Saturday, August 16, 2014: Starting out in 2000 at the Noida SEZ as a standard design factory with just 12 people, Sahasra Electronics has grown manifold, thanks to the strategic business plans of its managing director. With no entrepreneurial background or a godfather to promote him, he proved his mettle in the electronics industry with sheer optimism and courage, which helped him to tide over all difficult times. Meet this self-made man, Amrit Manwani, managing director and chairman, Sahasra Electronics. In a freewheeling interview with Richa Chakravarty of Electronics Bazaar, he narrates his story—of struggles that led to success
I was born in 1951 into a small family in Udaipur, Rajasthan. My parents were refugees from Pakistan, and had their share of hardships during the Partition of India. So, I grew up in an environment in which my family was struggling to establish itself in Udaipur.
My father, Narayandas Manwani, owned a sweetmeat shop in Udaipur. Since neither of my parents had the opportunity to study, there was never a major focus on education at home. My elder brother and two elder sisters also did not nurture an interest in studies. But somehow, I had been very keen on education since childhood, so my father admitted me to St Paul’s Higher Secondary School in Udaipur.
I was quite studious and developed an interest in maths and science. While other kids played after returning from school, I always used to study. My mother, Padma Manwani, was very concerned about my excessive interest in books and used to warn me that I would end up wearing glasses at a young age. However, she used to take a little extra care of me—maybe because I was the youngest or due to my long hours of study.
How I developed an interest in engineering
When our house was being constructed in Udaipur, I used to sit for hours and watch the electrician at work. The colourful wires fascinated me and roused several queries in my mind. Suddenly, I wanted to study the functions of these electrical wires; so I shared my desire to study engineering with my elder brother. He was taken by surprise to learn about my wish to study even further. For him, I had studied enough, and ought to soon join our family business.
Destiny had other plans for me. I passed high school with flying colours and qualified to join the electrical and electronics engineering B Tech course at the Indian Institute of Technology (IIT), Kanpur. While my mother was terrified when she came to know how far Kanpur was from Udaipur and that I had to travel for 36 hours, something that was unthinkable for her, my father supported my decision.
L&T: My training ground
Although I excelled in school, I was just an above average student in IIT. I struggled to keep up to the expectations of my professors. By the time I completed engineering, I was exhausted with studies. I was in a dilemma over whether to join the Indian Institute of Management (IIM), Kolkata, or look for a job.
So when I was selected by Larson and Toubro (L&T) through the college’s placement cell, the choice was obvious. I joined L&T in 1972, and surprisingly, I got the opportunity to work in my dreamland—Mumbai. The very thought of living and working in Mumbai was very exciting for me. It was a unique experience.
I was a trainee in L&T for two years. On completing my training period, I was absorbed into the marketing division of Hindustan Brown Boveri, a company partially acquired by L&T in 1974. In 1977, I was transferred to the Delhi branch of L&T, in the same division.
My marriage—a turning point
During my stay in Mumbai, I met Varsha, my life partner. Being a Catholic, my orthodox parents considered her as someone from ‘out of the community’. But I was adamant about marrying her. So it took me a good three years to convince my parents. Finally, when they hesitantly bowed down before my determination, we tied the knot in 1978. Those three years were a learning phase in my life, as I realised how deep-rooted and strong our traditional values were and how difficult it is to break them. But I must admit that those three years made me more mature and strong. Also, life took a different turn–leading us on a better course.
My stint with GE
Varsha proved to be lucky for me, as within a few months of our marriage, I was offered an opportunity to work for GE in Delhi. In 1978, I joined the multinational firm’s technical international marketing programme and got several opportunities to travel overseas. Observing the work culture in different countries helped to widen my horizon.
While I was on cloud nine, I suddenly lost my mother, which left a void in my life. My father then came down to live with us. At GE, I performed quite well, and from the position of a project manager I rose to become the vice president of GE’s factory automation firm, GE Fanuc, at the age of 36.
While I was in GE, I had an opportunity to attend a training programme for senior managers at GE’s training centre in Crotonville, New York. There I met Jack Welch, who was then chairman of GE. He is an amazing person and encourages people to become entrepreneurs ‘within their jobs’. That sowed the seeds of entrepreneurship in me, and I started thinking seriously about starting my own business. In 1989, when I was the president of GE Fanuc (a leading Japanese automation company), I suddenly hit upon an idea for what my own venture could be about.
My plunge into entrepreneurship
In 1990, along with two other partners—a colleague from GE and another from L&T—I started the manufacture of printed circuit boards (PCBs). We bought a company called SARK from four engineers and prepared a project report to raise capital from financial institutions. That report sought Rs 55 million as initial funding, which was a huge amount in those days.
