The ongoing surge in passenger vehicle sales in India is leading to suppliers gearing up to be future-ready, preparing for tomorrow today. Nihon Parkerizing India, whose primary customer is Maruti Suzuki, is one example.
The company supplies surface treatment chemicals for a diverse range of purposes including cleaning substrates, adding corrosion resistance, creating a paint base and providing lubrication and design features. Cue enough to know that for every Maruti which rolls out, there’s more business to be had for Nihon.
With India’s leading carmaker, which sold a total of 1,643,467 PVs in the domestic market in 2017-18, set to expand manufacturing capacity at its new Gujarat plant by 2020, the company feels there is a need to set up a second unit adjacent to the carmaker to be able to cater to upcoming demand in a cost-effective manner.
“We have started scouting for land in Gujarat and we will be buying it by Q2, FY2019. Construction will start early next year and we aim to commence operations by end of CY2019 to be prepared well before Suzuki starts its next assembly line in Gujarat by early 2020,” says Mukesh Mendiratta, vice-president and COO, Nihon Parkerizing India. “Apart from Maruti, we will also supply to HMSI and Hero MotoCorp’s plants in the state from our same facility,” he added.
Mukesh Mendiratta: “We have started scouting for land and aim to begin operations by end-2019."
Having entered India in 1983 with a technical collaboration with Nerolac, Japan’s Nihon Parkerizing, now a leading name in surface treatment chemicals for automotive applications is gradually strengthening its foothold in the country. The chemical manufacturer offers its range of water-based speciality chemicals in India, which are used for pre-treatment applications in the automotive, steel, forging and white goods industries.
Maruti Udyog, as it was known then, was the key enabler in spawning a completely new era in the Indian automobile sector by inviting Suzuki Motor Corporation into the country and opening the floodgates for global ancillary suppliers. It was, however, mandated that foreign companies could only enter the market along with a local player. Thus, it was only after 23 years, in 2006, that Nihon Parkerizing became a major stakeholder in its JV with Nerolac Kansai and later completely exited in 2012, independently setting up a new facility in Manesar.
The company has, since, invested close to Rs 100 crore over the years in the Indian market and is a key supplier to OEs including the likes of Maruti Suzuki, Toyota Kirloskar Motor, Honda Cars India, Mahindra & Mahindra and Tata Motors in the PV space, and also counts Ashok Leyland, Bajaj Auto, HMSI and Hero MotoCorp as its clients. It boasts of a 52 percent share of the market in the four-wheeler chemical treatment space, and a substantial 72 percent share of the two-wheeler industry, with Germany's Chemitall and Henkel being two of its major competitors.
Nihon Parkerizing also supplies to Tier 1 and Tier 2 automotive component vendors including JBM and SKH Metals. In 2017, it introduced its rust prevention oils specifically for the steel industry, which are today being procured by giants in the sector including JSW, Posco, JCAP-CPL and Tata Steel.
The company has a strategic agreement with Germany's Daubert Chemical to sell its ‘Nox Rust’ corrosion prevention products in the Asia Pacific region. Nox Rust, along with Nihon's ‘Cavity Wax’ is used in vehicles around their door hinges, door sills and the engine compartment areas to prevent corrosion.
Greener surface treatment
Metal surface treatment is a multi-step process, which is carried out before a vehicle enters the paint shop. The sequential process includes degreasing of the metal, its alkaline rinsing and phosphate treatment, all of which put together account for significantly large water consumption.
Targeting this excessive use of a highly precious natural resource, Nihon Parkerizing has developed its Parker Ultimate Lubrication System (PULS) technology for cold forging processes, which completely eliminates the need for phosphating, replacing it with shot-blasting and then immediately coating the surface with chemical.
According to Mendiratta, “The innovative process cuts down the industrial effluents considerably to almost being negligible, also bringing a 95 percent reduction in CO2 emissions and a shortening of the treatment process by up to 75 percent. Moreover, it brings down costs by up to 48 percent, thus proving to be extremely economical.”
As automakers look to enhance vehicle fuel efficiencies and adopt an increased level of lightweighting concepts, lighter metals like aluminium and composite plastics like carbon fibre are slated to see increased use in future products. While Nihon already supplies its chemicals for plastic treatment to majors like Varroc and Motherson, research and development are on to evolve its product line-up to make it future ready.
High level of local sourcing
Nihon’s sole facility in the country is in Manesar and spread across an 11-acre site. This unit has a monthly chemical producing capacity of 1,000 tonnes in a single shift, with its Nox Rust unit within the plant adding another 400 tonnes. For its bulk supplies, almost 95 percent of the raw material sourcing for production at Nihon's existing plant is being done locally, with the remaining constituents of the chemical formulations being brought in from Japan.
While Nihon Parkerizing India had posted net sales of Rs 85 crore in FY2016-17, its revenues have crossed the Rs 100-crore mark in FY2017-18, registering 14 percent CAGR from FY2012-13.
Nihon Parkerizing today holds a critical place in the chemical industry globally with the company having four technical centres in Japan with around 130 researchers dedicatedly working only towards developing newer technologies in the surface treatment space. The company also aims to open a technical centre in India by 2022 and enhance its focus towards developing sustainable solutions.
(This article was originally featured in the 15 April 2018 issue of Autocar Professional)