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Interaction | November 2015

We commit to continue our investments to Make in India

Talking about his experience in the Indian electrical market, Takaki Oguri, Managing Director, Anchor Electricals Pvt. Ltd shares his optimism about the Indian market and future plans for Anchor with POWER TODAY.

Kindly outline your journey with Anchor. What are the milestones you would like to highlight?
My journey with Anchor began in 2007 when the erstwhile Matsushita Electric Works, now Panasonic Corporation, acquired a majority stake in Anchor. I was part of the pioneering four member team deputed from Japan to lead Anchor´s transformation and growth, as part of the Panasonic Group. I was Sales & Marketing Director for Anchor till 2011. After a brief assignment with Eco-Solutions Global Marketing Division of Panasonic as Director, Strategic Planning, I resumed with Anchor as Joint Managing Director and continued till my elevation as Anchor´s Managing Director in April 2015. My journey with Anchor has been very enriching as it has given me a deeper insight into the Indian electrical market. Some of the milestone moments that we achieved during and post acquisition included creation of new sales infrastructure, particularly expanding the reach of the company and instituting its own sales force. Today, Anchor has a direct presence in more than 23 states in India.

Please share some personal experiences of the changes you have witnessed in the Indian electrical market?
Since 1991, when India opened up its market to bring in foreign investments, Japan as a country has been its strong trade partner. The geo-political situation and socio-economic diversity makes it a very challenging market. While the overall aspiration level of the Indians has increased with the growing buying power, electrical market at large continues to be driven by price even today, with low awareness and education about quality. The macro-economic trends in India have always pointed at the fortune lying at the bottom of the pyramid. The Indian market has seen an upswing with the present government´s newly announced policies and several international players are competing with each other for their share of the pie. I now see an emerging market for aesthetically and technically superior products in every product category.rce.

How has the journey been, especially in navigating the challenges that arise, given that the Indian market is still not mature?
We have overcome company specific challenges in capacity, processes, competencies and infrastructure, during my journey. As majority of the market is still value driven, we have positioned our products and sales capabilities to align to this market strongly, that has led to an aggressive growth year-on-year despite a slowdown in the market demand.

What kind of impact have the government policies had?
The new policies outlined by the government are definitely conducive for the business environment. We need to see how quickly the larger reforms go under implementation though.

The macro indicators are positive and there is a direction set to strengthen the governance of financial markets and move towards global standards, commitment towards investment directly by the government and through public participation in Infrastructure development. The reduction in tax on royalty will encourage technology infusion and manufacturing of technologically superior products in India. One of the major problem in India was the unpredictable indirect tax regime that took a toll on manufacturing industry. The implementation of GST could be a major breakthrough lending additional support to ´Make in India.´

What is your plan for Anchor going forward, especially with the government´s thrust on the Make in India campaign and the power sector in particular?
The Make in India campaign is a good initiative for progressing India´s economy. India has always been one of the strategic markets for Panasonic and being a vital member of the Panasonic group, we are continuing to look at a double digit growth of the company in the upcoming three years. Anchor´s manufacturing is primarily localised and since acquisition, we have invested a large capital for capacity expansion, product development and infrastructure creation in India. We are committed to continue our investments to develop under ´Make in India´. The initiatives such as 100 Smart Cities and rural electrification bring some additional opportunities that may be tapped by us. We have ventured in the Energy Generation Segment with HIT Solar PV Modules in 2014 and have offered a robust value addition to our Indian customers with EPC, intending to offer a one-stop solution to our captive roof-top customers. This business shows a great promise with rapid industrialisation taking a front-foot in India in the upcoming years.

How has the company´s growth in the evolving Indian market been over the past two years? What was your turnover in the last fiscal and how much growth are you planning?
Anchor´s core business comprises of LV (low voltage) electrical construction materials, primarily used in residential and commercial premises.

From 2007, when the company became a part of Panasonic Corporation, the emphasis has been on bringing synergy in three areas, namely product, design and manufacturing.

Anchor has been able to introduce new product categories suitable for the Indian market. The product designs are aesthetically and technically superior while our manufacturing processes have become more energy-efficient and cost-effective. While there is a definite slowdown in the overall construction business, the company is growing by 15-20 per cent per annum despite the slowdown. Last year turnover was approx. Rs 20,000 million and we intend to achieve a double digit growth by this year-end.

In the coming year, our objective is to continue our aggressive growth and increase our market share in every product category.

How much of your revenues are domestic and how much is from exports? Are you planning on expanding either domestically or internationally?
At present, a majority of our revenue is from the domestic market. Export focus is key to our growth plans and over the next three years we will expand aggressively in South Asian, West Asian, Middle East and African markets.

Which verticals of Anchor would you say have seen or will see the most upswing given the current market conditions?
Anchor has seen an upswing in its LV switchgear and light duty cables business. Lighting and solar business may see a sudden upswing in the current market conditions. The wiring devices business is in the transitory phase and while we hold a majority market share in the said business, it will scale up vertically as well as horizontally with new product line-up as well as diversification.

How much of the market share does Anchor currently claim in each of these verticals and what is your targeted growth over the next two years?
We have a majority market share in the segment of electrical switches and accessories (wiring devices) approximately 35 per cent and 10 per cent, amidst the organised market of light duty wires and cables. In all our other businesses, our market share is between 6-8 per cent and our objective is to reach at least 10 per cent market share in these businesses in a short period.

What areas would be the most challenging and what is your strategy to tackle these?
Our midterm strategy outlines are almost set. Lighting especially our LED business, switchgear and IAQ are the three verticals showcasing a promising future for Anchor, along with its core business of switches and accessories. The company´s successful foray in the energy generation space last year and scaling up of its EPC team will enable it to offer an end-to-end solution to its solar customers.

The challenge would be to maintain Anchor´s distinction in terms of delivering superior quality products; focusing on energy-saving across the diverse price-points, in a highly competitive market like India.

How optimistic are you about market growth and development in India? Why?
As is widely known, the economic fundamentals of India support construction of many houses and large scale reconstruction especially in urban areas. This construction will support higher demand for electrical construction materials and increase in the requirement of power. The ease of imports, higher information accessibility and availability is making the consumer more discerning and demanding. All these factors motivate us to ready ourselves and cater to this expected growth in terms of volumes and value.

India has always been one of the strategic markets for Panasonic. The Indo-Japan robust relations have evolved to a different level with the present government looking at Japan seriously as a technology partner on various fronts. As an organisation, Panasonic sees a huge scope in upcoming segments such as solar and smart cities as it already has the experience of Fujisawa SST in Japan and Dalian in the People´s Republic of China. Being the third largest lighting company in the world, no. 1 LED lighting brand in Japan and with the renewed thrust of the government in renewable energy and power-saving, Panasonic also envisions a robust growth in this sphere. With the present impetus on industrial growth and Anchor already being one of the leading manufacturers, we see a scope of further evolving it as a strategic manufacturing-cum-export hub for India, South East Asia, Middle-East and African countries.

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