With the demand for batteries growing hugely, Bangalore-based Base Batteries is preparing for future capacity. Already facing a capacity crunch, the company is now vigorously expanding with a new 180-acre manufacturing facility in Hosur, near Bangalore. Its existing plant at Solan in Himachal Pradesh is proving to be too small to cater to existing demand. With a projected capacity of 175,000 batteries per month in the initial phase and a full capacity of 325,000 per month, the all-new Hosur plant could just be the answer to Base’s supply troubles.
When fully constructed in around 18 months’ time, this plant will become one of the biggest battery manufacturing facilities in South East Asia. Technical tie-ups have been signed with individual consultants from around the world to develop battery technologies for various industries. The company, which makes a wide range of batteries for passenger cars, two-wheelers, tractors and trucks, is also looking to enter specialised areas by developing batteries for products used by the railways, Indian Navy and the telecom sector.
At present, Base’s sales are routed directly to customers through its aftermarket division, 32 branch offices (called Base Terminals) across India and 7,000 dealers. Base has a 2.1 percent market share with a turnover of around Rs 600 crore; the market leader in India is Exide Batteries.
Once the Hosur plant starts production by end-2012, supplies will be made to OEMs keen on supplies from that plant. As of now, Maruti and Chevrolet have expressed interest in buying Base’s products. “At the managerial level, restructuring needs to be done before we can start sales to OEMs. We will ideally look at creating a division where OEMs will be supplied from Hosur and the aftermarket will be catered to from Solan. This internal division should happen before the Hosur plant starts production,” says Aditya Arora, chief operating officer.
Established in 1987, Base Batteries began operations by supplying UPS batteries to software developers like Infosys and Wipro. After a decade or so, a deal was signed with Panasonic batteries for Base to be its trade partner in India. Subsequently in 2006, Base began manufacturing operations of its own at Solan.
Along with the capacity crunch at Solan, other issues like the mountainous topography, paucity of trained manpower and logistical difficulties have pushed Base to set up the Hosur plant. The decision for the new unit was taken in early 2011 and at present, construction is underway. Company sources say that the facility should be up in another six months and machinery is en route from countries like USA, China, Korea and Japan.
Barely 40 percent of the 180-acre facility is being used in the first phase. According to Aditya, the company plans to maintain organic farms in the remaining area to offset the pollution caused by the manufacturing of lead-based batteries.
While the initial workforce would stand at 2,000 workers, an additional 1,500 workers will be employed by the end of the 18-month period when Base Batteries plans to take the Hosur plant to its full capacity.
Developing Velocity
Base’s product range in the passenger car and tractor segment extends to around seven to eight technologies with as many as 128 variants in terms of size and capacity.
Now it is developing a new battery. Aditya says, “Within two months, a new battery called Velocity will hit the market. It is meant for premium cars, upwards of the Skoda Octavia and Laura. The process from ideation to prototyping has taken six months. While manufacture of Velocity will start by the middle of May, it should hit the market by early June,” reveals Aditya. The R&D for Velocity was done in-house with around five percent (Rs 30 crore) of Base’s annual turnover earmarked for this.
"I have to sacrifice the production of three other models to produce the required units for Velocity. We expect revenue of around Rs 20 to 30 crore for Velocity each year and sales of around 40,000-60,000 units,” adds Aditya.
“We’re also customising a few of our existing tractor batteries to make them more economical and increase their life,” he says.
Trading places
The Rs 28,000 crore battery market was largely unorganised a few years ago, with the organised sector comprising about 30 percent of the market in India. Now, with the advent of modern technology for production and automation, the balance has tilted heavily towards the organised sector, with 31 percent making up the unorganized sector and falling.
Aditya says that Base Batteries was the first company in India to launch a battery that used VRLA technology as far back as the 1980s. “Valve regulated lead acid batteries are mainly used for inverters and UPS systems. These are sealed, ready to fit and maintenance-free batteries,” he says.
Base’s contribution to the hybrid pot has been significant. “We’ve been bringing out hybrid batteries which significantly reduce the amount of fumes by tweaking chemical compositions. We’ve also brought certain technologies from Panasonic to India. Our long relationship with the company has enabled this. Our biggest achievement has been in customising these imported technologies to the Indian conditions,” he signs off.
On the HR front, like most automotive companies, trained labour has been a scarce resource for Base Batteries, which has done its bit for the locals in Himachal Pradesh. “At our Solan plant, we have dormitories that house 400 of our 600 employees. We have built schools and other educational facilities to help their children,” says Aditya. He rues the fact that once trained, many workers leave for better prospects but adds, “We plan to provide educational scholarships to the children of our Hosur employees and nurture them. If they come to us after graduating, we can provide them with training and hopefully that loyalty should make them stay. There is no ready graduate available in the country who has studied battery technology. So, we source our fresh employees from Tier II colleges so that they have a basic understanding of the field and then we train them.”