Technocraft Group is one of the largest exporters of drum closures in the world. But its story doesn’t stop there—the company is constantly seeking new avenues and opportunities, no matter what sector they are in. Jane Bordenave reports.
Mumbai-based Technocraft Group was founded in 1972 by Sharad Saraf and his younger brother, Sudarshan. The company began by manufacturing high-tech drum closures, exporting them to the global market from 1977. Since then it has added cotton yarn and garment production, steel tubing and scaffolding to its portfolio and exports 95 per cent of all its finished products. The second largest producer of drum closures in the world, it employs 3,000 people across its five business areas and in 2010 turned over $90 million.
Technocraft Group’s story is one of evolution, and it is the nature of this evolution that has been the key to its success. For 22 years it maintained a pure focus on producing drum closures for manufacturers of steel containment drums. But in 1994, the company acquired a facility that enabled it to produce cotton yarn, followed swiftly in 1996 by the purchase of a pipe mill, allowing it to fabricate steel tubes and pipes. Most recently, Technocraft has begun the manufacture of scaffolding poles.
Having such a diverse range of business areas and exporting on a truly global scale has allowed the company to pass successfully through the recent economic downturn. However, the ride has not been easy, with some markets and areas of operations being worse affected than others. “The recession has had a very profound impact on our business,” explains Sharad Saraf, now Technocraft’s managing director. “It is fair to say that scaffolding has been the worst hit. By December 2008 levels of activity in the construction sector in the US and Europe nosedived to the extent that they almost came to a complete halt. And the truth is, they still have not picked up, so the scaffolding side of our business suffered—and continues to suffer—very badly.”
According to Saraf, the only way of overcoming this severe slowdown in the scaffolding sector was to diversify again, this time into form work, and the manufacture of transmission line towers and structures for solar power plants. However, on the other side of the coin, some areas of business were barely affected at all. While the drum closure sector did go through a small two to three month decline, it was more of a dimple than a dive, swiftly recovering to pre-recession levels of demand and growth.
Aside from the recession, the other significant challenge for Technocraft is in the shape of competition. As well as other Indian businesses, those in China, south-east Asia and particularly its neighbour Bangladesh are the company’s main competitors. However, Technocraft has come up with an innovative way to overcome these challenges: starting an operation in China itself. “In 2009 we set up our own company on a greenfield site in China, which started production in 2010,” says Saraf. “This is our first manufacturing plant outside of India, and it is making supporting components. In summer 2011 it will also begin producing drum closures and we expect to export at least 60 to 70 per cent of items manufactured there.” As well as adding to Technocraft’s overall capacity, Saraf sees this as a true investment in the future, giving it a foothold in the growing Chinese market.
As well as investing in new plants, innovation and technological advancement are also key areas for keeping Technocraft ahead of the competition. “We are constantly looking for new developments and improvements and have a very strong focus on research and development, particularly when it comes to engineering,” explains Saraf. “This has allowed us to develop new machines and increase automation, which in turn is driving down costs through reduction of waste. This kind of investment and focus on improvement is important for business at any time, but has been particularly important in this time of global financial problems.”
For Saraf, training is invaluable if the company wants to continue innovating and diversifying successfully; and in this area, Technocraft takes a continuous approach. “While training is also offered to office staff, we put particular emphasis on increasing and upgrading the skills of our workers,” he says. “We have in place programmes that regularly identify tuition opportunities for them and this is done on an ongoing basis. We have taken the decision that it is better to train our people internally, so we do not send them on courses; however, the instruction we provide to our employees is so well regarded that we do have other corporations send their technicians to us to learn new skills.”
As well as taking care of it own employees, Technocraft believes that being a responsible corporate citizen is equally important. To this end, the company has implemented a state-of-the-art effluent treatment plant that releases zero waste into the local environment. “This has been a very large investment for us. We want to ensure that all our waste is properly treated and properly disposed of and this treatment plant will allow us to do that.” But this sense of responsibility goes beyond just ensuring that its factories are as clean as they can be. “We take a broader view on this and, as well as ensuring that our facilities are as green as possible, we also put money into sustainable forestry projects.”
While accepting that no-one is out of the woods yet when it comes to the recent recession, Saraf sees many opportunities for Technocraft in the future. “China is a growing market and a growing economy which is recovering faster than much of the rest of the world. By already having a foothold there, however small, with our new plant, I feel that we are in a position now to explore that market more fully.
“Additionally, we see significant growth opportunities in our foray into manufacturing for the energy sector,” he continues. “Transmission line towers and particularly solar energy are future generation technologies and projects. We expect to see a great increase in revenue from them and, with the recovery of other sectors that were damaged by the recession, we anticipate doubling our current $90 million revenue within the next five years.”
Technocraft is a company where ambition and dynamism truly come together, so such ambitious plans should come as no surprise—and nor should their fulfilment.
