“The ushering in of the LED industry in India is a result of my research work at IISc

Wednesday, June 18, 2014: K Vijay Kumar Gupta, managing director, Kwality Photonics Pvt Ltd, commands tremendous respect within the LED industry. A gold medallist in electronics engineering from IISc, Bengaluru, he has dedicated a number of years of his life to research on LEDs. A passionate academician, Vijay Kumar Gupta prefers calling himself a scholar or scientist rather than a businessman.

He has established a successful business, inspiring many entrepreneurs to take a cue from him. Having spent 35 years in the industry, he has in-depth knowledge and experience in varied fields. Because of the high regard the industry has for him, he has held positions of responsibility, including being a past president of ELCINA and of Electronics Industries Association of AP (ELIAP), apart from being a core member of DeitY’s workgroup on materials and photonics. Meet this trail blazer as he speaks to Richa Chakravarty of Electronics Bazaar about his passion for LEDs and how he made a career out of it.

The entrepreneurial seed in me came from my father K C K A Gupta, who was a high school graduate but a businessman with a passion for technology. He had set up Kwality Electricals Pvt Ltd (KEPL), a small scale unit (SSI) in Hyderabad in 1966 to manufacture lamps and lamp components. But his business kept him confined to Mumbai, where I was born in 1953 and raised with my three sisters and younger brother Srinivas, who was a Mumbai University topper in Master of Engineering (ME) Civil. We were both inclined towards academics and sports.

My academic life was the foundation of my life

I was a first ranker throughout my academic life. My propensity for research helped me to make electronic gadgets in my ninth grade at school, which were good enough to win prizes at science fairs. It also helped me to complete an electronics course in the 10th standard from the British Institute in Mumbai and build shortwave SSB transceivers such as HAM, much before I had a formal degree in electronics from the Indian Institute of Science (IISC), Bengaluru. I also had a foundation in physics, chemistry and mathematics from the best colleges like St Xaviers and Ramnarian Ruia College in Mumbai.

I consider the three years I spent at IISc (also called the Tata Institute) as the best years of my life—a great scholarly ambience, a library with fantastic tech journals, unfettered freedom to take any number of additional courses across any department, excellent hostel life, and great faculty and research guides. These three years not only formed the basis of my career but were filled with some of the most enriching experiences in my life. I passed out from IISc with a gold medal.

My research paved the way for the rest of my life

When I was in college, LEDs had just been invented. Since my father was into the filament bulb industry, we knew that what he was dealing in would become obsolete once LED lighting started dominating the market.

This foresight helped me decide to do research on LEDs in 1975, almost 35 years back. Right after my college, I had a three-year stint as a scientist working on solar cells/displays for a DST project at Central Electronics Ltd (CEL) in Delhi, which was like a God sent gift.

In 1979, I returned to Hyderabad to join my father’s lighting company, at the age of 26. Soon, I left for Japan where I spent four months at a Stanley subsidiary for training in filament coiling. The values I acquired in those four months, particularly the Japanese work culture—loyalty towards the company they work for, the concept of lifetime employment, etc—had a huge influence on my personal character and value system, thanks to which I am less a businessman, and more a scholar and a scientist.

When we were upgrading technology at KEPL we set up a tungsten filament coiling plant, brought from Japan. Later we set up another plant for the captive hot wire drawing of tungsten and molybdenum, and one more unit to make auto bulbs. During that time, I had convinced the department of energy (DoE), Government of India, with great difficulty that LEDs can be made by small scale units as well. They finally gave us the licence for only manufacturing 100,000 LEDs per annum, which was a two days’ capacity for an LED factory. So we waited till 1987, when licensing became more liberalised and import duties reduced to 30 per cent.

I had started the company with Rs 0.35 million, with my brother in-law, T Prabhakar, who joined me with all his resources.

