Nummer eins in Indien
KHS India überzeugt mit Technik, Service und gelebten Werten
Interview with Partho Ghose and Yatindra R. SharmaKHS has been active in India since 1989. In 1997 KHS Machinery Private Limited was founded as a German-Indian joint venture and in 1998 the company started local manufacture. The factory in India is now one of the most successful production sites in the international KHS Group. In the following interview Partho Ghose, executive vice-president and board member for KHS Machinery Pvt. Ltd., and Yatindra R. Sharma, managing director of KHS Machinery Pvt. Ltd., talk about the rise of KHS in India, KHS India's philosophy and the company's future expectations. They also paint a picture of the development of the beverage industry and beverage market in their home country.
Opportunities consistently exploited from the beginning
KHS competence: Growing on a market always means also making the most of your opportunities. Which of the decisions made by KHS do you think were the most pioneering with regard to the Indian market?
Partho Ghose: The first step in the right direction was undoubtedly that KHS defined India as a future market as far back as in 1989, when the first project with PepsiCo India was launched. After India began steadily deregulating and privatizing its national economy at the beginning of the 1990s and when in 1993 Coca-Cola returned to India after being absent for over 15 years, KHS made the decision to set up a local production plant in India. In 1997 KHS Machinery Private Limited was founded and production started up in 1998. Prior to this we gave our people full training at the German KHS factories. The first order under the new management came from Coca-Cola India and consisted of two turnkey glass lines with an output of 6,000 bottles per hour each. The fillers on the line came from the KHS factory in Brazil; all other components were manufactured on site. Considering that at the time we were still working with a small team of just 14 engineers, this was a major achievement! We were thus all the more pleased that Coca-Cola India was full of praise for our technical systems and project management. This resulted in follow-up orders for six more lines in 1999 and in us increasing our personnel to 70.
Yatindra R. Sharma: At the start of the new millennium we also started doing business with smaller soft drinks companies, branching out into the water and brewing industries and extending our production range to include equipment for PET bottling and canning lines.
KHS competence: What about the wine, sparkling wine and spirits sector and the food industry?
Sharma: At present the highly automated equipment we sell is in very slight demand in the wine, sparkling wine and spirits industry. Here, mainly production lines with very low capacities are in use. Thanks to growing sales figures we now predict an increasing need for high-capacity lines among spirits companies in the future, where our turnkey expertise will be of great significance. In the food sector we're proving very successful with a number of individual machines, such as packaging machines and pouch-processing systems, each tailored to suit the specific requirements of the individual companies. Most of our customers here are international big names, including Unilever and Nestlé.
New Ahmedabad factory opened in 2007
Ghose: Let's get back to the historic milestones in our career. One very important event - if not the most important - in the positive development of KHS in India was the decision taken in 2005 to build a new factory in Ahmedabad. We acquired a site measuring 110,000 m2 and built four production shops and an administration building on it. The opening ceremonies were held at the end of February 2007. About 25,000 m2 of the site is currently developed and our investment at the time was about six million euros. If we were to push this project through today, it would cost four times this! We therefore made the right investment at the right time. Within just one year of moving onto our new premises we were able to boost sales from 12 million to 30 million euros. We employed more people and our production shops were very busy right from the start. KHS India now has about 200 employees. In 2014 our turnover reached 40 million euros. So that we can generate more growth in the future and meet the growing demand with speed, we're planning on building two more production shops on our site very soon.
Market share of about 40%
KHS competence: This really does sound impressive. Is KHS India therefore now the main supplier of filling and packaging technology for the beverage industry in the country?
Sharma: Yes, you could say that. Our market share is about 40% which makes us the clear number one on the Indian market. KHS India's main focus was and still is on the soft drinks and brewing industries. At the moment around every second glass bottle and every third PET bottle here are filled and processed on KHS machines.
SERVICE writ large
Ghose: We owe this huge success not only to our outstanding technical systems but also to our full range of services.
