With a 20-20 vision, Sahasra is all set to go much ahead of the curve

Starting out in Noida SEZ as a standard design factory with just 12 people in 2000, Sahasra Electronics has grown manifold, and today boasts of four manufacturing locations, overseas presence in several countries, and the ability to retain its key employees

By Srabani Sen

Monday, August 13, 2012: Twelve years ago, the company’s launch was timed to coincide with the start of the new millennium, with the name Sahasra, which means ‘millennium’ in Sanskrit. It was an audacious move, because at that time it was almost unheard of for an electronics manufacturing services (EMS) company to start operations on Indian soil targeting only exports. Twelve years down the line, the company is proud of the fact that it has succeeded in this seemingly impossible mission, which has turned out to be the prime factor behind its sustainability.

Regarding Sahasra Electronics’ export focus, its young and dynamic director, Varun Manwani says, “It’s been our success mantra all throughout because exports give you exposure in terms of technology, better returns, and compel you not only to follow international standards but raise the quality bar within the organisation as well. For example, we comply with IPC standards and that keeps us ahead of other manufacturers in India. We have hired an IPC specialist and have certified IPC trainers in the company because of our customers, who have motivated us to take them on board as they demand better quality products.” (IPC is an international electronics body that develops standards for the electronics industry).

The journey so far

Amrit Manwani, now the chairman of Sahasra Electronics Pvt Ltd, is best known as a visionary and an innovator. An electronics engineer from IIT Kanpur with an MBA degree from the Faculty of Management Studies (FMS), Delhi, Amrit quit his job as president of GE-Fanuc in 1990 to start his own business. He began by manufacturing printed circuit boards (PCBs) and did fairly well due to his contacts in GE, his western style of management, and the export orientation of the business, despite the fact that the PCB industry was never really a success in India.

Sahasra commenced its EMS operations in 2001. What it could not achieve in the PCB industry, it achieved a hundred times more in the EMS business. Today, the group comprises of four businesses—EMS, PCB fabrication, LED lighting and value added services—provides end to end electronics solutions, from design and manufacturing to distribution. Cable assembly, plastic and metal boxes, PCB design, value engineering, systems assembly, warehousing and third party logistics are some of the value added services offered from a manufacturing perspective.

“We started in the Noida SEZ at a standard design factory (SDF), with just 12 people. Today we have four factories (including one in Rwanda, East Africa, spread over 8800 sq m, to manufacture LED lighting products), over 325 employees and nine sales and marketing offices in USA, Europe, Canada, Africa and India. So we have our footprint in all important geographies and markets across the world,” informs Varun, who joined his family business in 2001 after completing his graduation in economics.

After starting the EMS business as its core activity, Sahasra took on backward integration and started manufacturing PCBs in 2005. “Earlier, we used to buy PCBs from different Indian companies, but they could never deliver on time, eventually delaying our deliveries. Hence, we decided to manufacture our own PCBs,” says Varun.

The company’s investment in a PCB plant in the Noida SEZ helped it control its product quality, meet its internal demands and also make prototypes for its customers. In fact, it could help its customers reach the market much faster.

In 2009, Sahasra made two strategic investments—it took over a domestic sick unit, InfoPower, and ventured into LED lighting product assembly. InfoPower manufactured PCBs, and its revival helped Sahasra to get into the domestic PCB business. Today, Sahasra supplies PCBs to both the domestic and export markets.

As part of the new vision the company has charted out, Sahasra has earmarked LED lighting as one of the key areas that will fuel its growth. So it has invested in making metal core PCBs, for which it also made investments in machinery, and went for UL approval. “Today, in India, almost every company that requires metal core PCBs in their lighting products, uses our metal core PCBs,” says Varun.

LED lighting products, assemblies and services comprise 25 per cent of the group’s total turnover, and will be a major contributor to its future growth as well, believes Varun. Sahasra has been working with several OEMs, LED and luminaire manufacturers to innovate new products to make LED lighting technology more acceptable and affordable. It is an Osram LLFY and Lumiled’s FLS partner in India, and is working with companies in automotive lighting, general lighting, emergency lighting and many other verticals.

Strategic decision to cater to domestic markets

In 2010, for the first time, Sahasra started catering to the domestic market, the turnover from which grew to 10-12 per cent of its overall business by 2011, and by 2012 end, the company aims to achieve 20 per cent growth. This conscious decision has been taken based on three factors—first, Sahasra believes that the domestic LED market is booming more than the export market as worldwide, the economy has slumped; second, because of the volatile exchange rate; and third, many of its MNC customers have set up business in India, and they want Sahasra to serve them in India as well.

Many hurdles crossed

Sahasra, like any other startup, faced quite a few hurdles in the early days. Unlike today, when the entire world talks about India as a manufacturing hub, at the start of the millennium, the world didn’t actually believe this was possible. So, till 2008, the company had to really struggle for global recognition. It was a difficult journey, as India as a brand was not recognised.