We first manufactured through-hole LEDs in 1987 and, later, LED segment displays in 1993. For the latter, we required a different set of machinery; hence, we started Kwality Photonics Pvt Ltd. Production of white LEDs began in 2003 in Kwality Photonics. So both the companies have a different portfolio of products. Kwality Electronic Industries produces through-hole LEDs in different colours, while Kwality Photonics makes white LEDs of low, medium and high power as well as segment displays.

Today, we have four manufacturing facilities—Kwality Photonics has two units, Kwality Electronic Industries has one unit and Kwality Electricals has one unit.

We started the LED division with just 10 people. We hired unskilled and semi-skilled people and trained them in-house for three to six months. We not only trained our employees but also standardised the processes to consistently get the right kind of properties in our LED products. We adapted ISO 9000 in 1991 itself.

Surprisingly, the government did not give us any support for bringing a new technology into India. On the other hand, we had to struggle to get the licence. There was absolutely no policy in favour of manufacturers then, neither is there one today. We always took loans whenever we expanded our facility. Once we had applied for a government subsidy, and our application was accepted. But we received the subsidy four years later when all our requirements had been already met through loans.

MIC Electronics, ITI Ltd (telecom) and Bharti Telecom were our first customers. In those days, every pushbutton phone had an LED. Back then, gaining acceptance for an Indian LED brand was difficult, as many international brands like HP, Motorola, Liton, etc, were de facto global standards. We had to compete with these companies, and hence our products needed to have zero defects.

Entering the LED segment was difficult enough and so was surviving in the market. Gaining the trust of our customers was a major challenge. To get an edge over the international brands, we used to offer brighter LEDs. Another edge we had was that we were a premium priced product, and in the days when importing was difficult because of several delivery issues, we offered timely and quick delivery. Also, there were some Chinese LED products in the market that were not of good quality; so our company benefited.

I was determined to survive against all odds. We were then importing components from countries like Japan and Taiwan, and needed a lot of foreign exchange. But in the 1980s, there was a severe shortage of foreign exchange. We had to go through a lot of paper work to justify why we needed the foreign exchange. This was the worst phase of my business as far as government policies and regulations are concerned.

Therefore, we had to limit our production and manufacture only for our high end customers, including ITI Ltd—we were the first LED manufacturer that ITI approved. That certainly helped us to improve our performance as we continued with smaller volumes but higher profit margins.

Manufacturing in the technology sector in India was a big challenge in those days as the local capital goods industry in India was not sufficiently developed. There was hardly any supply chain in India and, hence, we were totally dependent on the overseas supply chain. I remember when we placed an order for filaments in Japan, the mail would reach the vendor after 15 days and we would receive a reply in 30 days. There was no scope for negotiations. We used to just open the letter of credit and wait for the goods to arrive. To cut down on the time wasted, we bought a telex machine.

However, today the process works so fast. We can find a new vendor in the morning, and by evening, the vendor is well researched, quotations have been received, two rounds of bargaining done, and the order is released—all in just one day.

Today, the Kwality Group of Industries, which includes Kwality Electronic Industries and Kwality Photonics Pvt Ltd, is India’s largest producer of LEDs, LED displays and optoelectronic products, and almost every recognised Indian electronics company is a customer of Kwality Electronic Industries. I feel proud to say that Kwality was not only the first Indian company to have successfully established LED production in India but also commands the highest market share in domestic sales. In fact, I could say that the ushering in of the LED industry into India is purely a result of my extensive research work at IISc, Bhabha Atomic Research Centre, Tata Institute of Fundamental Research and at CEL.

My management mantra

I believe in hands-off management, and delegate work wherever possible. I just let my people know what results are expected, but refrain from telling them how to execute their job. This forces people to think independently and brings their talent into play. It also promotes a sense of responsibility, harmony in the workplace, and increases bonding among the staff members.

Moreover, management should be driven by systems. We use ISO 9000 systems to the hilt. Everyone’s role in the company is well defined, every eventuality is well listed, and the reactive and proactive actions are defined. So that sets the benchmarks as well as the conditions everyone has to work within.

