Pulraj Electronics gears up for expansion

Since Mumbai does not have the big electronics companies like Delhi or Bengaluru, Pulraj built its business by catering to local customers with small orders

By Richa Chakravarty

Wednesday, April 23, 2014: Established in 1994, Pulraj Electronics Pvt Ltd (PEPL) provides complete EMS solutions to a diverse group of customers ranging from medical, consumer, automotive, telecom, data storage and computers to several other industries that require electronics manufacturing for their products.

Located in Mumbai, the financial capital of India, PEPL manufactures printed circuit board assemblies ranging from prototypes and low volumes to large volume orders. It handles all aspects of a project, from design to complete product testing, relieving customers from the burden of manufacturing.

Initially, PEPL focused on designing, developing and manufacturing electronic controllers for home appliances, medical equipment and systems. The brainchild of Navnit Patel, managing director, who is ably supported by his two sons, Hemesh and Pulkesh Patel, PEPL was among the few companies to indigenously manufacture electronic controllers for original equipment manufacturers (OEMs).

After his retirement as a director of National Textile Corporation, Navnit Patel thought of venturing into the electronics industry. This was at the time electronics was coming into India in a big way.

PEPL started by indigenously designing washing machine controllers, which were being imported from Japan by Videocon. Subsequently, it began manufacturing for Voltas and Electrolux. “After assessing the situation, we thought of venturing into the electronics segment with indigenously designed and manufactured electronic circuits,” says Hemesh Patel, director, Pulraj Electronics.

However, the manufacturing scenario in India was not conducive for players in those days. From 1995-2005, PEPL had to face tough times as sourcing components was not an easy task. Importing components involved long lead times and by the time components were procured, the clients would replace their orders with new ones. Hence, the situation was not viable for manufacturing in India.

Despite all the challenges, in 2006, PEPL expanded its horizons, becoming an electronics manufacturing services (EMS) company. With its experience in design and development, the company switched its focus to EMS and installed a fully automatic SMT line. This is when it stopped merely designing for customers and started providing complete solutions. It started manufacturing highly reliable commercial electronic assemblies, and started offering a comprehensive range of engineering and production services. Today, its expertise lies in design engineering, including circuit design and PCB layouts, assembly line production and all aspects of inspection and testing.

The initial hiccups

Starting an EMS facility was not easy for PEPL. It had to face some initial hiccups, with finance being a major challenge. “Back then, the interest rates on loans were very high and procuring a loan was a difficult task. The banks, too, were apprehensive to give loans, especially to small scale industries. We borrowed money from the Maharashtra State Financial Corporation to set up the factory,” informs Hemesh Patel. The company had invested Rs 150 million to start an SMT line but it did not have any orders in hand. The directors knew that they had taken a huge risk but were also convinced that they would soon see orders coming in. From the start, the company had focused on catering to the EMS requirements of local companies.

PEPL’s USP is to cater to the needs of customers with small orders. Its move to serve local customers has been a strategic one. PEPL is among those few companies to manufacture prototypes of just five or 10 PCBs. “Unlike Delhi and Bengaluru, Mumbai does not have many big electronics manufacturers, so the customers here do not place big orders. Neither do the companies based in Delhi or Bengaluru like to place orders with firms like ours which are far away, due to hassles in procuring. Hence, our focus is on local companies in and around Mumbai. There are companies who want to get their products tested, for which they do not require a large volume. Realising that there were not too many companies offering services for small orders, we thought of catering to this segment,” shares Hemesh Patel.

Finding local customers was another hurdle for the company. PEPL focused on marketing and branding itself as an EMS player in the local market. “Finding customers locally was not an easy task. We had to do a lot of research to find clients. Since Pulraj was a known name and we had the goodwill in the market, our suppliers and our past clients helped us by giving us the leads. So, we built a team that looked after the marketing aspect. To gain eye balls in the market, we also began advertising,” reminisces Hemesh Patel.

While on one hand the company was facing the problem of finding the right clients, on the other, it was encountering delays in payments from its clients. Timely payment has always been an issue with domestic companies. Working capital is essential for all businesses and PEPL was no exception. At the initial stages, PEPL faced a lot of problems in recovering money from its clients.

Lessons learnt from failures

Holding on to their faith in the electronics industry, despite the several challenges related to finance, marketing and brand building, PEPL’s directors were determined to carry on their business. In its journey as an EMS player, PEPL did face some failures. Shares Hemesh Patel, “The electronics industry has one of the biggest shares in the unorganised sector, where there are counterfeit products floating in the market. Initially, we failed to understand this, assuming we were dealing with genuine manufacturers or distributors, due to which we had to face some difficult quality problems. We faced a lot of challenges in procuring components or products from genuine sources. With experience, we are now capable of recognising counterfeit products,” he shares.

Another lesson PEPL learnt was from its efforts to hire trained and skilled employees. “If the employees are not trained or do not share the company’s vision, it can be a failure on the part of the management,” says Hemesh Patel. PEPL organises orientation programmes for all its employees to make them understand the company’s vision, as well as their individual roles in the growth of the company.

Strategies to sustain the business

PEPL’s focus has always been on local clients from Mumbai, Pune, Nashik, Aurangabad, etc. It also exports to customers in the USA. From zero orders to 45-50 accounts currently, the achievements of the company have been commendable. “As our focus has been the industrial segment and customers with not very high volumes, we do not block the SMT lines for any one customer for too long. Our turnaround time is faster and we can deliver orders in almost seven days,” informs Hemesh Patel.

With faster turnaround, PEPL puts more emphasis on the right kind of customer—those who are genuinely interested in quality and timely delivery of products and solutions. Since PEPL has had bad experiences with inadvertently procuring low quality products, it strictly follows quality standards in its manufacturing process. It is an ISO 9000: 2008 certified company and ensures that its clients do not face any problems in quality and service. PEPL supports its customers completely and also sends its engineers to the customers’ workplace in case of difficulty. “The biggest reward for us is when our customers prefer coming back to us. Though there are rejections, the frequency is very low. Through our strict adherence to quality, we have retained most of our customers,” opines Hemesh Patel.

Future expansion plans

In January 2014, the company expanded its existing facility and established a new SMT line. It has already started receiving orders for the new production line. “By 2015, we are planning to have a wire harness line set up so that we can help our customers better. We are also planning to start another unit somewhere in Gujarat, but that will take some time,” informs Hemesh Patel. 

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