The Power Of I 2018

Learning Machine

This Aurangabad SME lords over machine tools

Soumik Kar

It’s a feat that even big companies will possibly be envious of. The Kelkar family from Aurangabad has created India’s leading machine tool exporter in an industry which is import-dependent. Despite being a small enterprise, Grind Master has developed an edge in the microfinishing business thanks to its 60-member dedicated engineering team and a penchant for leveraging collaborations with global leaders. With more than 50% of its revenue coming from exports, Grind Master is now focusing on robotics and automation even as it makes inroads into the next big automotive opportunity — electric vehicles. By thwarting the Japanese and Germans in a market like China and establishing an absolute monopoly back home, Grind Master has emerged as an unlikely poster boy of Indian manufacturing.

It’s hard to miss the mathematical expression painted on a red and white metal board on the shop floor of what is arguably India’s most innovative metal tools company based out of Aurangabad. Explaining the context of the expression, Milind Kelkar, who co-founded the company along with his spouse Mohini, says, “If an individual puts in 99% effort daily for 365 days, at the end of the year, he would have improved by 3%. But with an additional 1% effort every day, the outcome at the end of the year is phenomenal.” It’s this philosophy that the production engineers from VJTI embraced to create a pioneer in special purpose machines for metal finishing, deburring, microfinishing and robotic automation. What makes the journey of the $25 million company fascinating is the sheer grit of the founders when they ventured out on their own in 1984.

It was during a chance conversation with the Bhogale family, owners of Nirlep Appliances that the Kelkars came to know of the trouble Nirlep was facing in getting the right finishing for its cookware. Milind, who was then working with Telco (now Tata Motors), and Mohini, who was employed with Traub India, took a vacation and spent the time building a polishing machine prototype at a rented garage. Buoyed by the fact that they could create a machine from scratch, the duo decided to focus on building buffing machines for the cookware industry. Though an automotive company offered the option of setting up a captive unit, the duo decided against becoming an ancillary to a company. “After the meeting, we felt that being on our own would be more fulfilling than being at the mercy of a big company,” recalls Milind. Dipping into their combined savings of Rs.27,500 and a bank loan of Rs.120,000, the Kelkars got ready for the entrepreneurial grind. Post Nirlep, the Kelkars made their first commercial sale to Deval Utensils, known for its high quality silver-plated brassware. Soon, major kitchenware players such as TTK Prestige, Hawkins and Kishco Cutlery became Grind Master’s clients and till today continue to be so. The only difference is that cookware now contributes less than 10% of its total turnover. “Barring a few, most cookware players don’t find it economical to automate the polishing process given the wafer-thin margins and availability of cheap labour,” explains Milind.

While the initial years was all about cookware, Grind Master in 1989 showcased its first automatic belt grinding machine using coated abrasives at IMTEX, the flagship expo of Indian machine tool manufacturers. It was here that a senior executive at Bharat Forge (BFL) gave the company its first break in the automotive business. Till then grinding was a tedious exercise for the Pune-based forgings major as it used to ship front axles to Mundhwa where the villagers would grind the excess material off the axle. Since the first order for a belt grinder for deflashing of forgings, BFL continues to be a prominent client followed by Precision Camshafts. “There is practically no year when we haven’t built a machine for BFL. It’s an ongoing partnership,” says Milind. BFL’s president Sushant Pustake is also happy about the alliance. “They have never played the price card and have indigenously developed machines that match up to international standards. They never gave us a reason to look at other international microfinishing suppliers,” says Pustake. Till date, the company has sold 21 machines for crankshaft finishing to BFL and 18 machines for camshaft finishing to Precision. Ajitkumar Jain, general manager, Precision Camshafts, says, “Grind Master is totally focused on the customer’s pain point and offers the exact solution. Once we had an issue with machine sensors, they came up with magnetic sensors and the issue was resolved. This agility is of high importance and they actually act as partners.”

In fact, every new client that Grind Master has signed on since its inception has resulted in the company moving up the technology curve. For instance in 1992, a team of five executives from TI Cycles landed at Grind Master’s factory. Those days given the curb on forex remittances and high customs duties, TI Cycles was scouting for a company, which could make an indigenous rim-polishing machine. “The landed cost of each imported machine was more than Rs.10 million and given the economics of the bicycle business they did not want to invest such a huge sum,” recalls Milind. Back then only ti and Hero had an imported machine each. For the husband-wife duo, the challenge was that the machine was longer than the length of their existing shop floor. Since Grind Master had just purchased a plot, which housed a razed down unit, the team built the machine under a tarpaulin roof, in 10 months at a cost of Rs.2.5 million, one-fourth the landed cost of an imported one. Being sceptical about a rookie enterprise building an import substitute machine in such a short span, ti sent a truckload of rims to test whether the machine could deliver what it promised. Rest, as they say, was history. “Building the machine gave us confidence that we could do complex things. Complex from the point of mechanical engineering as well as controls,” mentions Milind. But it was in 1994, that the company found its métier: microfinishing.

