What drives a global business to invest in a manufacturing unit in India? The crucial factors include healthy local demand, and the aim to support customers with ease. Ross B. Berntson is the president and COO of Indium Corporation, and Jonas Sjoberg is its technical manager. The company manufactures, refines and produces indium and indium compounds. In an interaction with Rahul Chopra of Electronicsforu.com Network, they talk about their latest investments and business expansion plans. The two also share how Indium Corporation is set to strengthen its presence in the Indian market through its new manufacturing facility.
EB: For how long and in what ways have you been doing business in India?
We’ve been doing business with India since the ’70s, which was pretty early in our company’s history. Indium Corporation was founded in 1934. Ours is a materials company. We have supported the electronics industry for many, many years with different solder materials. Right now, we are commissioning our factory in Chennai. The telecom and satellite industries in India use many of the specialty materials that we produce.
EB: Does your essential sales model involve direct selling, or do you also have distributors in India?
We have a partner in India, MEL Systems & Sevices Ltd, which is very well known in the country. We have a global footprint, with 13 factories, and sales teams around the world. We are one of the highest quality solder paste suppliers. We got that reputation by having the right certifications and a long track record of product quality. That’s helped us get into markets that are very, very demanding. These include automotive, which requires very reliable processes and systems, and mobile phones, which need high-precision materials as well as consistency because these firms make their money on high volume production.
These are some of the things that make us a strong supplier to the emerging market in India.
EB: So you’re in the low- to mid-volume as well as the high-volume sectors?
Yes. We have the ability to bring to fruition any new idea—all the way up from low-volume production to high-volume production.
EB: How do you see technologies and material properties changing, and how are you upgrading yourself to stay in sync with the changes?
We believe that materials science changes the world. What that means for us is that as technology advances, we need to bring in new materials. And new materials sometimes enable new technology advancements. For example, in automotive as well as a lot of other industries, the bottom termination components are becoming more and more common when you have that ground pad at the bottom of the component. Those bottom termination components are difficult for voiding. So we have our ‘Avoid the Void’ solder paste called Indium8.9HF, which was developed to reduce voiding in these advanced components.
EB: Are most of your discussions with the technology teams within companies or do you also talk with the purchase department?
It’s mostly with the technology teams. We can create the best value when we bring our engineers to our customers’ factory floors. We try to bring the customer’s factory experience right back to our own R&D and engineering staff so that we can design the best products for the customer. The ability to do that across many niche markets has resulted in a lot of diversity in our product portfolio. We’ve been able to scale with some of the largest companies in the world.
EB: So how do you create the opportunities for the engineers from Indium and the client company to interact?
We get invited in. We want people to find us because we have the best insights into a customer’s need. We initially push in with our sales team that’s creating awareness about our offering. We follow technology trends and we’re a member of associations like IPC, SMTA, IEEE and ELCINA. So we can see trends emerging years before they happen because we’re working with these technology organisations.
If one company needs products for particular markets, then it implies that four or five other companies also need it. By engaging with that first company, we can make others aware of this ability to improve. There’s always a way to solve their problems. We bring our methodology, and if it’s the right one, we aim to be honest brokers of that technology and help customers adapt.
EB: What’s the latest technology trend that you are noticing in semiconductors?
Wide bandgap (WBG) semiconductor devices are a big trend. But what do people need with WBG semiconductors? What’s the technology innovation? They need to be able to have new die-attached materials. They need to have thermal management materials. We are investing in understanding those applications. So when someone interested in WBG looks for a solution, they can come to us since we have already done some of the preliminary work. Then all we have to do is modify things to a specific customer’s needs.
EB: You mentioned that Indium Corporation has 13 manufacturing facilities across the world. Is the R&D division headquartered in the US?
We have an R&D centre in the US at our headquarters in Clinton, New York. We also have an R&D centre in China, and a smaller one in Chicago. Those are our core R&D hubs for our organic chemistry and flux systems. We also have metallurgical development going on at two sites in the US.
EB: The manufacturing setup that’s required to produce these materials—is this done by your own team, or do your partners provide you with that?
We innovate on our own manufacturing systems. We have quite a dynamic group of people working on new automation techniques – on new ways to not only manufacture the feed materials like powder and flux, but also on how to package, label and bring these to our customers. One of the interesting things about these materials is that when I look at an assembly line, I don’t just see a range of equipment and mechanical devices. I view the entire setup as a chemical reaction. When you look at it like that, you see things completely differently. We need to have a material that is stable and can handle the pressures it will be subjected to, like in the case of micro LEDs right now.
Micro LEDs require a different kind of material property than traditional LEDs just because of how they’re assembled. Being part of the industry associations I mentioned earlier helps us see those things, and then we can evolve along with these changes as a technology developer and build our manufacturing techniques to match industry demands.
