Ace Designers began its foray into manufacturing of machine tools and has seen a constant upswing since.

This story is as romantic as it can get. Three engineers working in an institute come together and start a design company in a garage. They didn’t need much capital since they were consulting a known set of clients. Their clients persuaded them to give a finished product. Soon their innovative products were lapped up by an eager industry and they were exporting to Germany and Italy. Today they are the largest players in India and have plans to capture a share in the global market. In 2003-04 the group turnover was Rs.235 crore and next year estimates are Rs.350 crore. Now, could we dream of such a company in our own Peenya which was once a cremating ground for sick units.

Started 25 years ago, by three partners, Shrinivas Shirgurkar, Benedict Machado and A V Sathe, Ace Designers stands evidence to the fact that you don’t need much money, foreign collaboration or a huge market to become a respected brand in India. Infact today if you look around in the automotive industry, foreign joint ventures are disappearing leading to independent players building indigenous technology, asserts Shrinivas Shirgurkar, MD, Ace Designers.

The romantic beginning

Shrinivas narrates, “We were working together in the Central Manufacturing Technology Institute and we soon started doing design consulting services. Started with literally zero investment, we were working out of a garage in my house. Initially we just gave away the design to our clients, but later started producing special purpose machines like Auto Lathe used for automotive parts.”

“Later looking at the trend of automation we decided to produce Computer Numerically Controlled machines in 1986. The first machine LC-16 CNC Chucker was displayed in IMTEX-86 expo and got tremendous response from the market. Since we had an advantage of competitive pricing over the imported machines, we soon became the largest CNC machine producer with a 45% market share.”

Peenya - the phoenix

While the automotive industry has been growing steadily, Peenya has sprung back to life. But is this growth a temporary phenomenon as witnessed in the late 1990s… Shrinivas clarifies, “There has been a substantial growth in motorcycles segment and the exports of components which is driving the machine tools sector. We are quite bullish about a continuous surge in the domestic market enabling us to grow beyond 100% selling nearly 1000 machines in a year.

“We believe that the golden period for Indian manufacturing has come and there will be steady growth in the next 5 years. Peenya is now producing 40% of the machine tools done in the country. The problem was that the first generation of Peenya industrialists flourished during the 1980s and 90s in a protected economy. But when the second generation entrepreneurs took over, the industry stagnated and they couldn’t sustain the growth. As the real estate prices shot up, it was more profitable for them to sell off their properties and move away.”

Base for future growth

Should manufacturers look to India or the global market for larger revenue…? Shrinivas says, “We are mainly concerned with the domestic market, though our exports are also growing. 50% of our clients are export oriented units and the rest are in the domestic sector. With the taxes and duties coming down, there has been increase in business overall.

There is a clear correlation between the machine price and demand. The VAT structure will rationalise the tax structure leading to reduction in cost. Excise duty reduction for cars and other vehicles is driving the demand for our CNC lathe machines. Industry is becoming mature with the rising purchasing power and lower interest rates from banks. All these factors are leading to a sustainable boom.”

No foreign collaboration

It seems that it has been a flower strewn path for Ace Designers all this while. Where did they derive the strength to sustain a year-on-year growth for 25 years… “Since we were consultants, we always had a steady demand and were profitable from day one. In those days indigenisation was the mantra, since foreign machines were costly and not intune to the Indian needs. Indian industry was protected from imports and there was an undue emphasis on foreign collaboration. In this situation we were determined to produce an innovative cost effective indigenous machine. Subsequently now the theme is global competitiveness by sourcing from anywhere in the world competitively.”

“The serious disadvantage in collaboration is that you are forced to buy all your components from one source paying high duty. Rather we would want to stay independent and have the choice to pick the most cost effective parts. We came out of CMTI which being an R&D organisation that gave us a deeper understanding of the fundamentals. From that basic knowledge, we could conceive any product in any engineering sector. HMT was another nurturing ground for all of us. Since we couldn’t import anything we used to source all our needs from Fanuc systems or Kirloskar Electric.

Create a New Concept

“A CNC lathe machine is surely three times more costly than its mechanical counterpart, but its production quality and quantity is much higher. While industries started to realise the need for consistent quality, entry of Maruti Udyog brought in a tremendous improvement in the accuracy of component production.

Now replacement of mechanical machines is happening in a big way and CNC is no more awe inspiring. But in ‘1998 IMTEX’ we unveiled the ‘Jobber’ at Rs.13.5 lakh which changed the industry scene making it the largest selling CNC.

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