EM talks with Mr. Puneet Shukls, CEO Saison Components about digitization, Indian electronics industry growth, manufacturing challenges and the company focus for this year.
What are your views on Indian economy progressing towards new digital age?
Suddenly removing 86% of a country’s currency from circulation without having an adequate supply of new notes ready to take their place is a very big thing for a country’s economy. India being a country which is most reliant on cash than any other country in the world had a big fight.
Suddenly hundreds of millions of people were left without the means to engage economically, to buy the things they wanted and needed, and myriad businesses were left without a readily available mechanism to receive payment for their goods, to buy supplies or even pay their staff.
The idea behind this move (demonetization) was seen in very less time that apparently it pushed millions of new users into country’s digital economic grid by virtual fiat.
Until this campaign, India was an incredibly cash-centric economy. Cash accounted for 95% of all transactions, 90% of vendors didn’t have card readers or the means of accepting card payments, around 85% workers were paid in cash and almost half of the population didn’t have bank accounts.
How was year 2016 for Saison and let us discuss the market growth?
Year 2016 was good for Saison as we did quite well in almost all the segments we were focusing for the year. We got a good share of the market from the consumer, lighting, renewable industry. Talking about the growth, we can have a very clear idea of that from the recent study of Ernst & Young (E&Y) the Indian electronics and hardware industry is expected to grow at a CAGR of 13% to 16% during 2013-2018, and to reach USD 112 to USD 130 billion by 2018 from the previous year’s level of USD 75 billion.
Moving in 2017, what will be your key focus?
As we are growing continuously, so is the technology. Keeping in mind the pace of technology transitions one has to update so as to align with the trend.
Nowadays our country is moving towards a digital era so numerous projects initiated by the government like Digital India, Smart Cities, wider broadband connectivity, e-governance programmes and so on which are driving accelerated adoption of electronic products. Growth of the electronics product industry has started driving the expansion of the electronic component industry as well.
Can I have your future outlook on electronics industry growth in India? What are the biggest opportunities?
As said before, because of the transition to the digital era, the electronics industry will definitely get a boom.
The biggest opportunities however will be the IOT, Smart Phones, POS, CCTV, HEV etc.
Can you share your words with our readers on making India a great nation, a strong manufacture?
To be a strong manufacturer one has to have a good range of qualified manufacturers of components with them. Because to manufacture an excellent product, good quality components have to be used so that it lasts long. The other important aspect is the price, the price of the components used in manufacturing a particular product has to be competitive only then it can compete globally and in the market.
To compete globally with the global manufacturers the strongest point India has is the cheap labor cost.
So combining all (price competitive, good quality component) along with cheap labor cost India can be one of the top manufacturing hub in the world.
We would like to have your say on electronic component manufacturing advantages & challenges.
There are many advantages & challenges with respect to the electronic components manufacturing like the strong local demand for consumer durables and mobile devices will be an advantage however the high capital cost & inefficient supply chain for raw material will be a big challenge.
Again the growth of niche markets, specialized EMS players in automotive and strategic & medical electronics can be an advantage and non-availability of advanced manufacturing equipment can be a challenge.
The rising labour cost in the western countries & now also in Asia will also give India the advantage as the labour cost is much lesser here. However, the unfair level playing due to high cost of finance as compared to other countries.
More outsourcing of manufacturing by Indian & global OEM’s who are looking for a larger share of the Indian market can be an advantage and on the other hand lack of availability of skilled labour, capability limitations, inverted duty structure and lack of access to new technology can a challenge.
But the economy and the development is sure to go up in the coming years.