My primary task is to monitor our communications with customers, which is something we give a lot of importance to. Since most of our raw material sources are abroad and our needs are constantly evolving in terms of technology, price and volumes, I handle the pre-purchase process as well. Strategy, product R&D, and technology forecasting occupy a lot of my time.

A sustaining relationship with academia

There are so many aspects to a business that engage one’s intellect. My experience in the LED industry gives me several opportunities to get involved with the industrial, business and academic communities, which I cherish. Each of these events exposes me to so many new issues that expand my knowledge horizons.

I also love to sustain relationships with academia, and keep in touch with scientists in the field of materials and optoelectronics, at IIT-M, Nagpur University, Anna University, Mumbai University, etc.

Along with this, I also headed the All India and State Electronic Industries Associations, and have had the privilege to sit on a few technical committees in the Ministry of IT and Communications.

I understand the hardship and efforts students put in during their project work. So, at Kwality Photonics, we always welcome BE and diploma students who require training or need help in their research work. Every month, three to four colleges visit us. We have trained over 200 batches till now and also give them technical tours.

A close knit family

Amongst all these professional responsibilities, I sometimes tend to neglect my family. Maybe I take this liberty because I know how well they understand me.

My life revolves around my four pretty ladies—my wife Sandhya and my three daughters. My wife is a doting mother and an amazing life partner. She is a perfect home maker, leaving me free to pursue business and research.

Although my daughters are married, we are still a close knit family. My eldest daughter, Swati, is a BE and an MBA. My second daughter, Preeti, who is settled in Dubai, is a PhD in biochemistry. And my younger daughter, Aarti, is a chartered accountant settled in USA. My sons-in-law SreeHarsha, Rakesh and Kaushik are highly qualified and hold respected positions in their professional careers.

Outlook for the future

Despite being the pioneer in LED manufacturing in India, Kwality Photonics has remained a small player by global standards, in a sector that is dominated by Chinese imports and characterised by fast-paced technological advancements. Entrepreneurs like me hesitate to invest in capacity expansion or upgrading technology because the Indian solid state lighting industry lacks an ecosystem and a capital goods industry. At the moment, raw materials like chips, epoxy, gold wire, aluminium wire, silver epoxy, etc, all have to be imported. Moreover, the threat from low cost Chinese suppliers looms large. While we were supplying LED displays for Rs 10, imported products were selling at Rs 2.50 to Rs 3. Although we have been able to bring down our price to around Rs 4, the Chinese continue to beat us on price.

But I have great hope in the National Policy on Electronics 2012 to provide the required fillip to the industry and invite investments from large players. Yet, the policy is not good enough to encourage the existing industries or medium scale players. In the absence of a clear commitment from the government, there is no reason for us to risk investments in a technology market that has a very high rate of obsolescence.

To explain further, while the government has indeed notified that domestically produced LED products will get preference, but the appropriate BIS certification can be obtained only after these products undergo the LM80 test, which can only be performed overseas! Besides, it takes anything up to nine months for results to come in, and requires an investment of nearly Rs 1 million per package and per rating. This is quite a big challenge for us.

However, we are planning to open a new unit under the Modified Special Incentive Package Scheme (MSIPS). Hyderabad already has an IT hardware park and now ELIAP is developing an electronics manufacturing cluster (EMC). Almost 50-60 members of the association will be a part of this EMC. I am enthusiastically supporting this new venture, which will help immensely in developing the electronics industry in Andhra Pradesh.

At Kwality, we are now evaluating new packages and technologies. We are entering into the automotive segment. Our uniLED LED automotive lights fit into every tail and blinker fitment.

My continued work to help youngsters to turn into entrepreneurs, through free student has inspired me to chair the Hyderabad chapter of CII—Bhartiya Yuva Shakti Trust (BYST). Through this trust, we not only help budding entrepreneurs get collateral-free loans from banks to set up their new ventures but also provide one-on-one mentoring by successful industrialists or businessmen who wish to volunteer.

Electronics Bazaar, South Asia’s No.1 Electronics B2B magazine