Lapp Group India is a wholly-owned subsidiary of the Germany-headquartered Lapp Group. Lapp India currently provides about 150,000 km per year of various cables, along with connectors, accessories and solutions to over 5,000 customers pan India. We have Marc Jarrault, in this exclusive interaction with T&D India, tracing Lapp Group’s growth in India since it began operations in 1996. Lapp Group’s biggest growth driver in India would be localization, feels Jarrault.
Let us start with Lapp in India. Tell us about your presence and your market in this country.
Lapp Group India began its operations in India in 1996 with a manufacturing unit in Jigani, Bengaluru. Having made an investment of 2.1 million euro, the Bangalore unit is the second largest manufacturing unit of the Lapp Group. Till date Lapp Group India has provided about 150,000 km per year of control, instrumentation, power and data cables along with connectors, accessories and customized plug and play cable assembly solutions to over 5500 active customers’ pan-India.
Looking at the potential of the Indian market, Lapp Group India started its second plant in Pilukedi, Bhopal in addition to five service points and five warehouses. This unit strengthens the company’s base in the single core wires segment as well as caters efficiently to the growing demands in India.
What constitutes your clientele?
Currently, our customers are spread across different industry segments such as automation, textile, automotive, machine tools, oil & gas, renewable energy, process industries, as well as in the infrastructure and building sectors. To service them better, we currently have 23 sales offices and a strong network of 180 dealers and distributors, a state of the art laboratory and a fully-fledged Innovation & Engineering Centre. We also, provide tailored solutions for customer-specific applications and help them meet the industry challenges.
Do you have any capacity expansion plans at either of your two manufacturing plants? Also tell us about your warehouse at Bhiwandi in Maharashtra and imports from JNPT port.
We do have expansion plans in the future in terms of our manufacturing capacity. Regarding the warehouse, from Bhiwandi we have now shifted to Hinjewadi, Pune. This shift was primarily to serve our customers better and faster, in the western region. Even now we continue to import via the JNPT port, which we later ship and stock at our warehouse in Pune.
India’s solar industry is on a growth trajectory. Given that Lapp India has solar cables and other accessories like connectors, how do you see the prospects?
Lapp has been a driving force for innovation in the solar photovoltaic (PV) industry. For over ten years, the company has been successfully developing cabling and connectivity solutions for photovoltaic systems. We have regularly brought in efficiency in transmission with our intelligent innovations. Since 2012, Lapp India has catered to over 4 GW of grid-connected PV projects with an array of highly efficient and reliable products like PV cables, connectors, splitters and other accessories. At present, we cater to about 25 per cent of the total 13 GW of installed grid-connected PV base in India.
Our customers can be assured of our products being manufactured with the highest quality of raw materials using the best of the technology. We provide complete connectivity solutions with power, control and data cables across industries.
We at Lapp Group India aim to double our current annual turnover to Rs.1,000 crore by the year 2020, says Marc Jarrault
We understand that Lapp India specializes in industrial wires. Tell us about the major industries that you cater to and which are the high-potential industries of these. In particular, how do you view the potential from the automation industry?
Our portfolio includes standard and highly flexible cables, industrial connectors and screw technology, customized system solutions, automation technology and robotics solutions for the intelligent factory of the future, as well as technical accessories. Some of the key focus industries include automation, textile, food & beverages, and infrastructure industries which have been witnessing considerable growth over the last few years.
Industrial Automation has been a direct beneficiary of the rapid increase in digitalization, thanks to the Digital Revolution. Industry 4.0 brings with it the concept of Smart Factory, making the process more flexible by integrating the systems, machines, production and logistics. In the course of Industry 4.0, the demands on cable and connection technology is changing and getting redefined. Data rates are climbing with the consistent networking of company and business processes. This is a development that demands high-performance networks. In future, network cables will no longer only be used to connect machinery and within control cabinets, they will also be laid directly to intelligent actuators or sensors in the field.
Reliable networking of production across all levels will only be possible with a comprehensive cabling and connection concept. Ethernet cables in a production environment must be substantially more robust than LAN cables in an office environment. They have to be oil resistant, must withstand high temperatures and must also function reliably and durably in the drag chain.
The challenge for the cable industry will be to combine the requirements of flexibility, robustness and the highest data rates in cables. Also, Industry 4.0 would require data, power supply and pneumatics in one connector which would significantly reduce the retrofit times of a modular production plant. In general, the trend would be towards smaller and smaller yet also more and more efficient connectors and cables.
How is ÖLFLEX®, globally the most renowned brand of Lapp Group, doing in India?
ÖLFLEX® contributes to about 60 per cent of our total control cable sales. ÖLFLEX® is a universal cable used in control applications. Besides being the first multi core cables to be manufactured in the world, OLFLEX® cables are suitable for 3 axis rotation applications and with very high linear bending stress. ÖLFLEX® range of FD cables can resist 8-10 million bending cycles of operation.
ÖLFLEX® cables are the only choice when it comes to machine tool applications as these are oil and chemical resistant. Out of our total number of sales in India, we have a higher demand for the ÖLFLEX® brand of control cables.
How has GST impacted the wires and cables business?
Introduction to GST has saved transportation cost, transaction cost and administrative cost. It has also reduced errors, transit damages and delays. In the operation front, we are able to save a lot of time, cost and manpower. Earlier, we were suffering from non-value-added activities like stock transfers. By way of GST, we are able to bill any customer in India as there is no request for local VAT billing by the customer. Initially it required us to stock transfer the materials to the respective state and later bill it locally to the customer. With GST in place it saves us about 50 per cent of our time and effort. The process is now faster, and we can reach our customers better.
The revised rate of GST on cable and wire from 28 per cent to 18 per cent has further come as a welcome relief. We will be now able to pass on the price benefit of reduced GST to the customers.
In general, how do you see business prospects for Lapp in India, over the next, say, five years. What would you regard as your principal growth drivers?
For the Lapp Group, India has always been a key focus, owing to the promising growth and opportunities that the country has to offer. Our vision is to become the preferred partner for cable and connection technology for our customers across all segments of the industry. We at Lapp Group India aim to double our current annual turnover to Rs.1,000 crore by the year 2020. Our focus will be on segments like renewable energy, process industries like steel, power, food & beverages and automation. We believe localization is our principal growth driver. Around 70 per cent of our supplies are the products manufactured domestically. We also have OLFLEX® CONNECT, our customized cable assembly solution – from simple cable harness to a complex drag-chain assembly.
Additionally, our sales teams across 23 sales offices in the country are equipped with tools to better their performance and give customized solutions to customers and by catering to diverse applications & cross-sell. With a positive frame and with developments like these, we aim to meet our targets and have a progressive growth.
