QUAD Electronics Solutions Pvt Ltd, a premier product lifecycle solutions provider, is strong in sectors like telecom, industrial, power and consumer electronics. It provides services to some of the biggest OEMs across the globe. “We aim to dominate the PLM space in India and to grow our business globally through both organic and inorganic means,” says Raminder Singh Soin, chairman and managing director, QUAD Electronics, in a conversation with Srabani Sen of Electronics Bazaar. He also highlights the current trends in the electronics manufacturing services (EMS) sector and sheds light on how domestic companies can compete with the MNCs in this space.
With the launch of Aakash, the world’s cheapest tablet PC, a new era has emerged for the Indian electronics manufacturing services (EMS) and in general the Indian electronics hardware industry. Manufactured at QUAD, the launch of Aakash signals the start of a phase of possibilities of high volume electronics manufacturing for Indian markets. It also is a landmark that brightens India’s prospects from the manufacturing sector to electronics, apart from cellphones.
EB: What are the current trends in the EMS sector, both in India and abroad?
Globally, of course, the EMS sector is growing, but after the 2008 recession, overall volumes have come down. The trend is different in India, where the electronics manufacturing sector is coming up now. All these years, India was looked at for software; now, global companies have started looking at India for electronics manufacturing as well. This is happening because of various reasons. One is, of course, the China market, where the cost is going up compared to India. This is making global original equipment manufacturers (OEMs) to de-link themselves from a higher cost country and link with a lower cost country like India. Apart from this, now the government is focusing more on manufacturing and helping open up markets for the EMS companies. Also, earlier, there was no ecosystem in India, but now it is being developed, and companies like QUAD Electronics are helping in this endeavour.
EB: Are there any global trends in the EMS sector that are not being mirrored in India?
India has now acquired a position on the global map, so trends anywhere in the world are bound to be reflected in India as well. As I said, it is now a good time for the OEMs, as the Indian markets are opening up for them. Let’s look at the Apple iPhone, which was launched in the US first, but now it has reached India. Global manufacturers would definitely like to manufacture in India so that their products can be launched simultaneously in both the markets. This trend will start soon as no company in the electronics sector can afford to ignore the Indian market.
EB: Many MNCs have entered the EMS sector in India. How are you dealing with the competition?
The electronics market in India and across the world is large. Companies are focusing on niche sectors like automobiles, aerospace, defence or consumer electronics. So every company has its own market share. Right now, EMS is a growing sector, but the players are few. So everyone has a market share.
Although global companies are venturing into India, they have not been able to compete with domestic players mainly due to cost factors, as India is a cost sensitive country. On the other hand, many Indian manufacturers, including QUAD, have global manufacturing processes and systems, and so can take the lead. We have demonstrated our competitiveness on both price and quality, vis-a-vis global players.
However, that is not enough. We have to be innovative and produce quality products. India is known to be a good software developer, but now it needs to become a good hardware developer also and integrate software with hardware. This is where we should take the lead. We should encourage OEMs to give their business to Indian manufacturers rather than going to any other global destination.
Domestic players also have an edge over MNCs in terms of understanding the domestic market and the psychology of local customers.
EB: When you talk about being innovative, do you need to be innovative in manufacturing strategies also?
Yes, definitely, we have to be different from our global competitors and think out of the box in terms of manufacturing strategies as well. Indian companies need to understand the importance of value addition and quality products. We have to be innovative in reducing costs, and add value in all our manufacturing processes.
EB: Can you mention any one ‘best manufacturing practice’ that you follow?
We follow the lean management process, where we avoid unnecessary and wasteful practices and our production cycle time has improved. It is a concept that is well recognised globally. It took us some time to adapt to this process, but it is something that is driving us towards improved efficiency and better output.
EB: Can you share some of your recent achievements with our readers? What are your future plans?
Recently, we have added another feather to our cap by way of getting the world’s largest computer peripherals company to manufacture in India with us. We have also started manufacture of the world’s cheapest tablet PC, ‘Aakash’ for the UK company Datawind. The tablet was recently unveiled by Kapil Sibal, HRD minister, Government of India.
We plan to target inorganic growth for the company and increase our footprint in global markets. We are also planning to venture into automotive, aerospace and medical sectors, with increased focus on solutions for the defence space.
EB: Can you throw some light on Aakash, and how you managed to achieve this?
It gives us immense pleasure to state that QUAD has contributed to make the dream of India’s HRD Ministry a reality by being the first Indian company to manufacture the world’s cheapest tablet PC—Aakash. This tablet was designed by Datawind, a UK company, in collaboration with IIT Rajasthan. Once Datawind emerged as the lowest bidder for the tender, QUAD was selected as the partner of choice for this venture. With a proven track record of 14 years, QUAD was able to turn around the tablet in 2 months’ time. The Indian government hopes the device could herald a paradigm shift in making technology accessible to marginal sections of society and bridge the digital divide. It will bring a computer to those people who could never afford one for its price and power consumption. The 7 inch tablet which runs on Google’s Android platform 2.2 OS, with WiFi connectivity for Internet access and cloud storage has been created for use by students and will be first made available to colleges at a subsidised rate of Rs 1,750 (US$ 35) a piece, by the government as a part of its vision to make information and communication technologies an integral part of education. With the manufacturing of ‘Aakash’, QUAD has proven yet again that it is a ‘partner of choice’ to customers, globally.
EB: In which sectors do you have the strongest presence?
We are basically focusing on high volume sectors. Consumer electronics is where we have a strong presence not only in the Indian market but globally, too.
EB: How strong is your R&D team?
Our R&D team has 20 people and we are focusing on its expansion. We want to get into specialised solutions for our customers. Our main focus is to do strong R&D and offer innovative solutions to our customers.
EB: How do you position yourself in the EMS sector in India?
We are one among the top five EMS companies in India, in terms of the number of people we employ as well as revenue. We aim to be No 1 within a year or two. Right now, we are operating from Hyderabad, where we have 1000 people working for us. We are expanding into other locations as well. We now plan to set up our European operations and we are looking forward to establish tieups with global companies in this regard. We offer our customers a unique blend of global processes and local delivery, which supplements our knowledge of the Indian business scenario.
EB: How do you see the growth of the EMS sector in India?
The OEMs do not want to do everything by themselves. If you look at the trend worldwide, many big brands don’t want to manufacture themselves. They have an outsourcing model, and EMS companies are like specialists, taking care of everything for the OEMs in terms of their products. This trend is picking up in India, too. Hence, the EMS sector will grow faster. There is a huge opportunity for EMS companies in India and it can significantly boost India’s GDP, generate employment, modernise the local electronics industry and enable the country’s inclusive growth in the coming days.
EB: Do you face many challenges as an EMS company?
The biggest challenge faced by the EMS industry is the policy paralysis on the part of the government. An unfavourable tax and duty structure for many product categories and tough labour laws have been the major hurdles preventing the EMS industry from taking off within the country. Logistics is another bottleneck. The ports and roads are not well connected, thus reducing efficiency. Also, the right kind of manufacturing environment, and the non-availability of components, restricts our ability to scale up. Mere awareness about the latest technology is not sufficient, but being able to deliver that technology is also necessary. The number of qualified and experienced people who are capable of delivering high tech products are limited. We need to cultivate that kind of skillset. Easy finance is also not available for a private entrepreneur. The cost of finance is too high in India.