“One must understand that in the lighting industry, cost competitiveness is very important”

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Home-Splash_LEDB-Manufacturing-FloorGujarat based Aims Industries Limited is one of the leading manufacturers of industrial and medical gases in the country. The company recently ventured into electronics manufacturing services and lighting products. In a conversation with Belal Khan of Electronics Bazaar, Anish Patel, director, Aims Industries Limited, shares the company’s success story and its diversification into new domains

The start and subsequent diversification
Aims Industries Limited is a family owned company incorporated on November 30, 1961, and the promoters of this 54 year-old organisation have always believed in diversification.
The decision to start an EMS division was taken keeping in mind the company’s association with lighting companies and their requirement for populated PCBs for their electronic ballasts.
“Our association with them also gave us the edge of professionalism, as well as an insight into their systems, processes and quality consciousness. We did work for firms like Anchor Electricals Ltd. Our limited two years of exposure to the industry but considerable exposure to its potential gave us the impetus to enter the LED lighting market,” says Patel.
Once adequate infrastructure was in place, the company decided to launch its own LED lighting brand —AGLO LED lights.
“The in-house design engineers have done a fabulous job and I am personally proud of the product designed. Currently, we do ‘Made in India’ lamps and panels. This is the first year that we have developed and launched our own LED lights. We are also looking at options of partnering with companies for automation and smart lighting for commercial and residential purposes,” adds Patel.

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Anish Patel, director, Aims Industries Limited

Challenges
Whilst there are good opportunities in the EMS industry in terms of growth potential, the biggest challenge is to get the certifications and standards at the right time to ensure quality growth. Moreover, the infrastructure needs to be put in place much faster in order to grow.
“Getting trained and educated personnel is also a big challenge currently, and support from the government is very important. Access to funding and single window clearances for start-ups are also big concerns,” adds Patel.

The EMS industry
According to some reports available online, the Indian electronics industry is estimated to have a turnover of ₹ 140 trillion, of which the EMS industry accounts for ₹ 140 billion.
“The demand for electronics is constantly growing, but 65 per cent of India’s needs are being met by imports. Hence, there is huge potential for manufacturing to grow in India,” says Patel.
The EMS industry is expected to grow at a CAGR of 25-28 per cent, year on year. This also means that the EMS industry will contribute immensely to overall job creation. But there is a need for educated and trained engineers, and larger infrastructure in terms of civil structures, plant and machinery.

AIMS 1Growth plans for the LED division
Aims Industries has now completely shifted to LED light manufacturing. The company plans to develop new products, look for partnerships and investors, and also create a solid trade channel to reach the market.
“Our team is competent enough to constantly do research and development to improve the effectiveness of the product, improve aesthetics and reduce costs. However, we are looking at technology partnerships in specific areas; for instance, we are seriously looking at smart lighting options and are open to technology tie-ups for the same,” remarks Patel.

Expected turnover from LEDs
The company plans to reach a turnover of ₹ 300 million in simple LED lighting by the end of 2017. Street lighting and solar LEDs are under development and it plans to launch them in 2016-2017.
“We will be dividing our business plans to create a balance, and will be manufacturing for other brands as Original Light Manufacturers (OLMs) and as well our own AGLO brand. Our manufacturing skills, with our openness to adopt and support our customers, will surely bring in OLM business. We also plan to adopt several national and international standards this year to give a boost to our market reach and have an edge over the competitors. We will focus on projects as well, and will be concentrating on factory lighting including that of clean room fittings,” says Patel.

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Government support

Today, about 65 per cent of the country’s electronics requirements are imported. The government has taken this as an opportunity to grow the electronics manufacturing industry. Today we get most of the imported electronic components duty-free, and DeitY has laid down a number of schemes for the growth and development of the industry.
“This is, in fact, the most visionary government seen so far. The ‘Make in India’ campaign will boost manufacturing in India as the country will open doors for the OEM business in India. We can give quality products at a cheaper cost, specifically when compared to the manufacturing costs of Europe,” adds Patel.

04Investment and future plans
The company’s EMS operations began with an investment of ₹ 30 million in 2012 and a small factory of 696.7728 square metres.
“We are looking at investing between ₹ 120 million and ₹ 150 million in the coming year to achieve our growth plans. One must understand that in the EMS industry, cost competitiveness is very important, along with not compromising on quality. Hence, a large percentage of funds are required for operating capital, apart from setting up a state-of-art facility. A 2787 square metre facility has been planned for in the year 2016,” sums up Patel.
The company soon plans to venture into the manufacture of streetlights and solar LEDs.

Year of establishment: 1961
Manufacturing unit/plant location: Vadodara, Gujarat
Types of products manufactured: LED bulbs, LED panels, LED 2×2 factory lighting, populated MCPCBs and LED drivers
Annual turnover: First-year expected annual turnover of the lighting division is ₹ 30 million
Production capacity: 1 million 7-watt bulbs per annum, though the firm generally makes a combination of different products