Uniparts Group commits to diversify its product range

Prof. Charanjit S Shah
We are committed to continuing to diversify our product offerings, customer base and geographic footprint and minimizing our exposure to individual market and segment. Our diversified product range includes 3-point linkage systems (3PL) and precision machined parts ("PMP") including those of warehousing and supply chain solutions, together with our scale of operations, technical know-how and after market segment which differentiate us from other producers of engineering systems. We primarily serve OEMs and operate out of six manufacturing facilities (five in India and one in the US) and three warehouses located across three continents, said Mr. Herbert Coenen, Executive Director, Uniparts, in an interview with S.K.Khanna.

Please introduce Unipart group to our readers, its business areas and presence in the Indian industrial and construction sectors.
Uniparts Group is a global manufacturer and supplier of engineering systems, solutions, assemblies and components, including 3-point linkage systems (3PL) and precision machined parts ("PMP"), primarily catering to off-highway vehicles (OHVs) in the agriculture, and construction, forestry and mining (CFM) sectors. In addition to our established product verticals of 3PL and PMP, we have a presence in the complementary product verticals of hydraulic cylinders and power take off (PTO) applications.

We also cater to the aftermarket requirements of our customers primarily in the agriculture sector. We manufacture all the critical parts that form the 3PL assembly, which includes top link, lower link, drawbar, chain stabilizers and linkage pins. Some of the other products sold by us in the aftermarket segment include weather caps, PTO parts, pins, leveling boxes, straps, hitch balls, lynch pins, R-clips, weldons, ratchet jacks and balls.

We supply our products to over 25 countries in North and South America, Europe, India and Japan. We primarily serve OEMs, through our global service delivery model based on our dual-shore integrated manufacturing, warehousing and supply chain management systems and solutions, operating out of six manufacturing facilities (five in India and one in the US) and three warehouses located across three continents.

Our diversified product range including those of warehousing and supply chain solutions, together with our scale of operations, technical know-how and after market segment differentiate us from other producers of engineering systems.

What is your overview of market potential of your products and services in India and the size of the market your company aims to achieve in the total market of these products and services?
As per CRISIL Research, by 2015, the size of the global 3PL market is estimated to be U.S.$374 million. By 2015, Europe is expected to account for approximately 35% of the 3PL market, North America 14%, India 17%, China 16%, Japan 8% and the rest of the World 10%. The major driver of 3PL demand is tractors, which is, in turn, a function of agriculture growth. Higher agriculture growth boosts farm incomes, resulting in higher tractor sales. Each tractor requires one 3PL to attach implements to the tractor, hence demand for 3PL is directly linked to demand for tractors.

As per CRISIL Research, the size of the global PMP market for articulated joints for the Construction, Farming and Mining sectors (CFM) was estimated at U.S.$624 million in 2012, with approximately 54% of the demand coming from Japan, Europe, North America and India, which is expected to remain largely unchanged in 2015.

A word about your manufacturing facilities in India, their field of opera- tion. Please also highlight your plans to target new customers and expand the existing ones through your presence in the country.
In India, the Group has 5 manufacturing and distribution facilities, of which 2 are at Ludhiana, Punjab, 1 at Visakhapatnam, Andhra Pradesh, and 2 at Noida, Uttar Pradesh. One of the Noida facilities and the Visakhapatnam facility, are located in SEZs, and are dedicated to export operations. The Ludhiana facilities are the source of machined forgings and structural fabrications for the other Indian facilities, and are the first level of processing for a majority of our products. One of the Noida facilities serves as a hub for the aftermarket export sales in the US, Europe, South Africa and Australia while the other serves as a hub for the domestic OEM sales. The Visakhapatnam facility serves as a hub for export OEM sales.

As part of our growth strategy, we are committed to continuing to diversify our product offerings, customer base and geographic footprint and minimizing our exposure to individual market and segment.

Uniparts Plant

We have been and will continue exploring opportunities for forward integration, including selectively evaluating targets for strategic acquisitions and investments, in order to strengthen our position as an integrated, full system solutions provider for the agriculture and CFM sectors. Through this objective we seek to strengthen our product platform and customer portfolio.

Our strategy is to acquire businesses with high growth potential, along with their existing customer relationships and product and process competencies, and to integrate and grow their businesses through enhanced quality and delivery parameters, engineering support, integration of IT systems and ERP platforms with manufacturing support from India, coupled with our management know-how and experience. In particular, we intend to explore opportunities in Europe, which would give us a manufacturing base in the continent, as well as opportunities in the U.S. to complement our existing business. We may also seek to expand our international warehousing and distribution operations, based on demand and delivery logistics in various geographies, to fuel our growth going forward. We believe that we have been successful in acquiring and integrating overseas assets and ventures in the past and will continue to benefit from such initiatives, thereby expanding our product portfolio, market share, customer base and geographical footprint.

Having been in India for quite some time, how do you see the growth for Uniparts in coming 3-4 years?
The OEM customers in this industry have unique requirements and preferences and seek integrated solutions across various levels of the OHV component value chain. To grow with our OEM customers in developed markets, we have evolved from being a component supplier to providing end-to-end solutions ranging from product conceptualization, design, prototyping, testing, development and assembly to customized packaging and delivery, thus becoming an integral part of some of our major customers' global supply chains. Further, Uniparts has set up its global service delivery model, which includes establishing warehouses in US and Germany to ensure timely delivery of critical components to our OEM customers.

Uniparts Precision Machined Parts

Our growth model has been based on our evolution from being a supplier of components into now being an integrated provider of complete product assemblies and concept-to-supply solutions across the OHV component value chain, as well as an evolution from being an aftermarket supplier into now being a dual-shore manufacturer and supplier of engineering systems, solutions, assemblies, and components to global OEM customers, based on a process of continuing vertical and horizontal integration.

Many of the leading global players are our customers and we can proudly attribute this to our ability to customize to customer specifications and requirements, as well as our track record of consistent delivery of quality and cost-effective products and solutions through our strategic alignment with our key customers' goals and specifications over the years.
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