India’s Forms & Gears eyeing Thailand growth to tap electronics, auto sectors
By Atul Ranjan
NEW DELHI, NNA - India’s engineering services company RV Forms & Gears LLP is exploring an expansion plan in Thailand to set up a manufacturing-cum-assembly plant to tap the Southeast Asian country’s electronics and automotive markets.
A leading fixture builder in Asia, Forms & Gears and its major partner ASM Technologies offer comprehensive turnkey solutions with cutting tool, fixtures and automation to various industries such as automotive and auto original equipment manufacturers (OEMs), generator makers and engine testers.
Now, Forms & Gear is setting its eyes on Thailand’s electronics industry as it looks to offer fixtures and special equipment used in making popular products such as mobile phones, tablets and laptops.
Spreading its wings to diversify will help to de-risk its business which has been affected by the fallout from the coronavirus crisis and the cyclical nature of the automotive industry.
“We already have a joint venture with a local firm in Thailand for offering complete turnkey solutions to the auto OEMs and auto component makers there. In addition to that, we are now thinking of setting up a manufacturing-cum-assembly plant which will cater to the electronics industry as well,” Reji Varghese, managing director of Forms & Gears, told NNA when explaining his game plan to build on their experience with electronics.
Varghese said the company has already been producing fixtures and special equipment for the India and China plants of one of the world's major mobile phone and electronics companies. He declined to name the company citing confidentiality.
The company’s plan to expand its Thailand operations - its first manufacturing base overseas - is also aimed at offering cost-effective solutions to clients in order to gain more traction in the market.
Thailand could also serve as an alternative manufacturing base and "help us save import taxes, among other things,” Varghese said, adding that the proposed plant may employ 50 to 60 people initially.
He declined to name the local partner in Thailand or provide details about the proposed plant as the plan is still exploratory.
However, he said the company is determined to focus on marketing efforts especially in Southeast Asia and the Middle East. He expects 30-40 percent of its total fixture business to come from exports in the current fiscal year on the back of strong orders, mainly from Southeast Asia.
Forms & Gears is among many companies around the world seriously looking to diversify and expand its presence in new locations in a bid to reduce risks due to supply-chain and market disruptions caused by the ongoing COVID-19 pandemic.
K.E. Raghunathan, immediate past president of the All India Manufacturers Organization, told NNA that some local manufacturers, including those from MSME sector (Micro, Small & Medium Enterprises), are exploring opportunities to diversify their supply-chain bases to navigate through current business challenges for the sake of business continuity.
Varghese noted that the pandemic, India’s already slowing economy in recent years and government policy changes such as controls on vehicle emissions have collectively impacted on the local automotive industry adversely.
“Faced with low demand from the auto industry, the machine tool and fixture market has also been affected,” he said.
Meanwhile, the company has widened its product portfolio to capture new markets with the recent launch of Smartfix 4.0, a digital precision workholding device which collects, transmits and analyses data in a useful format for the end-user.
Believed to be the first of its kind in the world, it can be installed even on old legacy machines, fixtures and equipment.
It has also entered the sheet metal segment where there is a high demand for special laser machines for welding, cutting and hardening.
Varghese said the installation of Smartfix is already taking place in countries such as India, Belgium and Thailand.
In India, the company counts notable auto OEMs such as Maruti Suzuki, Mahindra & Mahindra, Escorts, Tata Motors, and Ashok Leyland among its key partners. It also exports its products to over 10 countries like China, Japan, Indonesia and Thailand.
Forms and Gears, is majority-owned by India’s ASM Technologies Ltd., an Indian engineering services company with a global presence covering the United States, Canada, Mexico, the United Kingdom, Singapore and Japan.
It has a manufacturing facility in the southern Indian city of Chennai which has a capacity to produce 500 fixtures annually to meet demands of both domestic and overseas markets. To capture new opportunities, the company will be setting up a new plant for automation in Chennai.
ASM Technologies posted a net profit of 10.90 million rupees (around $137,000) in the fiscal year ended March 31, 2020 down from 70.33 million rupees achieved during the same period last year.