Leading India towards Industry 4.0

The INR 17bn, Ace Micromatic Group is India's largest machine tool conglomerate with a presence in several countries across Asia, Australia, Middle East, North & South America and Europe. Formed with the intent to provide its customers a one-stop shop for all machining needs, the group specializes in the manufacturing of CNC controlled turning, milling and grinding machines along with subsystems such as tool turrets, ATC etc.

The company employs 3000+ professionals and produces a third of all machine tools in the country and has a loyal customer base. As a b2b supplier to manufacturing industries with a presence across all sectors and segments, almost 60% of its business arises directly and indirectly from clients, which are usually small and medium-sized enterprises (Tier II and Tier III companies largely).

The group is well structured, with each company dedicated towards pursuing excellence in its chosen area. Some companies are product companies while others are service based. ACE Designers is dedicated towards

Turning, AMS for Milling, MGTL for Grinding, Micromatic Machine Tools for sales and service, Pragati Automation for Turrets and ATCs, and AmiT for Industry 4.0 and IoT solutions. By creating separate entities, the group has made sure that every aspect of its business gets due attention and a healthy synergy amongst them, facilitating cross-learning and rapid growth, making the group a leading machine tool builder in India.

The group has 17 manufacturing plants, 13 in Bangalore, two at Dobbaspet and two in Ghaziabad with a current annual capacity of 7,500 machine units – Turning, Machining and Grinding. By 2020 the company is confident of achieving 10,000 units annually. This translates to a CAGR of at least 15% till 2020.

To achieve these goals Ace Micromatic has a clear growth map in place.

• It is increasing its international market through exports. Currently exports account for 10% of the company’s turnover but the plan is to increase this to 15% in the next few years. The company has increased its market presence in several countries and now operates across Asia, Australia, Middle East, North & South America and Europe.

• It is increasing capacity. In 2013 Ace Micromatic invested approximately Rs 100cr to set up a foundry for captive consumption at a 10- acre facility at Minnapura, India, with plans to increase capacity to 10,000 machines by 2020. This has been up and running since January 2016, at 40-42 percent.

• It is planning to specialize in bigger castings of one tonne and above. The castings business is expected to create a new stream of revenue and enhance the export profile.

• As a group, Ace Micromatic invests about 2- 3% of its turnover in R&D, with a department for development at each factory. The company has plans to widen its product offerings and explore high-end machine tool building. This includes complex machining for aerospace, medical equipment and similar top-tier manufacturers.

Home Grown Production

A key driver for Ace Micromatic’s competence is the indigenous nature of its product development and manufacturing. Over 80% of components are sourced and built in India with only the computer system, drive, ball screws and bearings imported. The imported parts constitute only 55% of the total cost of the

machines. The raw material for machines is sourced from domestic foundries as well as the company's own foundry. According to TK Ramesh, Chief Executive Officer, Micromatic Machine Tools Pvt Ltd, “We continue to work on automation, robotics and gantry systems, with cost-effective solutions. We're focused on

providing Indian solutions that work for Indian SMEs." The company credits 70 to 80 % of its design and development activities to be customer demand driven.

Ace Micromatic has a history of designing computercontrolled solutions for the Indian market that are manufactured in India. Back 1982, gauging the market demands for a CNC (computer numerical control) machine, the company’s founding directors decided to begin local manufacturing of their prototype designs.

In those days CNC machines were imported and the process included long government procedures and a 300% custom duty. The aim was to make affordable CNC machines for the local market without external support.

To date the company has no foreign collaboration or investment but has been exceedingly successful in developing products that are viable in the India market. Both AMS and ACE Designers have been recognized by the Department of Scientific and Industrial Research (DSIR).

Customer-Centric, Affordable, Accessible

Today the Ace Micromatic group nurtures ambitious plans to move up the value-curve by offering design driven ‘Industry 4.0 ’ solutions to customers such as customised OEE (overall equipment efficiency) and real-time machine-monitoring. The solutions allow manufacturing companies to gain visibility into their shop operations up to a cycle.

Nearly 60% of its customers are SMEs with whom the group shares a close connection. For some of these small businesses Rs 15-20 lakhs investment on machines is a large outflow. The group prides itself on training and helping customers attain productivity through close relationships and hand-holding. As TK Ramesh points out, “Our success can be attributed to our collective ability to convert designs into making products cost effective. Looking back at the three decades of operation, we can confidently say that Micromatic played a key role in nurturing the SSI’s & the SME’s to adopt CNC technology and move towards global quality levels, through providing them with affordable CNC technology and close hand holding.” “I think it explains why we have the maximum share in the Indian CNC market,” he adds.

The shift towards smart-manufacturing in India puts Ace Micromatic in a unique position to introduce ‘Industry 4.0’ technologies to its customer base and gives it a degree of first-mover advantage in the SME space.