Directing Growth of a Company

In order to give the best illustration for the title of this article we have selected Bharat Forge as an example. The Company will shortly become the world’s largest forging company. In five years, a burst of growth and globalization will see it whiz past its German competitor as the No 1 maker of tough-to-make metal components like axles and crankshafts used in automobiles. Its client list reads like the who’s who of the industry – Toyota, Audi and BMW among several other marquee names spread across continents.

The company’s success is incredible. At the turn of the century, India’s automotive component export was a mere $450 million. Even five years ago, the industry’s best known success story remained a much-talked about order Chennai-based Sundaram Fasteners won for making radiator caps for General Motors. Baba Kalyani is the man behind it all to pause after these years of hectic activity and consolidate his company’s position.

In the last 18 months, Kalyani has been toying with the idea of moving on beyond forging. He has identified five new areas of business – energy, transportation, construction, infrastructure and aerospace, all high tech areas that require forging components to drive business. Kalyani likes reading industrial history to find out how companies evolve.

This man Kalyani admits that a little impatience is a virtue, his first few years at Bharat Forge appear rather smug. Kalyani studied in a boarding school since the age of six until 22, when he finished his post graduation in mechanical engineering in MIT. In the military school, Kalyani loved the outdoors and was prone to activity.

In the days of industrial licensing when automobiles were considered a luxury and taxed heavily, there were few big forging companies around. Kalyani turned around the family business and doubled sales for the next five years. It was celebration every year.

As automobiles had long waiting lists in the 70s and 80s there were no dearth of orders. In the early 80s Kalyani made his first attempt at exports. As foreign exchange was a hard-to-get commodity those days, he thought that exports would help him import machinery for his factories. His products ended up in Russia.

Then in the mid-80s, when the government first opened up the automobile sector for foreign collaboration, Japanese companies Toyota, Mitsubishi, Mazda and Nissan came to India. Since import duties were high, they were willing to source a few components from Bharat Forge.

Kalyani who could finally put his technical prowess to test, toiled personally with the Japanese on the shop floor. We made it a success, but it was very frustrating because we had old technology lot of manual labor and were never able to get consistency.

In the last 10-15 years, several forging manufacturers in the West shut shop after the growth in their power industry flattened out. In his quest to build the new business, Kalyani is seeking professionals who worked in these companies.

Bharat Forge has already set up a center for advance manufacturing to make forgings for transportation and aerospace. Shortly he has put up another factory there to purely cater to the booming aerospace industry.

Kalyani In trying to attract scarce engineers and train his shop floor employees, he is constantly trying new initiatives that have ensured him a good supply of technical manpower. He has tied up with and sponsored several polytechnics to train diploma engineers to later absorb them in his company.

In the global market too, he has planned a few such initiatives. Through the companies he acquired in Europe, he is working with a few local universities on research projects to develop new technologies. Over half a dozen such projects are running concurrently in areas such as metallurgy and energy.

In the automotive business, technical knowledge is low and process content is high. In these new areas of business, it is the opposite.

He points out that in the aerospace sector there is only one Hindustan Aeronautics in India which has a talent pool. But abroad, there are at least 50 companies who are in the business.

The Chief of Bharat Forge spends 70% of his time traveling to grow his new businesses. In future, he expects to devote most of his time on the technology side of the business getting people together, putting structures in place and facilitating the development of high-end technology.

The above efforts from the leader of the company gives a clear cut impression about the driving force and how a single man lead his team and achieve growth quite at a faster rate.