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Kaleidoscope -Leaders' Views

CERMET shows ways to beat the heat of competition

Mr. Pradeep Khadilkar
Managing Director
Cermet Resistronics Pvt. Ltd.
Start of Business : 1989
Business website : www.resistorcermet.com
Main Product Lines : House of Resistors
‘Star’ Product /State-of-the Art Design/Front-running Product : Thick Film, Thin Film, Hybrid, DBR, Power Resistors, Load Banks
Quality credentials of products (ISO/ CE/UL /CSA/RoHS etc.) : ISO 9001, RoHS
City & Country of factory and Head Office : Pune,India
Names of locations of branch offices : Pune
Main countries of business operations : India
Major market segments for products : Automobile Industries, Lift & Crane Manufacturing, Railways, Capacitor Manufacturing, Lightning industries, etc.
Turnover growth % in last year compared to previous year : 13%

Nearly two decades’ history of CERMET is an example of beating competition with ‘one-up’ position. By nature, the field of their operations – Resistors – is filled with competition, from small and big and from local as well as international players. Winning over competition with technology and strategy, CERMET is a preferred vendor of many leading and reputed manufacturers in India and overseas. Except SMD, there is no type of resistor that is not produced by CERMET. This defines their strength and depth of control over market.

More than just manufacturing standard variety of resistors, CERMET is known as a solution provider, and due to this have in their basket many special and out-of-the way designs of resistors, and of course a wide range of market segments - Telecom Industry, Consumer Electronics, Industrial Electronics, Lighting Industry, Power Electronics, L.T. & H.T. Switch gears, Auto Electronics, Low Voltage & High Voltage power supplies, Instrumentation Lasers & X-rays and special medical electro Applications, - to name a few.

CERMET is an eco-conscious company, with their resistors being eco friendly in nature and complying with the RoHS standards.


What were thoughts and philosophies for starting your business?

While studying in college, I had decided to start my own business, rather than taking employment. My goal has been to make the business a market leader not only in India, but in global market. Technical expertise was available from my father, and I added commercial business aspect to it.


To what extent you feel having fulfilled your objectives today?

We have achieved a leading position in our business segment with many titles to our credit. We are moving in the right direction with major successful achievements, but we are modestly aware that we still have a long way to go to reach our goal. Still, there is a lot to be done, and it would need some more time.


What according to you are your positive points towards growth and sustenance of your business?

- Making correct projections about future trends and take steps to meet those projections.
- Continuous product development
- Most importantly, working on ‘solutions’ rather than just ‘product’.
- Sustained automation, upgradation and build-up of infrastructure.
- Excellent team that is always ready to run that ‘extra mile’.
- We have acquired technology on our own, that makes us self-sufficient.


Would you like to describe briefly your product range?

Except SMD, we produce every type of resistors.

A) A Complete Range:
Metal Glaze Resistors, Metal Film Fusible Resistors, Metal Oxide Resistors, Carbon Film Resistors, Thick Film Metal Oxide Resistors, Metal Film Resistors, Aluminium Housed Wire Wound Resistors, Wire Wound Resistors, Fusible Wire Wound Resistor, Tubular Thick Film Resistors, Thick Film High Voltage Resistors, Flat Resistors, High Voltage Resistors, Discharge Resistors, Zero Ohm Resistors, Industrial Power Resistors, Electrical Load Bank Resistor, Neutral Grounding Resistors,

B) Special Application Resistors:
Heating resistors for mosquito repellents, Spark suppression Resistors for Automobiles, Surge Suppressor Resistors, Delta Connected Resistor Assembly in Ceramic Case, Special Fusible WWR for Ballast, Current sensing shunts (PCB solderable), Energy Meter Shunts, High Voltage Divider, Resistor Arrays, Low PPM Metal Film Resistors, Low VCR & Low TCR High Voltage Resistors and few more.

We are the only company in India, and one of the few in the world, producing such a range under one roof.


Does your product range contain one or two niche or special products that have excellent USP over other manufacturers? If so, you may like to describe it?

