Srinivash Singh is managing director of McNally Bharat Engineering Company Ltd, one of India’s leading diversified engineering companies. Here, he talks to Jayne Flannery about the company’s meteoric growth.
India’s industrial growth has achieved almost mythical proportions and the country’s transformation is increasingly fuelled by homegrown entrepreneurial talent. McNally Bharat Engineering Company Ltd (MBE) has emerged as one of India’s leading engineering companies. Last year, it managed to shrug off the world’s economic woes and report net income growth of 50 per cent and a 19per cent increase in net profit. Turnover has more than quadrupled over the last five years to stand at approximately £310 million.
MBE builds turnkey plants and installations in the areas of power, steel, aluminium, material handling and disposal, mineral beneficiation, pyroprocessing and the pneumatic handling of powdered materials, particularly fly ash handling. Since it began to aggressively address the opportunities that India had to offer in 1998, the company has built up a portfolio of over 300 different projects.
Managing director Srinivash Singh explains that success did not come easily at the outset. “There are many areas in engineering that were previously dominated by foreign companies. These were traditionally seen as having greater capacity and expertise, particularly in open cast mining. Indian companies found many segments of the engineering market difficult to enter,” he comments.
MBE’s response was to bring in the best foreign technology it could find. Then, as the company grew, it began to design and develop its own solutions. A major milestone was entry into the fly ash handling business. “When we became involved around the year 2000, there was no recognition of the value of pneumatic handling of this material. Traditional methods were extremely wasteful of water and also had a huge environmental impact. We were able to guide people towards alternative solutions and provide better technology. Now we are one of the largest players in this sector,” he says.
From this base, many new opportunities in mineral handling became apparent. MBE quickly became known as a pioneer in initial business areas—coal preparation, mineral beneficiation and bulk material handling. “At this point, we started buying up competitors who had good technology and also to reduce the impact of competition on the business.”
A key acquisition was Sayaji Iron & Engineering Company Ltd, a leading manufacturer of crushing and screening equipment. With the input of McNally’s technological and design expertise, the acquisition meant that MBE could begin to directly manufacture many of the products required for its projects. McNally Sayaji Engineering Ltd (MSE) now has a wide portfolio of crushing, screening and milling equipment, pressure vessels, material handling equipment, steel plant equipment and process equipment like flotation cells, thickeners and slurry pumps.
MBE soon went on to develop global ambitions. Realising that overseas acquisition was a short cut to developing a global presence, MBE bought out the coal and mineral technology division of KHD Humboldt Wedag, Germany, in 2009. Singh envisages that the German acquisition will be used as a springboard to develop a network of subsidiaries across the world. China, Australia, Mongolia and South America are all within the company’s sights.
Again, differentiation through superior technology will be the key to market entry in new geographical areas. “Research and development is of critical importance to us and we invest heavily,” Singh states. “In terms of our technology in materials handling solutions we have two main drivers. On the one hand we want all our mineral dressing equipment to consume less power and function in a more environmentally friendly way, but at the same time we believe we can achieve big gains in efficiency and productivity.”
A subsidiary company, EWB Hungary, is in partnership with the Technical University of Budapest for finding new solutions to handle ash and other powder materials using dense phase pneumatic conveying and other innovative methods. The research and development department of MBE also works closely with a number of globally renowned research institutions including CMERI Durgapur, the Indian School of Mines at Dhanbad, the National Metallurgical Laboratories of Jamshedpur, the Indian Institute of Minerals at Bhubaneshwar and the Structural Engineering Research Center at Chennai.
As a next step, MBE plans to set up its own Centre for Engineering Excellence. It is currently in the process of implementing a design automation platform through the acquisition of PLM and 3D modelling analysis software. The company is particularly keen to support and empower Indian engineers—at the outset, expatriate Americans took care of major engineering, design and manufacturing projects, but the focus is now strongly on using Indian personnel. “We have clear plans in place to create a human bank of expertise,” says Singh. “By the year 2015 we have a vision of having 1,500 young engineers who are also familiar with our business and how it operates.”
The organisation itself is structured into distinct business groups, which each take full responsibility for a given activity. “I believe that this de-centralised style of management and the creation of separate profit centres is a strong motivational factor. Incentives are tied directly to output and unlike a departmentalised culture there is nowhere else to allocate blame if things go wrong,” he says.
Within the business, power and steel—the fundamental building blocks of any industrialised economy—stand out as being particularly fast growing. However, the company is nothing if not ambitious. “There are three new sectors that are very attractive to us,” he continues. “They are oil and gas along with nuclear power and the construction of cement plants.”
Singh expects to announce new contracts in each segment within the next year. In terms of oil and gas and opportunities within nuclear power, he is looking to India’s huge domestic market. India’s rapid growth continues unabated and he is determined to play a major role in its future. The cement business meanwhile will be global from the outset. “There is a clear synergy with our existing business and we already have the infrastructure in place to establish a global footprint,” he concludes. www.mcnallybharat.com
