'Surya is the second largest player in the industry'
The Weekend Observer (4 March 2000)Saturday, New Delhi

Under the dynamic leadership of 70-year-young B D Agarwal, Surya Roshni Limited, the second-largest lighting company in India after Philips, has grown manifold. From a humble beginning in 1973, Surya Roshni Ltd has grown into the leading manufacturer of lighting products. The company has registered a steep growth profile with its turnover crossing Rs 700-crore mark. It holds major market share of 24 per cent against 34 per cent of Philips. Says Mr Agarwal, "at the core of this trail blazing performance lies a simple premise - a passion for excellence." With 100 per cent backward integration, the company manufactures all the required components in-house which allows Surya Roshni Ltd to have "an edge in terms of quality."

In an interview to Prakash Jha, the Chairman and Managing Director of the Surya Roshni Ltd, B D Agarwal, remarked: "When the sun sets, Surya rises. Thus, it's Surya all the way."

Excerpts:

What do you think about the performance of the lighting industry and how is it bracing up to the challenges thrown up by the WTO regime?
With the lowering of trade barriers the duty will come down to about 5-7 per cent. It will certainly result in arrival of lots of cheap products from all over the world. In fact, our neighbour China is quite capable of flooding our market with relatively cheap products. They may get an initial market, as price matters to a large number of population. But they would not be able to maintain their market share unless they provide quality products at a cheap rate.
I do not think any one should be scared of it. We are not frightened. We have and are gearing up to face any challenge. No doubt, the competition will be quite tough. But, it's the quality that succeeds in the long run. Even now both cheap and quality products are available in the market.
Also, if the WTO regime results in lowering of trade barriers for foreign companies, it also opens many new markets for us. We too can capture markets abroad. So, I do not think, the WTO regime is a threat.
It will lead to strong competition, and at Surya we are not afraid of competition. Even today, three international brands are available in the country and Surya has been successfully competing against the best in the world, on the basis of its inherent strength and product quality.
We are next only to Philips, a multi-national company. Thus, we will not only survive but also grow at a faster rate.
The competition will benefit industry. But, ultimately, it's the consumers who will benefit most out of the competition.

Would it not lead to dumping? It may not affect Surya, but can prove disastrous for small players. Should not there be anti-dumping measures?
For small players, yes, there should be some anti-dumping measures. All the countries including the USA have such regulations to protect their domestic industry from foreign onslaught. But again, I will say one should not be scared of it. One should prepare and think in global terms.
Globalisation is no longer a mantra. It is a fact. Faster we integrate ourselves with the change of time, better it is.

Of late, a number of companies in this segment have closed down. Does it not signify that the industry is undergoing a bad phase?
It's true that a number of companies - 10 out of 15 small players - downed their shutters recently. That includes HMT, a government-owned company, over 75-year-old Bengal Lamps, probably the oldest lighting company in India and others. It is sad for the industry as a whole.
They were making reasonable quality products but their volumes of production was low. They could not sustain themselves as they did not make proper investment in technology and manpower. They failed to expand their market and product base. They continued with traditional lamps and did not go for new products. Their management pattern, I feel, was too traditional and not in tune with the changing times.

What is the overall situation? Is the lighting industry growing or stagnant?
Industry as such is growing. It is growing at the rate of five to seven per cent. But the rate of growth is very low. In a developing economy like us it should have been in the vicinity of 30 to 35 per cent.

What is the reason behind this slow growth rate?
The main reason behind this is non-availability of electricity in most parts of the nation. Half the population is still dependent upon lanterns. Also, in the areas where power is available, either it is very irregular or of low wattage. The power consumption is not increasing. All this is hampering the growth of lighting industry. What is required is regular and quality power supply.

But the bottom line of major players in this segment does not convey that…
The industry is growing but the quantum of growth is restricted to a few major players. In all there are six major players in the market. Of the multinationals , Philips is here for the last 50 years and GEC for the last seven-eight years.
Surya, Crompton and Wipro are the local players. After Philips, Surya is the second-largest player. Wipro is a group, but has a very small presence in this segment.

What about Bajaj?
Bajaj is basically a marketing company. They market many products, and bulbs and tubes are among them.

What has been the rate of growth as far as Surya is concerned?
We are growing at the rate of 10 to 15 per cent. In the last five years, we have been able to increase our turnover by over Rs 100 crore each year. This turnover includes our steel products also.
We have set up the most modern facility and have achieved 100 per cent backward integration. We are making all the components required for this industry ourselves. We produce 360 million glass shells per year of which 35 per cent is used in in-house and the rest is sold to both domestic and international markets. Our endeavor is to maintain leadership through quality products and cost control. We try to explore new avenues in product development, marketing, and exports, create a stronger bond with our customers, employees, suppliers and shareholders, contribute to social development and strive for excellence in all spheres of our global activities.

Are you competing with multinationals like Philips in terms of volume only, or also in terms of product quality…
We two compete in terms of both volume and quality. Philips and Surya products vie for market space and they are available all over the country. There are other players too, but with localized presence,. In today's world as far as quality is concerned it's not the preserve of any particular company.
Moreover , quality standards are more or less the same. We are bound by BIS standards and have won many international quality awards. Our products need both national and international quality standards. Yes, in some segments they do score over us in quality terms, but we do have an edge over Philips in other products segments.

What about export markets?
Our products are not limited within national boundaries. We are present in over 45 countries and exporting our products for the last seven years. In rupee terms, we earn over Rs 10 crore from exports.
We are getting repeat orders and so far, have not received any complaint regarding either quality or supply. In the middle-east market we have a strong presence. We are also present in the European and the US market but in a small way.

You have spoken about WTO regime benefiting Indian companies.How is it going to effect Surya?
We are aiming at 15 to 20 per cent increase in exports. We want to expand and enter the US market, which is quite large. It will help us propel our sales. The US and the European markets are big and quality conscious - we plan to enter those markets with more value added products. Once the WTO regime comes into force it will become easier for us. We are planning to have production bases in USA and other European nations. As multinationals are entering India, Indian companies will also have to be transnational. Without becoming transnational the business cannot grow at the rate we are aiming at.
The ISO-9002 accreditation and prestigious European mark CE have helped the company to explore and win the much sought after and quality conscious world markets. Surya has won several export awards and accolades. Our focus has been on strict adherence to quality parameters and to remain market leader. We have developed a quality culture and accept no excuses on this front.

How do you visualize the future of the industry?
The future is bright both on the national and international fronts. Various governments are striving for increasing electrification and making power available to a majority of people. So that will give a boost to lighting industry. On the international front, Globalisation has opened up vast opportunities .
There is nothing that Indians and Indian companies cannot do. We have proved it time and again. At Surya we speak the language of quality and technology. We are going to emerge as a major market player of the world.

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