Clearly driven by its technology roadmap, Bright AutoPlast Ltd (BAPL) is keen on exploring new incoming opportunities and grow aggressively. Gagandeep Singh, CEO, reveals the company’s future plans.
Could you provide a historical background about the company and its presence in the automotive component space?
Bright AutoPlast (Sintex-BAPL) is a fully owned subsidiary of Sintex Holding BV, Netherlands. Incorporated in 2007, Bright AutoPlast designs, manufactures and supplies plastic components such as instrument panel, console, sub-assemblies of air vent, interior trims and pillars, exterior trims (parts with sub-assemblies), radiator grills, painted spoiler, fuel tanks (blow moulded), fuel filler pipe, and others. The company has laid down its roadmap for securing aggressive growth for the next five years. Bright AutoPlast recorded a turnover of nearly Rs 530 crore in FY15-16 and is aiming for a consolidated turnover of Rs 1,160 crore by 2020-21.
Could you provide details of your JV to produce lightweight parts?
The JV, which is called BAPL Rototech, is a JV with Italy-based Rototech. It was signed in October 2015 and the production operations began in April 2016 at our plant in Pithampur, Madhya Pradesh. BAPL has a share of 70 per cent while Rototec has 30 per cent share in the said JV. The companies have invested around Rs 10 crore in setting up the plant based on an ownership pattern. The JV is currently supplying products to Volvo Eicher Commercial Vehicles (VECV). It is also in various stages of discussions and development with Tata Motors, Daimler India Commercial Vehicles (DICV), Ashok Leyland and Scania India.
The Rototech Group is known for its expertise in rotational molding process used for shaping up plastic parts with automotive applications ranging from fuel, AdBlue, water and oil tanks, air intake, and other parts. Its global customer portfolio includes Daimler, Volvo Trucks, Kamaz, Iveco, Leyland Trucks, Renault, Scania, and many others. The JV formed in India is mandated to design and develop tanks (diesel/gasoline fuel, urea, water, oil, coolant), air intake parts (pipes, snorkel, bellow, filter housing, fan cover) and body parts including dashboard, internal cabin, toolbox, mudguards, and others.
It now aims to grab the rising demand for urea tanks, which are expected to increasingly become mainstream with the application of SCR (selective catalytic reduction) technology in vehicles, thanks to the incoming BS VI emission norms by 2020. It is understood that the SCR technology deploys AdBlue (or urea) as a key requirement in its mechanism to bring down NOx emissions. We are also looking at fuel tanks in plastic to support high efficiency in engines and are considering exports of AdBlue and fuel tanks.
What are the opportunities perceived by your company in the lightweight component sector?
What we think can be easily done to save on weight would be the door structures in the interior, trunk, tail gate, floor parts, front end, fuel system, degauss tank, engine covers, engine housing cover, and others. Normally weight reduction achieved is in the range of 20-30 per cent in comparison to the conventional metal parts. Weight savings of less than 15 per cent usually does not make business sense. The opportunity will be that we will become system suppliers and not just a part supplier. This will be enabled through the JV.
What will be the impact of BS VI norms?
Moving to BS VI norms means number of additional components will be added to the existing powertrain assemblies, clearly making the vehicles heavier. It will definitely bring in adequate focus on the fuel economy part, which will have to consider the lightweight technologies in the cars. Yes, all the OEMs are now talking about this. For us the BS VI norms present a big opportunity. However, the point of concern as of today is that they are not willing to pay extra for superior technologies.
What is the company’s roadmap till 2020?
As mentioned earlier, our turnover was Rs 530 crore and by 2020-21 we are targeting Rs 1,160 crore. There has been a lot of back end work that has gone into devising this roadmap. This involves the results coming from four new initiatives as stated earlier. We are anticipating that these four new initiatives put together will account for nearly Rs 300 crore by 2020-21 in our consolidated turnover.
Has the replacement of metal by plastics in vehicles redefined the auto industry? If so, in what way?
To meet BS VI requirement, the auto industry must replace some metal parts by plastic to counter-balance the weight of a vehicle. Plastic content could be anywhere between 10-15 per cent in the overall car in the Indian context. Of course this will grow in the coming years. It will move towards more than 20 per cent in the future. The ideal share would be 30-35 per cent in the Indian context. However, to grow the share of plastics beyond that would be a challenge.
What is the company’s focus on R&D?
The company has earmarked investment of Rs 40 crore for infrastructure and another Rs 30 crore in R&D for the ongoing fiscal. Last year we had invested Rs 35 crore in R&D, which usually is 4-5 per cent of the total turnover. We are in a development phase in which we are replacing metals with plastic components in tractors and construction equipment. Our focus also is on plastic fuel tanks for two-wheelers, fuel filler pipe assembly, HVAC ducts, engine ducts, mudguards (from FRP to plastic) and other functional assemblies. We are adding the LRTM (light resin transfer moulding) process, which was borrowed from our US-based sister concern, Sintex Wausaukee. With our JV, we are looking at R&D in tanks (diesel/gasoline fuel, urea, water, oil, coolant), air intake parts (pipes, snorkel, bellow, filter housing, fan cover) and body parts including dashboard, internal cabin, toolbox, etc.
In what way can light weighting be done in vehicles used on Indian roads?
The engineering requirement has to translate as per plastics from metal. A typical development process would be followed like benchmarking, tear-down, engineering, validation, testing completed at proto level, etc. Subsequently, this would be transferred to production.
How will this impact the vehicle cost?
Normally, since weight reduction achieved is in the range of 20-30 per cent in comparison to the conventional metal parts, it will lead to savings of 10-30 per cent, including all costs.
Is the company exporting its products?
Our export business currently is not much in comparison with the domestic business. The export business could be understood in two ways – direct exports and exports via the OEMs. If we consider the latter then it would be approximately 15 per cent of the overall business. However, if we consider direct exports, then it would roughly be 3-4 per cent of the overall business. This is certainly going to change in the coming years. Our target is that by 2020 we should be able to do direct exports of anything between 15-20 per cent of our overall turnover. We have set up a separate marketing group which will solely focus on the international business. The roadmap for boosting business under exports is being prepared currently and is estimated to be ready in another 6-8 months.
What are the company’s expansion plans?
We estimate that we may have another 3-4 new plants until 2020-21, including the ones coming up under the JV with Rototech. We have added an all-new paint shop in our Chennai facility recently. The new paint shop is best-in-class for the entire region in terms of technology and infrastructure. It is completely humidity-controlled and entirely air-conditioned. We would like to add one more paint shop of this capability at another manufacturing footprint next year.