Technocraft was established in 1972 by two brothers Mr. S.K. Saraf and Mr. S.M. Saraf who are graduates and technologists from IIT Powai. Until 1976 Technocraft focused on the domestic market. India was not recognized as reliable export nation during those days, against all the odds, the company launched a major export drive in 1977. “Technocraft” was recognized as an export house by Government of India in 1979. Technocraft manufactures high precision and sophisticated Drum Closures Products and it successfully managed to capture the Middle East, USA and Europe export markets. Promptly the company established several foreign subsidiaries for stock mobilisation to their foreign customers.
From inception till 1994, Technocraft continued developing and increasing the production of Drum Closures until it became one of the largest and most recognized suppliers of Drum Closures in the world. The company subsequently in 1994 acquired “Maharashtra Steel Tubes Ltd” from Sicom, which manufactured Steel Pipes. Technocraft opened an office in United Kingdom (UK) to increase the European market and this was the turning point in its expansion program. In 1997, Technocraft diversified into manufacturing of Cotton Yarn. The Unit was accorded a 100% EOU status. The cotton yarn division is into Manufacturing & Exporting of high quality 100% Cotton Ring Spun Yarn. From NE 20 to NE 40. The spinning mill is equipped with world class Swiss, Japanese and other equipment. The cotton yarn division employs highly trained technical experts in all aspects of yarn spinning. The cotton yarn division has also forward integrated its operations by production and export of Garments through its subsidiary. It also has a 15 MW Captive power generation plant in the yarn division to cater to its power requirements. Technocraft as a group has been a predominant player in the precision engineering sector and it has done a forward integration of Tube Division by producing high precision scaffolding systems for building construction.
Technocraft has been constantly upgrading its capacity and improving its standards to meet the ever increasing expectations of its customers. The strategy adopted by the company comprises of growth through constant innovation, enter new categories, and focus both on domestic as well as foreign markets.
Replying to IIFL, Navneet Saraf said, “The country’s economic renaissance that already started with government-backed steps such as demonetisation and GST, will break the backbone of the parallel economy that is fueled by a large unorganised sector.”
How has being a multi-product company shielded Technocraft from the impact of demonetisation?
Technocraft was hardly affected by the tremors of demonetisation as most of our business is largely export oriented and the company works in the B2B segment, and today we are a recognised as the largest suppliers of Drum Closures in the world. We have our offices in some of the most advanced markets of the globe such as the UK which further helped us to expand our dominance in the European markets, and this became a turning point of the company. Apart from a robust export policy our institution always worked with key partners to soak in knowledge and to create a balanced presence in the international markets, which kept us insulated from any economic turmoil.
We have been a predominant player in the precision engineering sector, and it has forward integration of Tube Division of manufacturing high precision scaffolding systems for building construction. With the help of a subsidiary network, the company created a strong foothold in the international textile markets.
How will GST change the business climate of the country? Will it really be a game changer?
The domestic market contributes 10% of the total revenue of Technocraft. The country’s economic renaissance that already started with government-backed steps such as demonetisation and GST, will break the backbone of the parallel economy that is fueled by a large unorganised sector. These rebuilding procedures aimed at the democratisation of the economy are immensely beneficial for us. We hope to witness a strong surge in the revenue in the post-GST era.
The company is excited about GST as it will help our businesses to foray into the domestic market, giving us a uniform tax regime and a proper competitive landscape backed by a proper pricing skeleton.
GST will provide a common platform which will rationalise the things and taxation system in India and that will also boost our scaffolding business.
This is the beginning of a new financial year. How is the company planning to move ahead?
We recently launched our own brand in scaffolding, targeting the Indian market. In the last financial year, our domestic revenue touched a healthy figure in the Indian market,and we are aiming high, expecting to go beyond Rs 100 crore in India, and further we will expand in the domestic market and will target a revenue of Rs 250 cores by the end of 2019.
Protectionist measures in the West are creating hullabaloo in the Indian market. Is it a media hype or a reality?
Our product categories are unique and the US is a big market for us. The US imports a major share of our production. The manufacturers of these products in the domestic market of US are next to none, which gives us an edge, and I believe the protectionist policies will not do much harm to us. These protectionist measures in the US will provoke large-scale investment in the infrastructure which is extremely favourable for our scaffolding business.
How do you plan to face the dominance of the Chinese economy?
China has always been a stark competitor of Technocraft. But we respect their skills and that’s why we established a manufacturing unit in China. Which helps us to create a strong supply line to meet the demands of the world market.
How is China emerging as a manufacturing giant by toppling some of its biggest contenders like the US?
Chinese have created a strong skeleton to aid the growth of the manufacturing industry of the country. The availability of raw materials is abundant which is also pushing them ahead of others.
How will the planned Vidharbha unit add up to the present business of the company?
The Vidharbha unit is currently in land acquisition stage, and the company is waiting for the approval to procure the land, and it is expected to go through this fiscal year. The unit is likely to commence its operations by the end of 2017-18. Once the unit starts working in full swing, we expect that it will add Rs 80 crores in top-line, and about Rs 10 crores to the bottom-line of the present production.
As the company is in Drum Closure business and holds 40% market share of the global production, what are the issues that might hinder the growth of the company in this segment in the coming few years?
China’s emergence in the international market is a big challenge for us, and this growth might block the growth of the company in this segment.
How are you planning to duck competition?
The company is now targeting the central European markets. Apart from this, we are also planning to debut into the far East Asia such as Singapore, Malaysia, Thailand, Vietnam and Taiwan, which are some of the fastest growing markets of the world.
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