Arranging finance for my first venture is a unique story in itself. Considering my professional background, the financial institutions trusted our project. But the amount we were asking for was huge. I knew an Indian financer in Moscow who traded in India. I had met him when I was with GE. He liked our project and agreed to invest some funds in it. Even then we were falling short by about 20 per cent of the project. We then approached the UP State Industrial Development Corporation Ltd (UPSIDC), which agreed to invest Rs 2 million. That still left us well below the actual capital needed. So we went to the Risk Capital Technology Corporation (RCTC), which was a wholly owned subsidiary of IFCI and was known for supporting technical entrepreneurs with risk capital funding. RCTC put in what we needed. Next, we approached a Taiwan-based company that I had interacted with during my days with GE. The firm agreed to support us technically and became our technology partner.
We raised Rs 12 million in this manner but were still far short of our target. We then approached the three central financial institutions—Industrial Credit and Investment Corporation of India (ICICI), Industrial Development Bank of India (IDBI) and Industrial Finance Corporation of India (IFCI). These three institutions jointly funded us, putting in the balance required as preferential shares. Yet, we could not meet our target, so the three financial institutions put in money in exchange for preferential equity. That’s how we managed to collect Rs 55 million.
Then began the search for land to set up our facility. The deputy CEO of the Noida Authority at that time knew me well and agreed to give us land covering 3300 sq m. Things fell into place and we conceived the project in late 1988. We built the plant within a record time of 16 months. Though I had started the plant, I could not join my company as the GE Fanuc project was yet to take off and the country manager had requested me to stay on until that happened. Hence, I delayed my exit from GE and finally joined SARK (the new GE company) in February 1991; we started production from the very next month.
Success of my first venture was short lived
As the saying goes, we had the beginners’ luck. We managed to arrange the capital on time, and also broke even within two years. In 1993, the market for PCBs was majorly driven by C-DoT. But, once the telecom market opened up to worldwide competition and C-DoT crashed, the PCB business in the country was severely affected. Demand for PCBs virtually collapsed, as 85 per cent of it was coming from the telecom sector. So the prices of PCBs fell from Rs 9000 per sq m to Rs 3000 per sq m. A lot of the PCB companies had to close down.
We struggled hard to survive. The period from 1993 to 1996 was the toughest for us. We could not pay our interest dues to financial institutions on time, our collaborators backed off, and we were in debt. Due to my experience in foreign markets, we turned our focus onto exports, and hence survived. By 1999, we had cleared all our debts.
By this time, I had started developing an interest in PCB assembly as I could foresee a huge boom in this vertical. I knew that we could become big by trying our hand at PCB assembly, but my partners did not share the same vision. So, I left the company to start my own venture. However, I did not take out my investments from SARK, though I was the second largest equity holder in the company (next only to the financers).
Birth of Sahasra
In 2000, I rented a small place in the Noida Special Economic Zone (NSEZ) to start a new company. I also rented a standard-design factory (SDF) unit in a multi tenanted building (there were around six such multi SDF buildings within NSEZ). This is how Sahasra Electronics was born. It started off as an electronic components trading company, and within 12 months I realised that there was immense potential in this space.
I soon applied to the NSEZ for registration to begin manufacturing as that could give me several benefits for exports. So, while Sahasra Electronics continued with the trading, in June 2001, we floated Sahasra Electronics Pvt Ltd to start production. Within three months, I started production with a bare minimum of investments and with just 10 people at the manufacturing unit in the rented SDF. Later, I rented two more SDFs. Between 2002 and 2004, we bought PCBs from local manufacturers and assembled components on them in our unit.
My next objective was to set up the unit on our own land. I approached the NSEZ authorities, and based on my track record, they offered me 2000 sq m of land from where I started operating the Sahasra Electronics’ plant. I did not take any loan for setting up this manufacturing unit. From the very beginning, we started doing good business. In fact, we went ahead and bought a 65 per cent stake in a client’s company—Optima Technology Associates, which is a front end engineering company in Pennsylvania, USA. We also asked the company to buy a 15 per cent stake in Sahasra. From thereon, we started growing from strength to strength.
In 2006, the labour at Shogini Technoarts went on strike. To meet the order commitments, I approached SARK, which also could not deliver on time. These hardships compelled me to think of manufacturing my own PCBs, as I could not rely on just one supplier. So I started PCB manufacturing from the SDF unit in 2006 and named the new company Nano Electrotech Pvt Ltd, which is wholly owned by Sahasra Electronics.
In 2007, SARK merged with a company called Infopower Technologies Ltd. Later, the company’s promoters approached me to buy Infopower Technologies Ltd. At that time I was toying with the idea of entering the domestic market as well, so it made sense for me to buy the company. Although the company had made losses of around Rs 35 million, I bought it as I was confident of turning it around. It took two years of negotiations, paying off debts, etc, before we finally acquired the company in June 2010.
