SEPTEMBER 2012: NMTronics (India) Pvt Ltd is a provider of machines, solutions and services to the electronic manufacturing industry. It is a 100 per cent subsidiary of Sojitz Corp., Japan. Since inception in 1999, it has consistently striven to adhere to high-quality standards. Driven by customer-centric corporate philosophy and aided by quality products and efficient after sales and support services, NMTronics is acknowledged as the undisputed leaders in the field with world-class equipment manufacturer partnership.
In an exclusive chat with Pradeep Chakraborty of EFY, Soni Saran Singh, executive director, NMTronics (India) Pvt Ltd talks about the company’s recent achievement in the Indian electronics industry, on the Indian government’s M-SIPS and what needs to be done about the Indian semiconductor and solar PV industries. Excerpts:
Q. Please give us an overview of NMTronics. What are your recent accomplishments?
A. NMTronics continues to maintain its lead position among the technology suppliers of the EMS industry in India by introducing latest innovations regularly. NMTronics is steadily increasing its presence in other areas of technology as well. With SMT as its stronghold, the solar Industry is also recognising NMTronics’ potential and ability to provide almost all the available operating solutions.
As for our USP, we have an all India presence, which enables us to cater to all sectors, we provide customised solutions to meet the requirements of each and every EMS customer. Our USP helps the company to retain its apex position.
Since day one, NMTronics continues to believe in providing all solutions on a single platter after vividly understanding the specific needs of customers. It has been possible, thanks to the support of all the 30 plus principals/business partners. As a leading technology supplier, NMTronics aspires to expand its scope from the traditional stand alone, or line machine suppliers to a complete solution provider meeting all expectations.
The Indian industry is slightly sluggish in the areas of semiconductors and LEDs. NMTronics is making efforts and working to get educated and equipped in these areas, as well, with complete technological back up. We strive to be able to provide solutions in diverse yet interlinked fields and take all challenges in our stride.
Some of our recent accomplishments include: As a part of the product and technology unveiling campaign for all principals, NMTronics presented FUJI technology seminar in all major electronics manufacturing hubs, which was well participated and appreciated by the esteemed customers.
NMTronics also plans for a similar kind of exposition of products in future to facilitate customers’ understanding toward technology innovations and fresh opportunities.
This program was hosted by Klaus Gross, MD of FUJI Europe, supported by the top management of FUJI Machine Mfg. Co. Ltd, Japan, and FUJI Asia, Singapore, who presented the end-to-end technological criticalities and tips for precision product manufacturing to all those who attended.
Q. What has NMTronics recently achieved in the Indian electronics industry? What is planned ahead?
A. NMTronics believes in long term goals and a ‘here to stay’ concept. Establishing credibility by providing services to delight customersâ€™ has been the key factor of our success. Over the period of 12 years of service to the Indian electronics manufacturing industry, NMTronics has progressed phenomenally and spread wings to the entire semiconductor business, including photovoltaics, purely based on this approach.
NMTronics has plans to reach out to more diversified business area of semiconductor verticals, including LEDs and nanotechnology.
Q. What is NMTronics doing in the healthcare area? Please elaborate.
A. Healthcare is one of the fastest growing industry in India, an industry, which a company with long term vision cannot miss. When it comes to the installations of capital equipment, for healthcare, India is far behind when compared to the global development in healthcare.
I am very happy to say that there has been a consistent growth in this field. Components required for healthcare need to be of very high-level quality, and these, in turn, require high-level automation solutions to minimize the human intervention.
We were carefully evaluating this sector for last two years, with some interesting solutions required for the manufacturing of disposable lenses, insulin pens, dialysers, etc. After great research, we were successful in materializing our first such project.
The solution offered by us is the brainchild of one of the leading supplier of such solutions from Germany. The equipment offered by them meets all of the quality regulations, including operation in a clean room environment.
We are now looking forward to multiply our experience by offering similar solutions to other such Indian manufacturers. Some arrangements have been made, and you will see and feel our presence in next few years.
Q. How are you managing the Indian power electronics scenario? What is it like in 2012, and perhaps, 2013?
A. In power electronics, we still 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 the Indian grid, there will be many local challenges that cannot be directly served by the solutions developed in other countries. Therefore, the opportunity to develop local capabilities and benefits is great.
Q. How has the Indian electronics industry performed so far in 2012? What do you see in the future?
A. There is no doubt about the fact that the Indian electronics industrial growth is booming. With a sizeable domestic market, an Indian asset, with the country’s economic growth being in the rapid track, with lots of government inflation controlling measures: the investments in manufacturing of consumer electronics, automotive, medical, defense and power electronics is growing. New investments happened in most of these industry segments due to the fuelled growth. This trend is stable and continuing.
A cautious approach is definitely there in Indian electronic industry, but we still feel that there is no slowdown fever, and still there are a lot of current investments. The global and local economic scenario has not hit our industry as much when compared to the other sectors’ industries. The Indian electronic industry has a bright future, with steady growth in 2012. We expect 2013 to be a bountiful year.
Q. Would you like to comment on the recently announced government of India’s M-SIPS?
A. The scheme provides subsidy for investments in capital expenditure, 20 per cent for investments within Special Economic Zones (SEZs) and 25 per cent in non-SEZs. It also provides for reimbursement of countervailing duty or excise duty for capital equipment for the non-SEZ units. High technology and high capital investment units, like fabs, are also offered reimbursement of central taxes and duties.