Overseas, Sahasra had to compete with companies from China, Eastern Europe and South America. “It was very difficult to compete with them. China already had a brand name, eastern Europe was preferred by European customers and South America by North American customers,” recalls Varun. However, Sahasra overcame all these challenges with sheer hard work of the core team, smart strategies and the right decisions taken at the right time.

The decision to set up offices in the US, Canada, Africa, etc, helped its international customers to develop confidence in Sahasra, and also helped the company to understand the culture, language and economy of different nations. Sahasra also acquired the business of one of its US distributors, which had become sick, it retained its original name—Optima Technologies Associates—which now operates like a US based Indian company.

Strengths and weaknesses

Varun feels that the strength of the group is its footprint in a number of countries with local offices. Also, its core team of eight people has been with the group right since its inception. Having the right people on the team is the key to success in business. Nobody knows this better than Varun, who joined his father’s business at a time when there was no one else to help him at the initial stage of the business. “The key employees have been with us since the start of the company. We have overcome the challenge of retaining people by inhouse training. We have also tied up with ELCINA to provide knowledge management training to our employees. And this is how we have nurtured the skills of our people,” says Varun. The suppliers and 95 per cent of its customers have also been loyal to the company. Retention has, thus, been the strength of Sahasra.

Continuous investments in the company, and working with customers to fulfill their requirements have been the other factors behind the company’s sustainability. “Whenever we felt the need to invest in a new technology which would benefit our customers, we went ahead. We have always been realistic, yet at the same time were always ahead of the curve. In the last 12 years, there was never a year when our turnover dipped, except 2008, when the global economy slumped. Otherwise, we have maintained average annual growth rate (AAGR) of 20-40 per cent,” says Varun.

Talking of the weaknesses the company faces, Varun admits that Sahasra could have grown even faster if it had a larger team to handle more areas. He also believes that if the company had decided on forward integration much earlier, it could have grown even bigger and faster. “As an EMS company, we never made a final product. To overcome this mistake, we are now manufacturing LED lights. If we had produced final products earlier, we could have grown even faster,” says Varun.

Manufacturing: Sahasra’s forte

The group has three manufacturing plants in Noida, and, New Delhi, and one in Rwanda. With a group sales turnover of Rs 560 million and an entrepreneurial vision, Sahasra is all set to grow from strength to strength.

The group has two PCB fabrication facilities, both ISO 9001:2008 certified, which help in meeting captive demand as well as serving other EMS and OEM companies. From PCB design and prototyping to volume production, its PCB operations are flexible enough and serve a variety of big and small customers with varying requirements.

The company has invested heavily in state of the art equipment for manufacturing PCBs right from S/S and MCPCBs up to 10L boards. It also has three SMT lines. The boards are fabricated to IPC standards, and meet ROHS and REACH regulations. The PCB facility has the distinction of being the first UL approved metal core PCB fabrication facility in India for LED lighting applications, besides having got UL approval for FR-4 boards.

Plans for the future

By 2020, the Sahasra group plans to grow into a Rs 5 billion company, which will be fuelled by both its EMS and LED lighting businesses. The company has chalked out major plans for this growth. It also has two stakes in the cluster that ELCINA is coming up with in Rajasthan—as a manufacturer and a skills developer. Based on the success of the plant in Rajasthan, the company will decide to move to south India, and based on the success of the Rwanda plant, it will penetrate into other African localities.

“We look at expansion in three ways—by acquisitions, joint ventures and by entering into new markets and new geographies. We want to explore more countries. We are also open to joint ventures, whether in the EMS industry, lighting industry or in PCB manufacturing. We are talking to a few companies and also trying to penetrate the defence segment,” explains Varun. The company has been eyeing this sector for long. As per government policy, an MNC supplying to the defence sector needs to manufacture 25-30 per cent of the finished defence product locally. Countries like Israel and UK, which supply to India, would require Indian manufacturers. That is what Sahasra is banking on. In the lighting business, it is in talks with a couple of companies, exploring options that will fuel major growth within Sahasra.

In December 2011, the company ventured into the education and skills development domain, and set up a new company called Sahasra Sambhav Skills Development Pvt Ltd. Harnessing its expertise in electronics, this skills development centre will not only train freshers coming out of colleges with hands-on practical knowledge, but also place them in different industries. With fully equipped lab facilities, the course offers a complete package—content development, training and placements.

The company is also banking on its strategic move to manufacture in Africa because in the LED lighting business, Africa could be the next big market after India and China. The group is always open to investing in new countries and in new products.

“Growth and transition are inevitable processes. We are doing it while still retaining our entrepreneurial spirit, which results in doing things fast and taking calculated risks. This vision percolates down from Amrit Manwani,” says Varun, who handles operations. The culture of decentralised risk taking is, to a large extent, responsible for the group’s success.

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine