Charter Controls discusses its decision to forge closer links with the Indian industry, and how it became a UK importer of Indian automation products.
Today, the majority of people in Europe think of China as the world’s manufacturing centre. Huge manufacturing plants churn out millions of consumer goods each day, mainly for international conglomerates such as Apple or Samsung. What is not so well known is that fellow BRIC country, India, also has a significant manufacturing centre, but it is based on smaller companies with a more industrial focus.
India is an important centre for automation and software development. As well as the country’s manufacturing base providing a fast growing market for global automation suppliers, it also has home-grown automation suppliers that are starting to look outside of India to provide future growth.
Today, the Indian automation market is estimated to be worth close to £1.7bn, with around 80 percent of that controlled by international companies like ABB, Siemens, Schneider and Honeywell. The remainder is filled by India’s own automation suppliers. India’s automation market is expected to sustain growth of around 12-15 percent per year in the short term. The automation area breaks down into the process automation market with a value of around £1 billion, factory automation worth around £200 million and electrical automation is estimated to be near£500 million.
India’s domestic automation suppliers are split into a few big conglomerates like Larsen & Toubro, Crompton Greaves, other larger enterprises like CS Electric and BCH who have an interest in automation, and many small and medium size businesses. These SMEs include Rishabh Instruments, GIC India, Selec Controls, and Renu Electronics.
Indian product quality and specifications are equivalent to leading global brands, but they offer a significant price difference due to lower manufacturing, marketing and branding overheads.
At the moment Indian companies only export around 5 percent of the goods they manufacture. Indian automation companies have so far targeted the Middle East and South East Asia. The main reason for targeting these markets is that those countries require lower levels of approvals.
Because many Indian companies are small or medium sized, the relative cost of getting approvals and accreditation is higher. There is also currently a lack of accreditation facilities in India. Indian manufacturers don’t currently see a good RoI for these approvals and have historically struggled to get access to the huge European and American domestic markets.
However, the 5 percent export figure doesn’t tell the full story. Many Indian automation manufacturers also act as OEMs for some larger European companies. Many of the most popular ranges of automation equipment from premium European and US brands are actually re-badged Indian products.
To assist manufacturers, the Indian government has recently announced plans to increase automation exports from 5 percent of production in 2013 to 20 percent of total automation produce in 2022. The government has committed to helping businesses promote their product in developed markets including the UK.
India already has a preferential trade agreement with the UK government that allows automation products with India as the country of origin to enter the UK with no import duty. Similar trade agreements have also been made with other European governments. This arrangement helps both UK importers and Indian exporters by making the product even more cost competitive.
One of these UK importers is Charter Controls, based in East Sussex. Charter Controls is an established importer and distributor of Low Voltage Control Gear products for the UK market. The company initially concentrated on European manufacturers, but after the market crash in 2008, it decided to diversify its suppliers to minimise the effect of any future currency fluctuations.
Many of the new lines acquired after the crash came from GIC, a medium-sized, family-run business in India. These lines have proved very successful and driven the business forward. In fact they have proven so popular that RS Components now stocks 35 GIC products with other distributors expected to follow soon.
Managing Director of Charter Controls, Malcolm Greenhill has formed a close relationship with Indian company GIC over the last three years. He agrees that the quality of Indian products is at least equal to those from more well-known manufacturers.
“The number of faults and returns we’ve seen in the last three years has been very low, equivalent to,or less than the number we’ve experienced from more respected premium brands. In fact I’d say they have proven more durable due to the environmental factors that the products are expected to experience in India.”
He continues: “I know of no other manufacturer, European or otherwise, who operates a 100 percent product burn-in cycle for 24hrs at 55°C. Shared language and a similar working culture have simplified support issues found elsewhere”.
India already has a large influence on the world’s automation market, although much of that has largely gone unnoticed due to many of these products being re-badged by large western companies.
With the Indian government making automation a priority for export, that influence will expand quickly,and names like GIC will become much more familiar to European and American integrators.
It will be interesting to see how these products with their combination of performance, reliability and low cost disrupt the market over the next few years.