Exports
- Business India: December 25, 2000-January 7, 2001
Benchmarking
The Best
Accepting that it cannot aspire to
world size, this
intermediate chemicals company aims to be world-class
Sekhar
Seshan
Deepak Mehta's ambition for the eponymous chemicals
company he heads is nothing new. Others have said
it before and so has he. What's different is that
Mehta, managing director of Deepak Nitrite Ltd
(DNL), is putting his money where his mouth is.
"Our investment in research and development
is significant," he says, explaining what
DNL is doing to achieve its aim to become world-class
and one of the two or three best-known companies
in this field globally. Confirms company president
Suresh T. Gore: "The Deepak R&D Foundation
has bought analytical equipment worth Rs70 lakh,
to set up a unique facility, which is comparable
with any other in the world."
The flagship company
of the Rs 800-crore Deepak group, DNL has the figures
to prove its increasing competitiveness in the world
market: Its exports of Rs 42.5 crore in 1999-2000,
on a turnover of Rs 177.52 crore, were 13.4 per
cent higher than the previous year's Rs 37.5 crore
on a total income of Rs 162.92 crore, when it earned
the status of an export house. This performance
won it the Indian Chemical Manufacturers Association's
merit certificate. At between 23 and 24 per cent
of sales, however, exports continue to be well below
Mehta's earlier predictions of exporting one-third
of all production. This, he says, is because of
bad global market conditions, stiff competition
from cheap Chinese exports and a weakening demand
in the European markets.
"Instead
of an import substitution, we are concentrating
on making an export-oriented effort," Mehta
explains. "We don't want to be a 'me-too',
but keep rising in the value chain. For instance,
we closed our formalde-hyde plant and buy our requirements
from a neighbouring factory. Hence the substantial
investments in research and development, including
the setting up of a new pilot plant, which is already
scaling up laboratory processes and preparing new
products for customer trials."
"It is a unique set-up," says Gore. After
Deepak took over the Pune-based Sahyadri Dyestuffs
and Chemicals in 1984, it shifted the entire R&D
effort from its other units - in Taloja near Mumbai
and Vadodara in Gujarat - lock, stock and barrel
to the Sahyadri premises. With a 30-member team
of scientists, post-graduates and 12 PhDs in different
disciplines, the centralisation of the facilities
has, according to Dr R. Khaute, a former Boots veteran
who is now DNL'S vice-president - technical in charge
of R&D, created 'an intellectual atmosphere'.
The pilot plant, made by converting an existing
nitrobenzene plant, provides a miniature capability
for most chemicals, allowing the scientists to make
batches varying from as little as 250 litres to
a kilolitre. R&D is not just in the laboratory,
explains Khaute. The same group leader travels with
the product, from the concept stage to the 100-gm
or 200-gm trial manufacture to the plant, acting
as a guardian for the product till it reaches the
customer. A parallel group of chemical engineers
work alongside the development team, to widen the
chemists' vision in practical terms; the execution
group steps in at the final stage.
Gore and Khaute share Mehta's pride in the accent
on quality. All four units - inorganic and organic
intermediates in Vadodara and the two fine chemicals
divisions in Pune and Taloja - are ISO 9002. "We
have been breaking the mind set on quality assurance
in the chemical industry since day one," says
Gore. "Such attention is normally paid only
in pharmaceuticals." In some products, like
ortho-nitro-chlorobenzene, the company has attained
purity levels higher than those of even German and
Japanese manufacturers, and reached performance
levels of as: high as 99.9 per cent beyond- just
meeting the customers' specifications, he says.
Relying on R&D as what Gore describes as 'the
central nervous system of our being', DNL has also
initiated an academia-industry interaction with
bodies like Mumbai's University Department of Chemical
Technology, the National Chemical Laboratory in
Pune and the Indian Institute of Chemical Technology,
Hyderabad. "We have sponsored research projects
convert scientific knowledge into nitty-gritty,"
says Mehta.
DNL, Mehta says, is now bringing in information
technology to integrate its divisions. And with
R&D connected online to the world, its scientists
have the same information level as those in Japan,
the US or anywhere else. "We are moving from
product expertise to process expertise," says
Mehta. "Three to five years from now, we'll
have some great things!"
