Right from the early days of founding Su-kam, Kunwer Sachdev, its founder, realised the importance of investing in R&D to power the nation’s need for energy. Today, the company has steadily grown to become a Rs. 600 crore company and is eyeing a growth rate of 70 per cent this year
Power shortage is a problem many of us have learned to live with. But Kunwer Sachdev, who manufactured cable TV equipment in the 1980s, was not willing to take it lying down. When the inverters he used also did not serve the purpose of providing power back up effectively, he took it apart and found there was much room for improvement.
And so he started Su-kam in Delhi in 1988 to provide quality power backup solutions, which was then a cottage industry. But knowing the limitations of such inverters, he invested in R&D. From one research engineer in 1991, the company today has a full-fledged R&D team of 40, and owns over 60 technology patents. The R&D department has also been endorsed by the Department of Scientific and Industrial Research, Government of India, for the work it does across product ranges. It also received the Elcina-EFY Award for Excellence in 2010.
“In India, there are several challenges in the power segment from generation to distribution,” says Sachdev. He started with backup solutions initially for homes, and then expanded the product range gradually and today, services a range of segments – including solutions for businesses, green inverters and batteries for OEMs (original equipment manufacturer) and even customised solutions, like the one for Bharti Walmart, to cater to the varying power needs of a retail chain.
In the initial stages, there were challenges as the unorganised sector dominated and there was no concept of branding. But the currently Rs. 600 crore Gurgaon-based Su-kam managed to establish its name because of reliable products. “There were several local players mushrooming at that time, and even we used to copy,” he admits. In fact, in the first year, he manufactured 100 inverters which had to be written off due to unsuitability. He realised that such products did not last and that Indian solutions were needed for Indian conditions, so he focused on research and innovation. The strategy paid and as the products became reliable and robust, expanding the market on client reference became easier. “We apply for almost two patents a month and publish papers,” he says, and then adds, “But it takes five to six years for the patent to be granted.” Since, by then, the technology is already old and they are on to the next technological development.
However, as a result of this constant innovation, the products are more reliable. Even dealers and distributors today prefer reliable products with good service support, as otherwise they are at the receiving end of the customers’ ire when the product requires frequent service. “Today, the balance has shifted to only the few branded players dominating the market,” says Sachdev. Though barriers to entry are not high, the technology is intimidating. “Also, today, only those who have been there for several years have managed to survive,” he explains. As a result, only those who are here for the long haul, by working constantly on technological improvement, can survive.
The market is also quite huge – not only nationally, but internationally too for the players to expand. Su-kam is also present in countries like Bangladesh, Bhutan, Nepal and Pakistan (through Dubai since direct trade is not possible), and the entire African continent. Even developed nations like Japan now have a client base after natural disasters like tsunamis that reinforce the need for backup solutions. As a result, the exports are expected to grow from Rs. 90 crore last year to Rs. 720 crore this year.
While the company has been growing at 20 – 30 per cent year-on-year, it is expecting a growth of 70 percent this year. The grid collapse in the northern part of India a few months ago also pushed the sales of backup solutions tremendously.
The way forward
The main products for Su-kam are inverters batteries and UPS. It has also started focusing on generators and has tied up with Kohler India, a subsidiary of the US-based Kohler Corporation, for gas-powered generators. It is also present in the non-renewable energy field with solar powered solutions and is a channel partner for the Ministry of Non-renewable Energy, passing the benefits of the subsidiary the Ministry offers for such products to its customers. It will also develop large inverters for longer backup and small generators.
In 2006, the company received 19.18 per cent of the paid-up capital as investments from Reliance India Power Fund, which is now a major stakeholder. But Sachdev does not plan to seek further funding and believes that the company can fuel its own growth.
Su-kam currently employs 2000 people, mostly in manufacturing and service, which is an important component of its business. One of the greatest challenges the company faces is in finding and retaining good talent, especially in sales. “In five years, we can strive to become a Rs. 5000 crore company. The bigger challenge is to get the right people,” says Sachdev. Even in R&D, he loses employees after training them. “But many return because they do not find such an environment in other organisations,” he says with justifiable pride.
Given the power situation in the world, Sachdev plans to do what he does well. “In the 1990s, I predicted inverters will become obsolete. But nothing has changed from then to now, and I was proved wrong,” he admits amused. The market has not reached saturation and for Su-kam, power solutions will continue to accelerate its growth.
Powered by power shortage
Though power shortage is a recognised problem, nothing much has improved over several decades. Su-kam, which is an established player in UPS, inverters and batteries segment, is entering power generation and solar energy segments too. For power generation, the company has its own generators and plans to introduce small generators that are easier to manage and provide for short-term power needs. It has also tied up with Kohler for gas-powered generators and also plans to introduce big inverters that give longer backup.
Su-kam has been in the solar energy field for seven years and is a channel partner for MNRE, passing on the subsidies for solar products it makes that the Ministry provides to its customers. While developing nations are part of its client base, developed countries are also seeking power backup solutions, especially since the tsunami in Japan. Overall, the company is expecting a growth of 70 per cent due to the power problems in India and abroad.
AT A GLANCE
- Power shortage due to insufficient generation and distribution losses
- Su-kam started in 1988 by Kunwer Sachdev because backup solutions available then were not up to the mark
- Starts by copying European designs
- Abandons and invests in R&D from 1991
- R&D recognition by GoI in 1996
- 60 technology patents
- Markets pan India and in other developing nations – presence in 70 countries
- Present across power backup and generation categories – UPS, inverters, generators, batteries etc.