for the end customer.

The challenge is to make the product in lightweight material as it will help OEMs to reduce the weight of the car and in turn improve fuel economy. That’s the reason why we have to have a combination of acoustic abilities and heat management. All our products have this unique combination. This is our core competence and we introduce them in every product that we make. The challenge also lies in the technical excellence as we need to convince our customers on the technical capabilities and aesthetics (especially in the case of carpets) of our products.

The products that you make are very light and logistics costs need not be an issue. Then, why do you need to be located closer to customers – is there a strategic reason?

The carpets, for instance, are manufactured by stretching and pressing processes. Technically we have to guarantee that the carpet material is suitable for these treatments. Moreover, the profile of the carpets will be in different shapes and storing them for more time might deform the shape. Their shelf life is practically a few days only. Therefore, we need to supply them to our customers at the earliest and also in a special pallet that will retain the profile of the carpet.

Do you have export opportunities?

Yes but due to the specialty of our products, we cannot export. This is primarily due to the shorter shelf life. However, we supported our sister company in Thailand that had some problems with machinery. Since it was the same part for the same car, we supplied it from here. We had to airlift it, despite being very expensive, because customer satisfaction is paramount of us. Our products go into vehicles that are exported.

Why have you deployed robotic water jets to cut carpets? Isn’t there any other technology for this purpose?

Yes, we use robots for cutting the carpets with high-pressure water jets. Our customers say we are the first to use this technology in India for cutting carpets. We have decided to bring this technology to India though it does not provide any savings. In fact, it results in additional costs. However, this operation helps us in cutting carpets precisely, thereby enabling us to make quality products continuously.

Product-wise, is there a differentiation between RAS and the joint venture? RAS, for instance, has a production facility for dampers, which we (RNASP) do not have. Even if Nissan were to ask for dampers, we would buy from RAS. At the moment, we do not have plan for such a production facility in our plant.

Do you think your presence – both through standalone and JV companies – in southern and northern India is sufficient?

If sales go up in India and there is a need for another plant, then it would logically come up in Pune. However, there is no decision made on such a plant. In the western region there are many OEMs including Tata Motors, Mahindra & Mahindra, Fiat, Volkswagen, Bajaj Auto, Force Motors and General Motors. We are now approaching Volkswagen India. We have also intensified our sales activities in India.

There are three major automotive hubs in India – Delhi, Chennai and Pune. We are currently present in the first two. If any supplier wants to cover all of them, he has to be present in the three places.