Machine tool maker ENRX sees EV boom as chance to expand business

Lodha sees a lot of potential for expansion, as every major business is moving towards India to save costs in the wake of inflationary pressures.

By Ketan Thakkar and Shruti Mishra calendar 11 Apr 2023 Views icon4183 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp

The global automotive industry is undergoing a significant transformation from internal combustion engine (ICE) vehicles to all-electric vehicles (EVs). The machine tool industry has an immense chance for growth thanks to the shift to EVs and the demand for more localised manufacturing, Vishal Lodha, Managing Director (India) of ENRX Group, told Autocar Professional.

Bengaluru-based ENRX, formerly known as EFD Induction, builds induction heating products and power products, but the world’s continued evolution toward a greener future—namely, anticipated declines in the production of traditional ICE vehicles—has this 32-year-old automotive machining specialist thinking hard about how best to adapt.  

As technical advancements change in the automotive industry, so do the requirements for adaptation within the machining and tools sector. After over three decades in business, rebranding is an important step to ensure your business' success continues, according to Lodha. 

In 2022, Norway-headquartered industrial induction heating expert EFD Induction acquired Germany-based inductive charging and power supply company IPT Technology, to form ENRX with an aim to speed up the journey to greener manufacturing and mobility.

“Since the beginning, we have had the experience of working with OEMs (original equipment manufacturers) and tier-I suppliers, and we have also established a good network across the globe. IPT Technology has the products, and about 1,100 patents in induction technology for wireless inductive charging for cars, buses, forklifts, ships, material movement equipment, and conveyor belts. Our integration will enable it to expand manufacturing capabilities and skill sets for scalability,” Lodha said. ENRX formally launched on 27 March, 2023, and the headquarters are based in Skien, Norway.

Lodha further highlighted that globally, only a couple of companies have such a wide range of inductive charging capabilities in the mobility sector. “This acquisition will put us in the league of the world's top companies in induction heating systems,” he added. Mobility is a prime area for ENRX, and IPT Technology has been a pioneer in this field. We are working towards wireless inductive charging of buses, cars, ferries, and trucks that requires virtually no maintenance,” he added. 

Additionally, the company can use the same technology in factories and warehouses to charge mobile equipment, robots, and vehicles. Another offering from ENRX is a contactless power supply, where power is transferred instantly to tracks used for everything from conveyor belts to amusement rides. “We are looking at the entire range, starting from electric highways to deep water charging and vehicle charging equipment," Lodha mentioned. 

ENRX is owned and backed by Arendals Fossekompani (AFK), a long-term investment company that focuses on energy and technology-related businesses for a greener economy. AFK is an industrial investment company holding several energy and technology-related companies that enable the transition to a green economy. AFK also owns and operates two hydropower plants in Norway.

In India, the company started its operation in the Attibele industrial area in Karnataka. It relocated to a new facility in KIADB Bengaluru Aerospace Park in 2017, which is 2.5 times the size of the old one.

Fulfilling global responsibilities from India 
While not abandoning its focus on dedicated, high-volume production lines for heavy-duty engine components, it is widening its scope of business. With a total headcount of 1,100 employees, the company has a turnover of Euro 135 million, and close to 15 percent of its top line comes from India. Currently, the automotive segment comprises 70 percent of its business, and the remaining comes from the industrial and renewable segments. 

Originally, ENRX’s main line of business has been induction heating equipment, and the company is supplying those machines not just for the Indian market but for the whole ASEAN region. In Asia, it has two big factories in China and India.

Lodha sees a lot of potential for expansion, as every major business is moving towards India to save costs in the wake of inflationary pressures. When asked if the China Plus strategy is pushing the company's diversification in manufacturing, Lodha said, “Certainly, but this move is not driven by COVID. For us, this has been the model for many years, and now we are ready to take on much larger global responsibilities from India. We are a Rs 140 crore company in India and as our customers are expanding their businesses here, it requires us to make the investments in India,” Lodha said. Notably, India is the third largest market for ENRX in terms of top line and profitability after Norway and China.

As per Lodha, cost arbitrage and access to highly skilled talent remain the two biggest rationales for carrying out the manufacturing process in India. “Cost arbitrage can range from 30 percent - 70 percent, which allows us to be more competitive. We have raised a good level of standardisation within the group in terms of designs, drawings, and the quality of machines,” Lodha highlighted. 

Till 2020, ENRX's total turnover was limited to Rs 90-100 crore. The machine tool market declined about 20 percent in 2020, as the world battled the COVID-19 pandemic but rebounded significantly in 2021, as most economies looked to reopen.

After the re-opening of markets globally and the return of normalcy in the automotive segment, the company saw substantial growth in the last two years. With the opening up of new avenues in the EV segment post-integration, the company is targeting to touch Rs 175 crore in turnover in India by 2025.

“Each piece of equipment is a new opportunity for us as we make customised and made-to-order machinery. We are looking to touch Rs 160 crore in revenue in 2023, which will keep us on track for meeting our target. In our case, the lead time is much less than the time it takes to develop a small part of the process, therefore we are working on competency and skill building. We have seen strong double-digit growth in the last three years and hope to achieve the same in the coming years as well,” Lodha added. 

Post-integration, the company will start entering the European market with new products by 2024, and the products will be available by 2025. With the new makeover, ENRX aspires to reach the same size as the existing portfolio by 2030.  

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