Sharma: We believe that only the first project is sold by our sales team. All others are sold chiefly by our service personnel. And this is how we work. We've permanently expanded our service network in full keeping with customer requirements. At the moment we have 40 service engineers working for KHS India. Besides our production site in the west of India in Ahmedabad we also have service offices in the south of the country in Hyderabad and Chennai and a sales and service office in New Delhi in the north. In 2015 we're planning on opening a new service point in Calcutta in East India. In this way we can reach all of our customers in the country very quickly. I can give you a good example of KHS India's speed when it comes to service. Recently, the people from Coca-Cola at a plant in South India, several thousand kilometers away from Ahmedabad, rang us at six o'clock in the evening to tell us that the main drive on one of their KHS fillers had failed. The next morning we flew the relevant spare parts out; our service engineers were already on site when they arrived at the customer's plant. The filler was again fully operational by the early afternoon. This is what I think service should be like and all of our customers appreciate this policy.
Ghose: It's important to mention here that in India we have a large spare parts warehouse where a wide range of spare parts is stocked.
In-house training academy
Sharma: Many companies also consider our full training program to be a composite and indispensable part of our KHS India service package. We've set up an excellently equipped training academy in Ahmedabad specially for schooling our personnel. Here, we offer courses on specific topics anyone can attend and special programs geared towards individual customers. We employ two full-time trainers at the academy and link in teaching staff from German and other international KHS factories if required per video conference. We also like to invite speakers from our industrial partners, such as Danfoss and Siemens, to the academy. This is all done with the aim of generating maximum customer benefit. Since opening our academy in 2009 we've trained many customer employees in both theory and practice on our training machines - from line operator to plant manager.
Ghose: The big concerns especially, such as Coca-Cola, PepsiCo and SABMiller, have joined our training program right from the beginning and they've all had very good experience with it. Time and again they contact us to confirm that these targeted training measures have helped to considerably boost the productivity of their KHS lines. And they permanently praise the fact that KHS India gives their people the chance to take part in an outstanding program of training right here in their own country.
Permanent exchange
KHS competence: Are employees at KHS India also specifically trained?
Sharma: For us, this goes without saying. Of course we use the training center for our own employees, too. Also, there's a permanent exchange between KHS India and the German KHS factories and their competence centers so that we're always up to date with the technology. The machines we manufacture here are made in India but are conform with the technical standards produced in Germany. Our customers can rest assured of this.
Production of a wide range of machines
KHS competence: Do you manufacture the entire KHS machine portfolio in Ahmedabad?
Ghose: We specialize in the components the Indian market and the Regional Center India markets of Nepal, Sri Lanka, Bhutan and the Maldives chiefly require. We're already producing a very wide range of machines. About 95% of the equipment supplied by KHS India is made in Ahmedabad. Some products, such as KHS' stretch blow molders or packaging and labeling machines in the high-performance range, are supplied directly from Germany or from other international KHS plants. Any decisions as to the expansion of our product portfolio - as soon as we detect a larger demand on the market - are always reached together with the KHS management in Germany.
Sustainable systems
KHS competence: A top product range also involves regularly informing customers as to possible machine upgrades. Are upgrades like these popular in India and does KHS have a marketing offensive here?
Sharma: Yes, we do. We provide regular information on possible upgrades both personally and in writing. As a general rule, we're noticing that the issue of sustainability is gaining in significance - both for machine upgrades and new investments. With KHS equipment we can readily meet demands for systems that save considerably on energy and water. Incidentally, our clients are also kept up to date on all other activities at KHS India.
Strong sense of social responsibility
KHS competence: What's typical of the big KHS India family?
