Alfa Laval Unit To Serve Parents Global Needs

Alfa Laval (India) has identified India, besides China, Russia and Brazil as major manufacturing bases for its global operations at a time when key markets in Europe and North America are showing signs of decline.

The new focus is part of Alfa Lavals global strategy to position itself as a cost-effective manufacturer and supplier to the rapidly growing Eastern Europe and Asian markets.

India is going to be unbeatable as a manufacturing base not only because of low labour cost, but also due to the availability of talent and skills, said Brian Goggin, managing director of Alfa Laval (India).

According to Sigge Haraldson, chief executive officer of Alfa Laval, Sweden, the company must reduce its market share in order to grow -re-define the market and with it the market share.

 

Even though the Pune operations of Alfa Laval contributes only a meagre 2 per cent of its total global operations, Goggin said the Indian operations were part of the top 10. Five years from now, he said the Pune operations will be significant as it would reach high scales of production.

On the restructuring exercise at Alfa Laval (India), Goggin said, In two years time we have completely transformed the company into a modern organisation on line with the European standards, particularly in changing the mindset of the managers to function in a new competitive atmosphere.

As part of its restructuring exercise, the company had drastically reduced its workforce, particularly cut the top level managerial jobs as it had a very high manager-to-worker ratio.

Satish Tandon, who is due to take-on the position of the managing director from Goggin in January next year, denied that they had ignored the human aspect during the implementation of the voluntary retirement scheme (VRS).

We gave them the best VRS package and even offered them skills and help in getting new jobs, he said.

Even though Alfa Laval (India) posted 28 per cent rise in its turnover during the first half-year ended September 1997, it recorded a net loss of Rs 6 crore as compared to a net loss of Rs 13.2 crore in the corresponding previous period.

However, the company was able to cut its interest cost by half and the wage bill has been substantially reduced due to cut in and the wage bill has been substantially reduced due to cut in ins workforce.

In fiscal 1998-99, Goggin expressed confidence that the company as per its restructuring exercise will come back on the profit track and post 10 per cent return on sales and 20 per cent return on capital.

The company has been able to get substantial export orders from China, Nigeria and United Arab Emirates. China, Nigeria and United Arab Emirates.

Alfa Laval (India) supplies its equipment and machines to the dairy, food processing, marine, power, brewery, distillery, edible oil, paper, pulp, chemical and pharma industry.