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Wheels Of Success
From making bicycles chains to car wheels and now carbon composites for aerospace, Rockman Industries’ growth has been phenomenal
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Three things stand out when one analyses the business portfolio of Rockman Industries (formerly Rockman Cycles), one of India’s largest auto component manufacturers and part of the $6-billion Hero Group. One, it is the industry leader in two-wheeler alloy wheels with an installed capacity of nearly 6 million wheels annually. Two, its revenues have multiplied 10x in the last decade, from Rs 221 crore in FY08 to Rs 2,330 crore in FY18 — a rare feat for the sector. The company is now aiming for a billion dollars in revenue in the next three to five years. Third, the robust growth plans of the company for the short-term and the long. And the man spearheading these plans is next-gen Ujjwal Munjal, Executive Director of Rockman Industries and Founder-Director of Hero Electronix. He is the son of Suman Kant Munjal, Chairman and Managing Director of Rockman Industries and Chairman of Hero Electronix. Today Rockman Industries has six manufacturing plants across Ludhiana, Haridwar, Chennai, Bawal and Surat. Of the two plants in Ludhiana, one manufactures motorcycle chains and the other makes aluminium die casting products, just as the other plants except the Surat unit, which manufactures advanced composite parts.
Last year, under the stewardship of junior Munjal, Rockman Industries went in for two major acquisitions — a strategic stake in Moldex Composites (a British-Indian enterprise engaged in designing and manufacturing advanced composites) and in UK-based MCT Engineering (announced in 2018), a specialist carbon-composite manufacturer producing high-quality, innovative components for automotive, motorsport and defence industries,. This turned out to be a turning point for the company. “It must be noted here that when we completely shut down our bicycle components business in 2005, our revenue was around Rs 57 crore. And then we entered the business of manufacturing aluminium die casting components, machined and painted assemblies, auto chains and parts. For 2017-18, we clocked a revenue of over Rs 2,330 crore,” says Munjal.
In the next couple of years, Rockman Industries will be pumping in more than Rs 650 crore as planned capital expenditure (mostly raised from internal accruals) to complete and expand the two new manufacturing facilities coming up in Gujarat and Andhra Pradesh. The Gujarat plant will focus on the needs and demands of the Hero Group, both in the passenger vehicle and commercial segments. The Andhra Pradesh unit will be a wheel-centric plant where the company will manufacture alloy wheels for four-wheelers (2 million wheels capacity per annum) and two-wheelers (3.6 million wheels capacity annually). The company is also looking at doubling its exports, primarily to North America and Europe. Alloy wheels will account for 75 per cent of the business generated in the next three years, says Munjal.
Today, the Rockman Industries is growing in double digits and expanding in newer areas. But how did it all start? It was in 1956, when the government of India announced that it will issue licences to make bicycles at small scale. Before that, independent India had only a few large-scale bicycle manufacturers such as Hercules Cycle, Rally Cycle, etc. Recalls, Suman Kant Munjal (SKM): “Twenty-one licences were issued to small scale industries, but with each licence one could only manufacture 20,000 bicycles. My father also got a licence but returned it to the government saying he wanted to make 2,00,000 bicycles a year. The government issued him a licence for 50,000 bicycles a year with the promise of allowing 2,00,000 bicycles once he achieved the manufacturing of 50,000 bicycles. It took him two years to go back to the government.”
In those days, bicycle components weren’t readily available. “So the company decided to manufacture its own components. But we had no industrial or export licence available. That’s when the state government announced small-scale funding and Hero Group was financed with a fund of Rs 5,000 in 1955. After that the Hero Group approached the government for the import of machines and putting up a plant. So, the first three machines were imported by the government and given to Rockman on lease,” recalls SKM.
How did the name Rockman come about? “Before he visited Germany to acquire machines etc., my grandfather was exchanging letters with a trader named Ernst Mann (who later became a close friend of my grandfather). When equipment was installed, Mann visited India and while traveling from Delhi to Ludhiana to see the plant, they were discussing his last name and rock solid chain. Thus the name Rockman was coined,” says junior Munjal. Rockman’s first plant was set up in Ludhiana only 2 km from Hero’s plant.
In the late 1980s and early 90s, Rockman Industries became a large manufacturer, exporting bicycle chains and hubs around the world. But the Munjals foresaw an easing of entry barriers in the business, and so the company started manufacturing drive chains in 1995, and engine timing chains in 1997. Soon after, it acquired a company in Chennai with the intention of expanding business in the passenger car as well as the commercial segment.
“By the time we gradually moved to motorcycle components, more businesses had come up at the same level in terms of revenue. In 2005 when we started working with Hero Honda (now HeroMotocorp) we had minimum experience. Since then business has taken a very different shape, and 2005 onwards there was rapid growth for four to five years and even Hero grew rapidly. Our focus was to grow, and we were growing at 20-25 percent for many years,” says SKM.
From chains for bicycles and later motorcycles to alloy wheels, the company had the foresight to gauge the changing trends and the requirements of the automotive sector in India. Coming to the present, SKM says that it was in 2007 or 2008 that for the very first time Rockman Industries moved out of its bastion at Ludhiana and went to Bawal, some 60 km from Gurgaon, near New Delhi. “For the new plants, the infusion came from the family. Going forward, say for the next two or three years, we are looking at investing Rs 650 crore — Rs 600 crore on new plants, Rs 50 crore on our existing plants,” says SKM. The company presently has six manufacturing plants. By 2019, it will have eight plants with the addition of two new units in Gujarat and Andhra Pradesh.
“Today Rockman’s 55 percent business comes from alloy wheels. We are producing 5.6-5.8 million alloy wheels in our Haridwar and Bawal facility for two-wheelers. We have recently signed a technology transfer agreement with a Korean company to set up a facility in Andhra Pradesh that will be a wheel-dedicated plant — car wheels and motorcycle wheels. Gujarat is going to be mainly focused on Hero business with wheels and castings,” says junior Munjal.
Keeping a keen eye on the global automotive sector and its transformation, Rockman Industries believes that globally, aerospace has seen the development of newer technologies, which have then been adapted in motorsports and in the passenger car segment for mass usage. “We have tried to focus on ‘light weighting’ of our products. Parallelly, we are also focused on carbon composites. The business of Moldex that we acquired focuses more on motorsports, which is a seasonal business,” says Munjal.
In the last 12-18 months, while concentrating on the business of motorsports, the company has setup a marketing office in the UK. But why get into carbon composites? What are its benefits? “Carbon composites offer tremendous advantages aesthetically, in ‘light weighting’ and also offer strength. We have three partners in Moldex — a British ex-motorsport veteran; an aero dynamist and a carbon composites designer. So today we offer customers our cost-effective products and design capability and local servicing by having our UK office in Silverstone,” explains Munjal.
Rockman Industries, through Moldex, has also invested in UK’s MCT Engineering, a company that has been supplying advanced composites to UK and Europe’s leading luxury and sports car makers for over 20 years. The company’s facility, situated close to the Silverstone Racing Circuit in the UK, focuses primarily on cosmetic components and short production runs with quick turnaround times. MCT has technical partnerships with customers and end users, design and innovation houses and material suppliers across Europe, the UK and globally. “Ever since we acquired Moldex, we have increased our capacity by three to four times. Our partnership with MCT has also helped MCT in offering its customers cost benefits and speed,” says Munjal. Now Rockman Industries’ main focus is aerospace aviation. “We are amongst a handful of Indian companies in carbon composites to have first level of certification, AS9100,” adds Munjal.