Exploring LED segment
My first experience with the LED market was when we received a big order for PCB assemblies for LED indicators from a US-based customer. In 2008, I received another order from a Texas-based client to make the electronics for 5000 LED streetlights and also to assemble the products. Realising the potential market for LEDs, I plunged into this segment. We designed and developed this product along with IIT Delhi. We also approached the National Institute of Design (NID) to add value to it. NID also partly funded the project.
Seeing our work in the LED segment, the NSEZ authorities approached us to develop LED streetlights for them. All the streetlights in the NSEZ area have been manufactured and installed by Sahasra. It has been four years and the streetlights are still working well.
In 2012, we wanted to introduce LED lights in India in a big way. But we realised that neither did we have the bandwidth nor the experience for the extensive distribution of the products in the local market, as our focus was more on exports.
In the same year, we bagged a large project from Philips—the company wanted us to do the electronics for its LED streetlights and downlights. However, one of the clauses of our contract with Philips barred us from launching our own brand. But due to this project, we could bag other LED projects from Osram, GE, etc.
By now I wanted to explore the international LED market. So, in 2012, I set up a company in Rwanda in East Africa. It is almost one-and-a-half years old and we have broken even. This year, we plan to start manufacturing from this unit too. So far, we have only been trading in lighting products across East Africa. Recently, we received a Rs 15 million order for a hotel project in Rwanda.
My management style
My working and management style has been largely influenced by the two companies I had worked for—L&T and GE. I believe in delegating work. This way, you not only get more time to do focused work, but also give others the opportunity to show their talents. This goes with the second important aspect of my management style—motivation. When I rely on my people, I need to motivate them to achieve high goals. So I give my subordinates freedom and authority but, at the same time, they have their targets and deadlines. All targets and deadlines that are achievable automatically motivate them to aim for higher goals.
The initial years after I started my business were very tough—first, to get established and then, to survive in the market. My work required extensive travelling, almost 185 days a year. Hence, I could not give enough time to my family—my wife and my two sons, Akshay and Varun. I did sacrifice a lot of my family time to establish my business, so sometimes I do regret not seeing my children grow up. But I could do this only because of my wife. She not only filled the void created by me, but also instilled great values in my sons, which they still live by today.
My elder son, Akshay, worked for Reliance Insurance for a couple of years. He then joined the family business but never had an inclination for business. He loves writing and has made that his profession, having settled in Mumbai. His latest book, ‘Sahir Ludhianvi: People’s Poet’ has been nominated as one of the best books on Bollywood.
My younger son, Varun, joined me soon after completing his studies in college, at the age of 21. He has been in the business for 12 years now, and has supported me throughout that period. He plays a significant role in the growth of the company. Today, my family is complete with Akshay having a daughter and Varun a son.
We have started a skills development company called Sahasra Sambhav. It is a certified training partner of the Electronics Sector Skills Council (ESSC), which is aligned with the National Skills Development Corporation, a Government of India initiative. We provide training from the manufacturing point of view to students. Presently, we are training 100 students from Kerala. We are also training a batch of 40 engineers from an engineering college in Ghaziabad. Taking this skills development business forward and helping the industry with more and more skilled hands is a focused plan.
At the moment, I do not intend to retire. By 2020, we plan to make Sahasra grow into a Rs 5 billion company, which will be fuelled by EMS and LED lighting businesses, and we have chalked out major plans for this growth. I also want to take our business to new countries and may explore joint ventures, whether in the EMS industry, lighting industry or in PCB manufacturing.
I want to see the Indian electronics industry grow and become one of the global manufacturing hubs for electronics. Till then, I want to be an active part of the industry. I am actively involved in ELCINA and occasionally suggest ideas to DeitY to enhance manufacturing in the country, and I will continue supporting them in every way I can.
What I would like to change…
|In this world:||Make it more green|
|In the country:||The current political system. I would like to see more economic growth in the country|
|In society:||Build a corruption-free society. We, as citizens, should also work towards this rather than just blaming ‘the system’|
|At my work place:||The negative mindset of the people. They should enjoy their work|
|In myself:||The tendency to get stressed|
|THESE ARE A FEW OF MY FAVOURITE THINGS…|
|Holiday destination:||Any interior part in India, preferably rural destinations|
|Political/ historical figure:||Mahatma Gandhi|
|Role model:||Mahatma Gandhi and Jack Welch, former chairman and CEO of General Electric|
|Book:||Atlas Shrugged by Ayn Rand|
|Song:||Ajeeb dastan hai ye by Lata Mangeshkar|
Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine