Maini Precision Products & REVA

On Wednesday, September 5, 2007, we visited Maini Precision Products in Bangalore. We had a very interesting and highly interactive discussion with Mr. Chaitanya Koranne, VP Marketing at Maini Precision Products. We had a tour of their manufacturing facility (machine shop) and we also had the opportunity to see REVA car which is an environment-friendly, cost-effective electric car specially designed for Indian urban conditions. Overall, the visit was very interesting, informative and a different kind of experience for most of us who rarely visit machine shops with metal turning lathes and machine tools all around.

The Maini Group started in 1973 in Bangalore as a small scale manufacturer of high precision automotive components exclusively for MICO-BOSCH. The Maini Group has evolved into a highly diversified manufacturing entity, and a major outsourcing partner for several multinational corporations including companies like GM. There are four primary companies that make up the Maini Group and the company that we visited (Maini Precision Products - MPP) is one of them. MPP manufactures over 1500 types of components specialized in engine application parts, sub-assemblies, casting & forging, material handling, shafts and axles.

The following are some of the main topics Mr. Koranne focused on in his presentation:
 Maini Group, sub groups & Maini Precision Products
 6 manufacturing units in India each focused on a specific product line
 Sales performance of Maini Precision Products
 Sales distribution for MPP (Industry wise from India)
 Advantages for MPP based on experience & core knowledge in high-quality manufacturing, packaging, shipping etc.
 Sales distribution for MPP (Customer wise from India)
 Sales distribution for MPP (Region wise from India)
 MPP technologies in the market (# of pieces Vs. Complexity in end-application)
 MPP’s emphasis on high-quality

Mr. Koranne explained the importance of managing foreign exchange risk for MPP. Also MPP uses standard hedging techniques to offset price fluctuations of various metals needed for manufacturing by MPP. The futures market for metals is not very well developed/organized in India and this certainly presents problems to MPP.

The overall sales performance of Maini Precision Products has been very impressive with CAGR of 26% since inception and 51% for the past 4 years. In terms of the industry-wise sales distribution from India, the main industries for MPP components are as follows: material handling (15%), transmission (13%), assemblies (26%), hydraulic (17%) and automotive (15%). MPP components are also used in the Aerospace industry (6% sales). Mr. Koranne explained that the MPP products used in the Aerospace industry are essentially low-tech components. The high-complexity, high-tech products from MPP are mainly used in cars and other automobiles.

MPP has a very strong focus on quality and it has received several prestigious awards for quality and excellence. MPP has consistently maintained zero defect in products delivered to various customers (zero PPM). Mr. Koranne mentioned that their manufacturing yields are also high with an internal PPM of 1700 – 2600.

One of the highlights of our visit to MPP was the REVA electric car that we saw there. In 1994, REVA Electric Car Company, based in Bangalore, was established as a joint venture between the Maini Group and AEV LLC of Irvindale, California, USA. The REVA car is India’s first zero-polluting electric car for city mobility. It was commercialized in June 2001 and is specially designed to cater to the Indian urban conditions with potential for city commuters across the globe. Currently, REVA car can go up to 80 kilometers in a single charge. A full charge can be attained in 8 hours while 80% charge can be attained in 2.5 hours. The battery-pack has a life of 2-3 years. In the future, REVA is expected to offer ranges of up to 200 kilometers in a single charge with reduced charge-time.

The tour of the manufacturing facility was also interesting. It was a typical factory environment with several machine tools and metal-turning lathes for manufacturing Maini’s precision products. Mr. Koranne mentioned that the average wage for the factory worker at MPP ranged from $3 - $6 per hour. We also saw MPP’s classroom training facility and the packaging facility.

We concluded our visit with good south-Indian lunch hosted by MPP on the top floor of the office building with a nice view of Bangalore city from the balcony.

- Satish Salagame