India is pouring huge amounts of money into aerospace, nuclear energy, electronics, and medicine – precisely the sectors of expertise for Schomberg, Ont.-based B.C. Instruments Inc. (BCI).
Oddly enough, its India-based subsidiary, B.C. Instruments India Pvt Ltd., is focused on export markets. The company specializes in producing high-quality engineering components for sale to the United States, China, the Philippines, Singapore, Luxembourg, and Canada.
As a government-approved export-oriented unit (EOU) in India, it enjoys special privileges, such as duty-free imports, because it adds value to imported raw materials and ships them abroad for profit. The company supplies remarkably thin parts and it processes – among other materials – stainless steel, aluminum, titanium and carbon steel.
With a 10,000-square-foot air-conditioned factory in the Anand district of the industrialized western state of Gujarat, the company has grown to 45 workers from five in 2004, while the Canadian parent has 115 employees.
“Plant cleanliness and housekeeping are very important,” said managing director Sunil Dave, a 41-year-old who returned from Britain to his native province to set up the venture for BCI.
The Canadian parent has been up and running since 1971, with prestigious clients that include NASA. Its high-precision engineering requires extra care from technical workers.
Mr. Dave says in addition to training employees in both English and local languages such as Hindi and Gujarati, he encourages customers to talk directly to employees, so that the workers get a clear indication of the importance of their work.
“It is what the customers want that matters, not what the management wants,” Mr. Dave says.
The Indian unit, which records annual revenue of $1.3 million (U.S.), has been growing at a rate of 15 per cent to 20 per cent a year.
Mr. Dave says the area in which the factory is located is a university town with more than 600 small and large engineering units, which helps attract talented workers. China is said to have a competitive price edge in the field, but Mr. Dave says you have to look at details beyond cheap wages.
“China may be better than India man-to-man, but India has its strengths in engineering,” he adds, explaining why his firm remains competitive enough to export to China.
Though the parent company has a strong research and development base, the Indian operation is a straightforward venture focused on efficient manufacturing. “There is no point in reinventing the wheel here,” Mr. Dave says. “But we do have plans to set up a knowledge centre.”
BCI’s customers are typically large corporations, and despite competition from firms in Brazil, Portugal, China and Vietnam, and companies in southern Indian engineering centres such as Bangalore, the business is growing thanks to a well-carved-out niche, Mr. Dave says. What’s more, the company is confident enough to invest in new technologies before looking to add customers.
“We invest based on the potential rather than firm orders,” Mr. Dave says. “In this business, you have to take calculated risks.”
Though the rupee has been stronger, BCI has managed to weather currency challenges because its diversified markets provide a cushion against foreign exchange fluctuations. And thanks to a landmark nuclear deal between the United States and India, and other liberalization measures, B.C. Instruments India suddenly has a larger market in its own backyard.
“We have plans for India as well,” Mr. Dave says. “We can’t ignore India.”
Special to the Globe and Mail
Narayanan Madhavan is associate editor of the business news pages of Hindustan Times, a leading Indian daily newspaper. He has previously worked for Reuters, the international news agency, as well as The Economic Times and Business Standard, India's leading business dailies. Though focused mainly on business and economic journalism with a strong focus on information technology and the Internet, he has also covered or written about issues including politics, diplomacy, cinema, culture, cricket and social issues. He has an honours degree in economics and a master's degree in political science from the University of Delhi.