Interview—Soni Saran Singh, NMTronics
NMTronics has had a long presence in the Indian electronics industry and entered the solar PV business two years ago as well. In an exclusive with Pradeep Chakraborty, Soni Saran Singh, executive director, NMTronics, explains how the company has managed to stay on top this long.
Please provide an overview of NMTronics.
It gives me great pleasure to say that NMTronics is synonymous to SMT in India. We have completed the 12th year of our operation in 2011, and in these 12 years, we have seen the SMT business grow from a nascent stage to complicated and modern designs.
As a brief introduction, we are a 100 percent subsidiary of Sojitz Corp, Japan. We are a technology-oriented company and are active in the SMT, solar and semiconductor business domains.
In the last 12 years, we have grown to a strong team of 150+ professionals with operations in all the major manufacturing hubs across India. In these years, NMTronics has evolved into a turnkey solution provider, across different product categories, where our clients do not look at us merely as equipment supplier but as a solution provider. This is why we call ourselves “Partners in Technology,” as we partner with our clients to have a successful technology venture.
We have been working with great technology providers like FUJI Machines, Koh Young, Mentor Graphics (formerly Valor Software), Nisshinbo Mechatronics and BE Semiconductors, all of whom have helped us to develop a strong customer-centric philosophy and raise our performance standards, so that we can provide high level services to the Indian manufacturing industries and become their preferred choice.
What has NMTronics recently achieved in the Indian electronics industry? What’s planned ahead?
NMTronics has been able to maintain its market leadership in the electronics Industry with 55 percent market share, despite having stiff competition in the Indian market even with some of the OEMs. This is a great achievement for all of us at NMTronics.
Also, as a recent development, we took initiatives in bringing interest among Indian entrepreneurs for local mobile phone manufacturing. We are pioneers in providing turnkey solutions for mobile phone manufacturing, with an experience of over six years. The Indian government is putting initiatives by introducing domestic manufacturing policy, and therefore we see huge potential in mobile phone manufacturing in the coming years. We are sure that NMTronics will play a key role in this segment.
Healthcare is said to be a key segment in India. What are you doing in that area?
I agree that healthcare is going to be a key segment in India, but unfortunately India is far behind as compared to the global development in healthcare.
Components required for healthcare require a very high level of quality, and although we have done quite a few projects with some of our clients, at mass scale, the major components are still not being manufactured in India. We have been carefully evaluating this sector for the last two years, with some interesting solutions for manufacturing disposable lenses, insulin pens, dialyzers, etc. With our strategic marketing background and with unmatched access to decision makers in Indian industry, we will scout for new customers getting into healthcare product manufacturing to help them by providing suitable solutions to meet their demands.
What is your take on the Indian power electronics scenario for 2011?
In power electronics, still, we find a considerable gap between the domestic demand and supply, which is currently fulfilled by imports. ODM imports from China and Taiwan in the low power and high volume UPS and inverters have been a growing trend in the past years. New design firms and new entrants in these segments have provided India a competitive edge to the marketplace. Given the vagaries of Indian grid, there will be many local challenges that cannot be directly served by the solutions developed in other countries, so the opportunity to develop local capabilities and benefit is great.
How do you see the electronics industry in India performing so far in 2011?
There is no doubt about the fact that Indian electronics industrial growth is booming. With a sizeable domestic market, which India has all along, with the country’s economic growth being in rapid track, with lots of government inflation measures, the investments in manufacturing in consumer electronics, automotive, medical, defense and power electronics is growing. New investments happened in most of these industry segments due to the fuelled growth and this trend is stable and continuing.
Has enough has been done about the Indian electronics industry? What more needs to be done? How should it go ahead in 2012?
With miniaturization becoming part and parcel of each electronic gadget, with more and more sophistications coming day by day, there is no end for electronics manufacturing growth. As an equipment supplier, our role will continue to bring in the latest technology equipment to meet those challenges. Industry is in the trend to shift to handle more complex, more volume assemblies.
With MNCs in this segment already set the example of quick ramp up with developed ecosystems, it is the time for the local Indian companies to adopt those initiatives for increased domestic manufacturing. The government also has to introduce some local manufacturing policy. and there is a need to set up the necessary infrastructure faster in terms of uninterrupted power, water and good connectivity for the industries to go with their investments. There are few products like MP3 players, flat panel displays, memory cards, gaming consoles, cameras, etc., which are yet to be see light in Indian manufacturing. When I see this, I feel there is a lot yet to come to India and therefore, foresee lots of new investments to happen in the year 2012 and beyond.