Ghose: Our aim is that all of our employees enjoy working for KHS and feel at home in the company. We do a lot here. For instance, we've designed our premises and buildings according to the Indian science of vaatsu to create a feel-good atmosphere. The facilities on our production site include a canteen, a fitness room and a medical center where doctors can be consulted twice a week. We provide an obligatory daily bus transfer to work and back home again for all of our employees. Surveys carried out by an independent institute on employee satisfaction last year revealed that over 80% of all KHS India personnel are very satisfied with the working conditions here. But we don't want to rest on our laurels. We aim to move closer and closer to the 100% mark.
In order to give our Indian customers and also our clients outside India the greatest possible assurance that in KHS India they're dealing with a very employee-friendly company, we recently had an ethical audit carried out, for which we were granted the appropriate certification. The results of this ethical audit can be viewed on the Sedex database. KHS Machinery Pvt. Ltd. is also certified according to ISO 9001, ISO 14001 and OHSAS 18001.
Sharma: We present ourselves as one big family who takes responsibility for the region it's based in. For example, we support nearby schools by providing teaching materials, computers and financial assistance so that the students can have a warm meal every day.
Further awards
KHS competence: Has KHS India won any awards besides the aforementioned certification?
Sharma: The accolades we receive directly from our customers are also very important to us. We're very proud of the fact that we were recently given the Coca-Cola Best Supplier Award in the production systems category for the third time running, for example. We've now won two golds and a silver. No other company has managed this yet!
Ghose: Germany's Chamber of Commerce recently presented us with another excellent award. In 2013, out of around 600 member companies it voted KHS India Best German Joint Venture in India for the second time.
Ongoing success
KHS competence: Does the development on the Indian beverage market suggest that the KHS India success story will continue?
Sharma: When looking at the national beverage market you must bear in mind that people in India have a very low income, especially in rural areas. The World Bank reckons that over 40% of today's Indian population has to survive on less than one US dollar a day. This explains why the per capita consumption of bottled beverages is way below that in other countries. For example, the amount of bottled water drunk per head and year is 4.5 liters, with 3.5 liters of non-alcoholic soft drinks and 2.2 liters of beer consumed a year. By 2020 we're budgeting with an annual 10 to 15% rise in sales for all of these beverage segments. For KHS India this forecast means further opportunities for growth which we'll also be exploiting in the future. We estimate that by 2020 we'll be generating sales of around 100 million euros per year. We also want to boost our turnover by entering new areas, such as the dairy industry, for instance. And of course we want our exports to grow. Our main export markets are primarily in Australasia and include not just China but also the Philippines, Laos, Vietnam and Australia.
KHS competence: How high are KHS India's exports at the moment and what are your calculations for 2020?
Ghose: Last year we exported about 25% of our products. We're reckoning on this figure increasing to 40% by 2020.
Company objectives
It's important to mention here that increasing our sales and exports is an important goal for KHS India but this doesn't take first place. We consider it our top priority that our employees see KHS India as a very good, if not the best, employer in the country. It's also just as important to us that KHS India is and remains first choice for our customers - because they see us as the leading company for machine and line quality, project management and service. Once we've reached these goals, we believe that the aforementioned growth in sales and turnover will automatically follow.
Sharma: All told, we're convinced that KHS India's story of success will continue primarily on the basis of the values we consistently practice. In the future we'll continue to move purposefully forwards.
KHS competence: Gentlemen, thank you very much for this interview.
Quotes from Partho Ghose:
"KHS India now has about 200 permanent employees. In 2014 our turnover reached 40 million euros."
"We consider it our top priority that our employees see KHS India as a very good, if not the best, employer in the country."
"KHS India recently had an ethical audit carried out, for which we were granted the appropriate certification. KHS Machinery Pvt. Ltd. is also certified according to ISO 9001, ISO 14001 and OHSAS 18001."
Quotes from Yatindra R. Sharma:
"Our market share is about 40% which makes us the clear number one on the Indian market."
"At the moment we have 40 service engineers working for KHS India. Besides our production site in Ahmedabad we also have four service offices throughout the country."
"We've set up an excellently equipped training academy in Ahmedabad specially for schooling our personnel."
