‘Make in India’ has been in the headlines for a while now. In an attempt to showcase the strengths of this campaign and how the electronics industry is responding to it, Electronics Bazaar is introducing a new section dedicated to this initiative. In this issue, we catch up with the top shots at Deki Electronics, a company that has been around for a long time in the Indian electronics manufacturing sector
The ‘Make in India’ campaign launched by Prime Minister Narendra Modi has invigorated the Indian electronics industry. While foreign manufacturers are planning to set up their manufacturing units in India, domestic companies that have been competing with Chinese imports for years, are looking forward to a brighter future. There may be a long way to go for the complete implementation of the campaign, but the electronics manufacturing industry in India has already started enjoying its benefits. Deki Electronics, one of the oldest players in the Indian electronics manufacturing sector, is a good example of an Indian firm asserting itself on the manufacturing front. Electronics Bazaar showcases this company’s journey.
So began the journey
It all started in 1984 when retired squadron leader Jai Kumar (chairman of Deki Electronics) began his quest to find a sector that he could invest in. After doing some research, Kumar decided to enter the electronic film capacitors field, as the country would need them in vast quantities in the years to come. While doing his homework, he stumbled upon a company in Japan called Okaya Electric Industries that manufactured these capacitors. Not much later, this Japanese firm was willing to share its technical knowhow with Kumar and also give his new venture a few machines. A deal was signed between both companies, and Deki Electronics was born. The first machines were set-up in the company’s old factory at Sector 10, Noida, in Uttar Pradesh.
Deki Electronics achieved a production capacity of 15 million pieces of electronic film capacitors within a year. Today, its capacity is a whopping 1.2 billion pieces annually.
The secret behind the company’s name
The chairman once visited a Tibetan friend’s house and met his little daughter who was beautiful. Her name was Deki. When he wanted to know the meaning of the name, his friend told him that the word means lucky in Tibetan. So that was how the company got its name.
The company’s product portfolio
Deki Electronics has two production units. The older one makes plastic film capacitors, which is the most important product in the company’s portfolio. The other unit, which was started a few years ago, makes new innovative products like the electronic footfall index machines that are sold under the brand name Sure Counting. These machines are used by retail outlets like franchises for Puma, Adidas and Nike, among others, to measure the number of footfalls during a particular period of time. This data is forwarded to the brand managers via GPS so that they can keep a track of their businesses. This also helps the franchisees to be more accountable to the brand owners. Other products made in this unit include tags that are attached to products in big shops to prevent theft and a capsule which expands into a napkin when put into a bowl of water (something that’s popular in restaurants).
Machines used for manufacturing
There are two types of machines that are used at Deki Electronics—inductive and non-inductive. Maximum volumes come from the inductive line, accounting for 70 per cent of the company’s total output. The balance 30 per cent of the production is done by the non-inductive machines. But in terms of revenues, the situation is reversed, with 70 per cent of the company’s revenues coming from the production done by the non-inductive machines.
The initial machines were given by Okaya Electric Industries, Japan, but the new machines are being procured from either Taiwan, Korea or China. All of these machines come with state-of-the-art technology and are considered to be some of the finest available in the global market.
Annual turnover
As revealed during Electronics Bazaar’s conversation with the company, Deki Electronics’ turnover was ₹ 870 million last year and the company is looking to touch ₹ 1.1 billion this year. The growth rate in the last two to three years has been between 25 per cent to 30 per cent.
Key to success
The field of electronic component manufacturing is at that stage when prices of raw materials are going up every year, while at the same time, the selling price of the final products is coming down. Anil Bali, vice president, Deki Electronics, comments, “The only way to maintain a company under such circumstances is through economies of scale. It’s a volume game and by following this, Deki Electronics has been growing at a healthy rate for so many years. But at the same time, the company also ensures that its products are sold to its customers at the right price.”
Benefits of making in India
Among the many benefits of making in India, Bali of Deki Electronics highlights a few:
- One of the major reasons more companies should start manufacturing in India is the fact that the industry doesn’t want to invest any more on imports from China. It considers India as a decent alternative at the moment.
- Increasing labour costs in China have resulted in a shortage of manpower for any new manufacturing unit that is coming up. There are some issues in India as well, but the government is addressing them as it wants to make manufacturing in the country easier, when compared to other nations.
- With new solar projects coming up, power shortage is also expected to be eradicated in a few years.
- The Indian workforce is younger than the labour in other countries, thus enhancing productivity.
Strategies for making in India
In order to fill the gap between the demand and supply of electronic components, imports are being done on a large scale. In such a scenario, those who have been making in India for a long time need to have their own strategies to remain strong competitors in the market. Vinod Sharma, managing director, Deki Electronics, gives us a peek into the company’s strategies for making in India:
- Deki Electronics has proved to its customers that, based in India, it can design better capacitors than those that are imported and deliver them faster than anyone.
- The company does a lot of value addition in terms of the services given along with a capacitor. As Sharma puts it, “We almost turn capacitors into service.” These services range from designing and testing to packaging and then studying what a capacitor can do.
- The capacitors manufactured by Deki Electronics are known to have a fairly long life—better than many available in the market.
- The company keeps educating its customers through its newsletters and by participating in exhibitions and trade fairs.
- The company has been careful to price its capacitors in a competitive manner.
- Deki Electronics is always happy to customise its capacitors according to the specific needs of customers.
- Even if the company’s capacitors are priced five per cent to six per cent higher than the capacitors from some Chinese competitors, Deki Electronics ensures that the inventory costs of these products are low.
“Giving an identity to ‘Make in India’ was a positive move made by the prime minister and now everyone is discussing it. I am glad that it has at least fired up our imagination and is encouraging a lot of manufacturers to think about setting-up their units in India.
Vinod Sharma, managing director, Deki Electronics
“The government is doing a lot to encourage manufacturing in India. This country is a really attractive place for any industry to operate in, because nowhere else in the world can you find a democratic country with such a huge workforce of well qualified people, with GDP growing at around 10 per cent. At the same time, the government is also trying its best to make things easier for both Indian and foreign manufacturers to feel more comfortable when operating in India. Everything is in our favour for ‘Make in India’ but there is still a long way to go. We can hope for the best now.
Anil Bali, vice president, Deki Electronics
By Samonway Duttagupta