Perfect finish

The life of engine and transmission parts depends on its finish, and microfinishing is a process that generates the final surface texture required for enduring performance and reliability of these automotive components. Grind Master’s tryst with the technology began in 1992, when Milind went to an exhibition in Germany where he saw a device using poly film backed abrasives for high quality surfaces. Back with just a leaflet of the product, Milind and his team worked for nearly two years building a machine incorporating the new type of abrasive. “In engineering parlance, the first principle is that the product is just a concept. We built our own product using film abrasives,” mentions Milind. A year later, a visit by Mike Sterner, business development manager at 3M, the company that coined the term microfinishing, changed the fortunes of Grind Master. Impressed by their ability, 3M invited the founders for formal training in abrasives at its technical centre in Minneapolis. “The company saw in us the potential to put out a large number of machines using film abrasives in the market,” says Milind. It was here that 3M nudged Grind Master to get talking with IMPCO, the US-based company which had been building crankshaft finishing machines since the 50s. In 2003, both the companies signed a collaboration agreement. As part of the agreement, Grind Master also began building machines for IMPCO to be sold in China. However, the whole process of building machines at Aurangabad and shipping them to the US before re-exporting them to China, was not just time consuming but also not financially lucrative for IMPCO. So, in 2009, the company asked Grind Master to handle the China market. “When the offer was made in the US, I didn’t even visualise that we would ever be selling machines in China,” recalls Milind. Since Grind Master would now be selling directly in China, Milind’s search landed him at Balance Engineering, a US company which was selling crankshaft balancing machines in the Asian country. Since, the microfinishing machine offered synergy with the product it was selling, Balance Engineering became Grind Master’s sales agent. 

The alliance paved the way for Grind Master to enter China and, eventually, end up with a lion’s share of the microfinishing market. The same year the company signed on its first Chinese client, BYD, in which Warren Buffett had invested $230 million in September 2008, which also was its first big export order worth $450,000. Since Balance Engineering supplied to General Motors (GM) in China, Grind Master got a foot in the door to showcase its technology. Recalling the turn of events, Milind says, “Since microfinishing comes at the last stage of the manufacturing process, changing a microfinishing supplier is not feasible. Hence, GM really wanted to be sure that we could meet their standards.” But bagging the deal was far from easy as the car maker wanted a machine with three stations that had to shift from making part A to part B within 20 minutes. “For the same process, the existing machines sourced from German suppliers were taking 120 minutes, on an average,” elaborates Milind, who accepted the challenge of not just building the machine but also making it the fastest in terms of turnaround time.

Machine builder

Back home with a three-week deadline to meet, Milind and his team got down to designing the machine through the help of 3D designing, but since the operation was complex, explaining through drawings was a challenge. “We knew in our heads how the machine would eventually look and function, but we couldn’t represent it even through a 3D drawing,” reveals Milind. Instead, the team built a mini prototype and Milind carried it along with him to China, a good two weeks beyond the stipulated time. “I told them I wanted to showcase something concrete and they were kind enough to repose their faith,” says Milind. At the meeting, with the help of a spanner, Milind operated the prototype on the table, and that proved to be the clincher. “Much to the chagrin of the German supplier, GM gave us the order in 2010,” smiles Milind. The export order, worth $1.5 million, was its biggest-ever and since then Grind Master has not lost a single -order to rival suppliers. “It was not just about the technology breakthrough, we had met the stringent GM Standards that ran into 11 volumes. They, too, helped us achieve that by coming down to our plant and guiding us through the process when the first machine was built,” adds Milind. Since then the company has been dominating the microfinishing market in China supplying to automotive clients such as Dongfeng Honda, Great Wall Motors and many more. 

Given the importance of greenhouse emissions and energy efficiency in pushing the limits of powertrain engineering, lightweighting and friction reduction are two key aspects that automakers are most concerned about. These require a stringent surface finish and geometry parameters, which Grind Master has perfected over the years. By proving its engineering prowess, it is not just ruling the market in China but also in India. In China, having sold over 200 machines till date, the company enjoys 35% market share and back home, it has effectively blocked out the Germans and the Japanese. “Since 2003, competitors from these two countries haven’t sold anything in India as we are providing competent products in the Rs.7.5 million to Rs.80 million range,” claims Milind. 