High Voltage Resistors for Capacitor discharge application, mastered by us, at par with global leading competitors, approved by major brands in Germany, Italy, Brazil, etc.


Would you like to describe briefly one or two success stories of your business related to market development activities?

- By using our resistors, rejection level for all capacitor manufacturers in India has come down to zero from 3%, and value of resistors used in their capacitors, has come down to less than 1%.

- For Qatar Petroleum and Cummins Pune, we completed load bank orders, successfully competing with international brands


What are your considerations/ideas when you develop and introduce any new product or concept?

- We study the application and problem of the user, study failure reasons of existing supply and use appropriate technology to develop a product as a solution.

- In the field of Electronics, we look for growing business areas like TV business few years ago, and then the automotive electronics, lighting, where there is a growing demand.


Do you have any of the below stakeholders associated with you for a longer period? (Please mention their approx. Number)

Customers: with you (a) for more than 10 years: 30, (b) for more than 25 years: 15
Suppliers: with you (a) for more than 10 years: 5, (b) for more than 25 years: 1
Employees: with you (a) for more than 10 years: 50, (b) for more than 25 years: 1


Do you have any Green Channel Supplier of raw material (how many?):

One, from Taiwan contributing 80% of our raw material supplies.


Are you a Green Channel Supplier of your finished products to any customers: (to how many?)

Yes. To more than 30% of our customers including multi-national companies like ABB, Siemens, EPCOS, and Emerson etc.


What are your growth/expansion plans for next 5 years?

- Expect to triple our turnover
- Export contribution to grow from preset 8-10% to 25%
- Switch to high value items manufacturing


How do you foresee growth of your industry in next 5 years (a) in the country, and (b) internationally?

Resistors will have negative growth, except for SMD resistors. Power Electronics will grow by about 40-50%, and we have planned to have our focus there.


What kind of bottlenecks you anticipate in your growth plans for next 5 years, and how you plan to counter them?

Electronics industry may not grow as required, in coming 5 years, and this is a major challenge. To counter this problem, we plan to bring in new products, switch to new market segments, and concentrate more on exports as well as white labeling to big MNCs.


In present business practices, what major problems do you experience?

a) Unusual credits expectations by customers,
b) Payment delays, non-payments, bad debts,
c) Effects of Government policies(lack of policies/inadequate policies/negative policies)
d) Effects of International happenings
e) Effects of changed climatic conditions
f) Import is easy which creates problems to local manufacturing
g) Backward integration industries are not encouraged
h) Export encouragements absent, since this is very expensive activity.
i) Interest rates of banks are very high that creates problems for capital investments.
j) Since the market is very small, economy of scale is not possible.


As a progressive and prominent businessman, would you have any suggestions for removing these hurdles?

- Subsidy and government support for capital investment is required.
- Basic infrastructure like healthy supply of Electricity, required to be provided
- Imports with under- invoicing to be controlled
- Labour laws need to be improved.


National/local competition is mostly from business units that come up by copying a leading brand with less features, less quality and less price. Do you have experience of it?

Yes. Mostly such competition is of sub-standard quality, but snatch orders due to low price.


How you see the onslaught of international competition in your business segments?

- Effect of international competition is very much there, and no improvement is foreseen.
- Cannot compete with high volume mass production
- But can surely handle technology-driven requirements, even though in small volumes.


What are your suggestions and plans for countering such competition – both national and international?

- We need to shift from such fields of high volume, low price (and low quality), to technology oriented solution providing products.
- Also need to change product portfolio and market segment.


Do you have any activities in practice for improving performance, loyalty and retention of your employees? You may like to mention those here along with your experience.

We have many activities for employee satisfaction, like monthly birthday celebrations, sharing company happenings with employees, recognise and reward good performers , performance linked income, financial support in case of any personal problems.


Do you take up any specific actions and undertake activities for environment protection?

- We have done rain-water harvesting in the factory, and are promoting it in neighborhood.
- Our manufacturing process and products are eco-friendly, RoHS compliant.
- We work for helping reduce environmental loss, and awareness activities related to it.

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