Called the Modified Special Incentive Package Scheme (M-SIPS), the incentives are available for investments made in a project within a period of 10 years from the date of approval. They are available for 29 categories of ESDM products, including telecom, IT hardware, consumer electronics, medical electronics, automotive electronics, solar photovoltaic, LEDs, LCDs, strategic electronics, avionics, industrial electronics, nano-electronics, semiconductor chips and chip components, other electronic components and EMS.
This is a very good move, which will help and attract investors.
Q. Has enough has been done about the Indian electronics industry? How should it go ahead in 2013?
A. 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 be to continue to bring in the latest technology equipment to meet those challenges. The industry trend is shifting to gear up to handle more complex, more volume assemblies.
With MNCs in this segment are already setting the example by investing in a quick ramp up with developed ecosystems, it is 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 encourage further 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 more that has yet to come to India and therefore, foresee lots of new investments to happen in the year 2012 and beyond.
SEZs closer to the infrastructure should be properly emphasized. The Minimum Alternative Tax to the SEZ industry in the budget 2011 was a breach of trust. We know of at least two big giants, who reversed their investment decisions due to the flip-flop approach.
Q. How do you see the Indian semiconductor industry evolving, if at all, in 2012-13? What more should be done?
A. Everyone knows that semiconductor is a very big opportunity and necessity. Over the last few years, the chip consumption has increased by 61.44 per cent to a $8.25 billion industry, as per the India Semiconductor Association and Frost & Sullivan study. Right now, India imports 95 per cent of its electronics with $45 billion worth of electronic goods imported in 2010.
India adds value by way of design, but that accounts for a more modest $2 billion. Moreover, $20 billion worth of chips are manufactured at Taiwan, China and Korea, based on chip design work done in India.
You would be surprised to know that import value of electronics in India is higher than crude Imports. An increasing dollar exchange rates and high electronics imports have forced the Indian government to lure semiconductor manufacturing firms to India. The Indian government has recently announced special incentives for setting up of large scale electronic system design and manufacturing units.
The incentives are available for 29 category of ESDM products, including telecom, IT hardware, consumer electronics, medical electronics, automotive electronics, solar photovoltaic, LEDs, LCDs, strategic electronics, avionics, industrial electronics, nano-electronics, semiconductor chips and chip components, other electronic components and EMS. This is, as already mentioned, the Indian government has announced special incentives for setting up of large scale ESDM units.
These initiatives from the government have already triggered excitement amongst investors, and the only thing missing now is a solution provider, who can provide an end-to-end solution of semiconductor manufacturing equipment.
I feel proud to say that NMTronics has already taken its initiative. We are now ready to offer an integrated solution for LED manufacturing, which includes solutions for not only machine, but material as well. With this positive environment, India is ready to take on the semiconductor opportunity. All we need is a technopreneur, who can create a success story for others to follow.
Q. What does India need to do in solar PV, in 2012 and 2013? Has the Indian industry learned anything from the global perspective, especially China?
A. If we look into the Indian companies manufacturing styles, these companies have been more successful in niche markets compared to mass production. We feel that the Indian companies are realizing their core strengths and started working on core domains.
Due to these factors, the industry needs to focus on various areas like improving the efficiency of modules (over 21 per cent), providing customized power backup solutions and bringing value in terms of high quality after sales support, for which Indians are best known.
These areas comprise about 15 per cent of worldwide installations and still command a premium, which can isolate us from the low and medium segments. We are proud to share that we have formed a consortium with some equipment manufacturers who can provide such solutions, and thereby, can help Indian manufacturers outshine their global peers.
Still, lot more efforts are required from the Indian government for providing support to the Indian manufacturers, which will help them to be competitively priced against Chinese counterparts who are getting high subsidies from their government. They should learn from the United States, who, in a effort to protect its domestic industry: on May 17, slapped tariffs ranging from 31 per cent to 250 per cent on 61 Chinese solar panel makers.
We still feel that solar PV will continue to be a major business in next two decades. Energy is the backbone of growth for any nation, and therefore, the demand for energy will continue to grow in the coming years. Especially now, when the nations are looking for renewable source of energies, PV stands at the top slot of growth due to its low cost of operation and maintenance.
Q. What are your plans for NMTronics in 2013? What are the likely challenges?
A. NMTronics wishes to continue to be the market leader by increasing its customer base. The major challenges are synonymous with the other industries, i.e., skilled manpower, manufacturer conducive policies and quality product manufacturing.
However, NMTronics is constantly updating all of its resources to meet and mitigate the challenges of manpower and explore new business areas to increase its customer base. NMTronics is quite positive toward the future of the industrial development in India and is equipping itself to meet the remarkable requirement of technology for quality manufacturing in future, while the manufacturing base will be shifting from neighbouring countries.
NMTronics has gained considerable growth in the SMT industry over the years, and we shall continue our effort in retaining our leadership position. We are very ambitious for domestic mobile phone manufacturing and our solar venture. However, success will depend on government policies and initiatives in encouraging investments in the global market scenario. This is the only challenge we see at the moment.
Many areas of development in the equipment industry are being envisaged. Slowing down of the economy needs to be immediately revived to help the uplift of sentiments. We believe that there is no dearth of entrepreneurship and the growth story of India is intact. Some measures for the upliftment of sentiments are required to make things move back on its previous fast track.