EB: What led to your setting up a manufacturing unit in India?
The big trigger was our customers. We have always been a privately held company. So while we’re not the most aggressive firm, this makes us more stable and a strong partner to our customers. Our customers are growing phenomenally here.
We know that solder paste is a perishable material and so has a limited shelf life. The flux is very stable as a standalone and the powder too is very stable. When you blend them together for optimum performance, you want it to be fresh. And we now can produce very fresh products for our customers here in India.
So that was the trigger, but it was really our customer research. We wanted to be in India with our customers so that we could ship requirements directly. Yes, we might have to truck these. But that’s much more predictable than shipping them by air or by boat.
We’re proud to be part of the Make in India drive. We think we have the right materials for this market. And we’re ready to get started, whether it is in automotive, mobile phones, aerospace or telecom infrastructure.
EB: Any other challenges that you have encountered while setting up your business in India?
From a business point of view, it has been a very easy and consistent start. There are some unique rules in India that we’re not used to elsewhere. So we’ve had to navigate those. And that’s created some challenges. But I’m very proud of how fast we’ve been able to get things done.
EB: As for the new corporate tax policy, will you be able to enjoy the 15 per cent benefit or will you come under the 25 per cent slab?
We’re checking on that. We think any government policy like this is a time stamp that typically will drift back and help people who are investing.
EB: What will be the strength of your team at this new facility?
I don’t think we’re going to have huge staff strength at this location. It could probably grow to about 15 to 20 people, eventually. Right now, we’re starting off with a pretty small team.
EB: Do you think finding new talent will be a challenge?
There’s a lot of talent here. A lot of applications came in during our hiring process. We had more than 2,000 resumes coming in when we were hiring a technical manager. This was a challenge because these had to be filtered. My team members or I go through every resume. So, we had to adopt a different process because, normally, we receive around 100 applications.
EB: How has your growth been in India so far?
Our growth figures have doubled. We have been getting a lot of traction for the past four or five years. That’s one of the reasons why we’re setting up a facility in India and are in touch with all the customers. With the help of the Make in India programme, things started to fall in place very fast. Our market share with our customers in Chennai went from 5 per cent to 40 per cent in a matter of six months. So, that’s how fast the growth is. This equated to more than 30 additional lines with these customers. The sectors that contributed most to that growth were automotive and mobile phones.
EB: Do you see India improving its talent pool and overall electronics ecosystem? If so, what’s driving these improvements?
I think there are two things that are helping. First, there are competencies here of all the engineers and managers who have been educated in the UK or the US. Things are now changing. A lot of people want to come back and settle here for work or for family reasons. I think the trade war is helping. In the Noida area, Oppo wants to ship phones to the US. And so is the case with Huawei and Xiaomi in the south. So the trade war has helped us a lot, in addition to Make in India. We look at India next after China.
EB: Are there any further investments or expansion plans, going forward?
Yes. Three to five years down the road, we plan to do something else. If the model of setting up a manufacturing facility in Chennai works, then we might be expanding further. And there could be many other product lines in India. Right now, we’re taking baby steps.
In terms of product portfolio, I think next year there will be an initiative to move into semiconductors with sensors or modules and flexible circuits, as well as MEMS devices. Right now, it doesn’t make sense for us to produce semiconductor materials because the market is very slow. But once the Make in India momentum reaches sensors and other kinds of devices, we will need to expand our product portfolio.
EB: Can you give us some idea about your manufacturing setup?
Machinery wise, it’s fairly simple, with one setup running, in which flux and powder is put into a mixer. We have two mixers at this facility, both of which are automated, and run on a certain program. That’s the main equipment. But we have a lot of quality tools to measure the properties of materials. All the machines go through a lot of certification processes. Our QA team in the US qualifies every machine that’s going to blend the materials.
EB: Has the entire team here also been trained locally, or are there people from your headquarters that are going to be working here?
Most of the staff in the factory comprises affiliates from Singapore. Some of them are from the US. They’re bringing that knowledge to be shared in the Chennai unit. The setup we have in the US is replicated in Singapore, China and India. If all these global standards are not met, then the products are not allowed to leave the facility. We do not compromise on quality.
EB: Do you also have FAEs (field application engineers)?
Yes. Right now we have one person in India and one from Singapore supporting us here.
EB: Between telecom and automotive, which one is your bigger bet? Where do you see more growth?
Both sectors are growing.
EB: Do you look at Indium as a competitor to those companies who are already in this domain?
No. We think of the relationship more as a collaboration, especially with respect to industrial products.
EB: Which is the main target group you are trying to build relations with to strengthen your business?
We’re trying to build a relationship with the EMS companies, which are the local factories. But we also need to work with the corporate offices.