A new route

Even as the going is good, the company is cognisant about the winds of change blowing across the industry. While nearly 55% of its revenue comes from the automotive business, the Kelkars have started building microfinishing machines catering to electric vehicles (EVs) besides looking at other verticals such as foundries and robotics. Currently, conventional internal combustion engine use crankshaft and camshafts, which are rods that extend through the engine and are connected to different parts of the engine by belts or chains. In an EV, the use of electric motors does away the need for these components. “EVs may not come in as dramatically as people expect, but we have taken a view that 30% of vehicles by 2030 would be electric. Hence, our assessment is that investment in the conventional ICEs will start coming off in another five years,” mentions Milind. 

Spearheading the company’s foray into EVs is the Kelkar scion, Sameer, who joined the business in 2010 and is now the CEO and R&D head. “We believe EV is a leveler when it comes to technology as anyone who starts out now will have the first-mover advantage in the years to come,” mentions Sameer, an avid mountaineer and explorer. 

Since electric motors need superfinishing and deburring operations, the company has supplied machines to Lucas in India. It also supplies machines to Renault, the leader in EVs with over 22% market share and to Germany’s Getrag, the world’s largest supplier of transmission systems for passenger cars and commercial vehicles, for its plant in China. In an EV, the cylinder head and block is replaced either by two or four motors and those motor housing castings weigh the same. “We have provided robotics for deburring and flashing of these castings,” mentions Sameer. 

In 2012, the company ventured into robotic automation and has been working on developing exclusive robotic technologies such as handling of hot jobs, precision deburring of critical parts and since 2015 forayed into automation for foundries. Fettling (removal of unwanted metal) and deflashing (removing excess molded material) of castings is an extremely hazardous process in foundries. “We work with suppliers such as Kuka and ABB and are one of the very few companies worldwide who offer robotic automation for these processes,” says Sameer. Elaborating on the solution, he adds, “Robots constitute just 15% of the total cost of the solution. It’s the balance 85% where a lot of value addition happens at our end in terms of machine, software, tooling knowhow and the application itself.” Some robotic solutions can cost upwards of Rs.25 million, like the one the company is building for a foundry in Mexico. Incidentally, the company is looking at Mexico as the next big opportunity after China. 

“Though the US and Europe are mature markets given their size, we believe Mexico will be the next China as far as foundries for automotive castings are concerned. In the foundry segment, we are currently clocking revenue of Rs.200 million and believe it can go up to Rs.2 billion in four-five years,” reveals Milind. According to a report by Zion Market Research, the global robotic cutting, deburring, and finishing market currently worth $500 million is expected to reach more than $1.3 billion by 2024, clocking a CAGR of 15%.

Cranking it up

With relentless focus on exports the company has emerged as the top machine tools exporter, winning the EEPC national award three years in a row. Explaining how it has managed this feat, Milind says, “Our objective since the beginning has been to stay away from ‘me-too’ business as there it’s only about cost and if you continue to build low-cost products then these products no longer remain export worthy.” An order-book of over Rs.1 billion might ensure that the company ends the current fiscal with a turnover of $30 million. “We have never been target-driven but remained more focused on the right opportunities,” adds Sameer. 

Thus far the company has relied on several collaborations to gain scale. Besides IMPCO, it has a technical collaboration with VSM of Germany for manufacturing and selling coated abrasive products, Fuji Star of Japan for film-backed abrasives and with Netherlands-based Timesavers International for deburring technology. Besides, it has also entered into marketing tie-ups with companies in Greece, Holland, UK and Switzerland. 

Interestingly, the company recently entered into a strategic agreement with the US-based MJC, the leading manufacturer of advanced CNC metal forming machines for flow forming, a technology used to create lightweight parts not just for aerospace but also for the automotive segment. “MJC is a big supplier of rocket and satellite shells to NASA and we are using their technology to create solutions for the automotive and defence segments in India,” mentions Milind. The company is in talks with Isro, L&T, BFL and ordnance factories to sell the solutions, which are priced around Rs.40-50 million. In a bid to gain scale, the company last year acquired France’s SPMS Supramatic. “France is not one of the leading countries in Europe today, such as Germany. But the French have substantial influence in South America. So we were looking out for companies which were selling not only in Europe but also in South America,” adds Mohini.

What is helping the company achieve new milestones is a pool of 60 engineers out of its total workforce of 300. “We have a dedicated team of 10 engineers working on research, ably supported by 50 in the development of new ideas, systems, and processes,” mentions Sameer. With close to 5,000 installations worldwide and accounting for almost 25% of India’s machine tool exports, it’s not surprising that Grind Master is the cynosure of willing buyers. “We are not up for sale,” smiles Milind, who dreams, thinks and builds machines.