Pune-based Drillco, a medium-sized cutting tool manufacturer, has teamed up with Seco AB of Sweden in a joint venture, Drillco Seco, to enter the big league of cutting tool manufacture. A 25:75 joint venture, Drillco Seco will bring new teeth to cutting edges by bringing in the entire range of very high-speed cutting tools into the Indian market.
The new entity will also serve as Seco AB's hub for the Asian market. "We have no other manufacturing facility in Asia," said Leif Larsson, Seco's senior vice president, group marketing, at the formal announcement of the joint venture on February 5. Drillco Seco will be Seco's fourth cutting tool manufacturing facility in the world, the three others being in Sweden and the US.
Seco AB, which is ranked amongst the top cutting tool manufacturers in the world, has a sales presence in 65 countries. It also has 30 fully-owned foreign subsidiaries. This is the first time that Seco has entered into a joint venture.
Seco has had a trading presence in India over the past four years. "We see immense potential in the Indian market. Joining up with Drillco was the easiest and quickest way we could come in, in a big way," said Larsson. The US $400 million Seco has invested Rs 40 crore into the venture, so far the single largest FDI in the cutting tool industry in the country.
The investment will be used to bring in technology, product improvements, and enhance product range. Drillco currently has a range of 150 products, while Seco AB has over 10,000. New products to be introduced in the immediate future will include very high speed milling and turning cutting tools which, as Drillco Seco managing director, Atul Khanna, said, "will bring in dramatic change in the speed of machining and build new platforms across operations."
Khanna added that the new products to be brought in here would be in the forefront of existing technology, globally. "The products to be introduced here will not be relative in terms of technology. In this arrangement, we will be a frontrunner in changing that mindset."
Immediate new products would include the Seco Crownloc drill with exchangeable cutting heads; Minimaster, an end mill system; Octomil, the octagonal insert face mill; Micro Turbo, a multi directional turning (MTD) system for side turning, profiling and both axial and radial grooving, among others.
Drillco Seco is also likely to be the sourcing centre for Seco's global markets, especially for tool carriers/tool holders. "Products that cannot be fully automated can be relocated into India," indicated Larsson.
However, while low cost labour is one of the advantages that India now offers, Thierry Cros, vice president marketing, Drillco Seco, says this cannot last for much longer. "India has a large pool of highly skilled workers. It will be to India's advantage to capitalise on this to re-engineer its process and technology to become a high technology product country, rather than rely on low-end, low cost products."
Cros believes that India can benefit from an "outsourcing movement happening in Europe," something that Drillco Seco too will set its sight on. "The first step for the joint venture is to make a very quick move to increase market share in every sector of the Indian market. The second step will be to become a 'door opener' : to be able to provide the same kind of turning, milling and rearming tools for global supply."