How do you see the Indian semicon industry evolving, if at all, in 2012? What needs to be done?
Everyone knows that semicon is a very big opportunity for India, considering the market size and the increasing application of semiconductors in our day to life. Semiconductor consumption in India is estimated at $43 billion, which will grow multifold in next few years to reach about $80 million. We have been closely monitoring the industry for over a decade now, but India has restricted itself to only design and R&D when it comes to the semiconductor industry. Unfortunately this strength was never converted to mass manufacturing till now. There are some less complex products like bright LEDs, memory chips, memory cards, etc, which does not require very high level of investment, but still there is no major growth in semiconductor manufacturing.
The Government announced its semiconductor policy, which helps in setting-up of semiconductor manufacturing, but the big question is that how India will compete in marketing of these products compared to Chinese or Taiwanese manufacturers, who have more than 30 years of experience in these industries. There is a need for strong government policy to protect the Indian manufacturers initially (in the learning phase), by duty exemptions on raw materials and equipment, mandatory local content in government projects and so on. The India Semiconductor Association (ISA) has been working on this for very long, but there has been no appreciable result. We hope someday that policymakers will understand the requirement, and the Indian semiconductor industry will see a new light.
In solar PV, what does the industry need to do in 2012? Has the Indian industry learned anything from the global perspective, especially with firms closing shop?
Solar PV will continue to be a major business in the next two decades. Energy is the backbone of growth for any nation, and therefore, demand for energy will continue to grow in coming years. Especially now, when nations are looking for renewable source of energies, PV stands at top slot of growth due to its low cost of operation and maintenance.
The PV business cycle over the last five years has seen cyclical business in different segments. In 2006-2007, there were major investments in module manufacturing looking at the potential in Germany. When pressure started coming on to cell cost, there were major investment observed in wafer and cell manufacturing in 2008-2009, causing over capacities to build up in cell manufacturing. This increased the demand of polysilicon and more module manufacturing capacities in 2010-2011.
Until now, the cost of PV power was a subject of economical demand and supply, but now, we see a balance in the entire value chain. Therefore, we do not see major fluctuations in the pricing of PV in 2012. Currently, polysilicon spot price is about $50/kg and it will further go down to $37-38/kg in 2012. This will bring down the cost of module below $1/Wp, which will help achieving grid-parity sooner than it was anticipated by experts.
In 2012, we expect the industry to focus on improving the efficiency of modules and smooth completion of solar PV projects, which are currently under installation. These two things will bring down the investment cost in PV power plants and develop the confidence of investors in the sector. With developed economies facing pressure on debts, there is scarcity of funds in the market, which has slowed down the investment in PV power projects. Looking at the set-up cost of PV power plant, even today, this gives a decent IRR (investor return ratio), but many investors would like to see the project executions to gain confidence in this business. Policy makers need to observe the cost and availability of finance to support this sector.
The government of India has made a very good policy of putting up local content requirement of cells and modules manufacturing in India, which will help Indian manufacturers grow their capacities.
But still there are some loopholes, like no local content for thin film modules, high duties on import of raw material, which have to be looked into. We expect some concrete steps in the 2nd phase of the JN-NSM to close these loopholes, to avoid the mistakes that other economies are going through.
What are your plans for NMTronics in 2012? What are the challenges?
NMTronics has gained considerable growth in SMT Industry over the years, and we shall continue our effort in retaining our leadership position.
Solar business is our most recent venture and though we have completed just two years in this domain, we have been able to create our identity in the industry by getting orders from some of the leaders. We will continue our growth in this sector. Currently, we have supplied equipment for module manufacturing only, and we plan to launch ourselves as a single-window solution provider for the entire PV value chain in 2012.
We are very ambitious for both domestic mobile phone manufacturing and our solar Venture, but success will depend on government policies and initiatives in encouraging investments the global market scenario. This is the only challenge we see at the moment.
Our commitment to clients in the SMT, solar and semiconductor industries, and the passion to offer world-class technology products and services will continue