In Conversation: In the business of saving lives
Nov 04 2016
Steelbird MD Rajeev Kapur speaks on the opportunities in both the domestic and the international markets
In spite of all the awareness that is being created, a vast majority of Indians think of helmets mostly at times of mishaps. How is it to be in that industry?
The helmet industry is a very tiny industry today in India. Even though the courts and even the governments have made it mandatory for two-wheeler riders to wear helmets, it has not been enforced strictly. There are only three cities in the country today – Delhi, Jaipur and Chandigarh – where this is strictly enforced. When it is not mandatory, we cannot expect people to fall in line. If it is made mandatory and also strictly enforced, it will take this industry to a different level. For instance, at present the Indian market size for helmets is around 10 million per annum. If helmet wearing is strictly enforced, the demand will easily be ten times more and touch the 100 million mark per annum.
To get ready that kind of capacity, the industry will require an investment of Rs 3,000 crore upfront. However, it is not that easy to grow capacity for this industry, which needs lots of technology and is a volumetric industry, one which requires lot of space, automated capacities and helmet manufacturing is very labour intensive too. To produce 1,000 helmets a day, you require 100 manpower resources. Helmet industry in coming years will generate a minimum of 50,000 direct jobs and several more indirect jobs.
On behalf of the industry, we are already educating the people through various modes, including videos. But, we cannot spend too much on the public awareness part. Only the government can do it. Unless governments strictly enforce this, the public will not care, even though it is their precious life that we all are concerned about. These days almost all OEMs had started providing helmets through their sales channel and we feel this will help quality helmets to automatically reach a wider audience.
Despite talk of quality, off late we get to see several lives being lost despite the riders wearing a helmet. Why is it so?
About 85 per cent of ISI marked helmets sold in India today are fake. People are selling ISI marked helmets for Rs 105 and these are full-faced helmets with visor. There are more than 207 ISI registered helmet manufacturers in the country. Frankly speaking, more than 100 companies will be operating in a 20x20 room or a 40x40 room. They do not have moulds, machines or equipment that are required to make quality products. If I have to fight against them, I have to wage a lone battle. Am surprised, the authorities are not acting against them. On the other, the riders should also realise that helmets from an established company like Steelbird costs upwards of Rs 900 or with some trader discount from Rs 800.
Then how can one rely on helmets sold for Rs 200 – Rs 300 for their safety. It is like buying spurious drugs and medicine. If one gets a heart attack and what he buys is a spurious medicine, then naturally the patient will die. Similar will be the case with fake helmets during mishaps. In fact, in such times, the fake helmet breaks and pierces the head thereby causing the death of the rider more than due to the fall or the mishap. I sometimes feel, some of those riders would have been alive had they not worn a helmet at all. A good quality helmet costs just about Rs 1,000 and can serve for 10 years, if maintained well. It is for the governments to act on this and come down heavily on dubious manufacturers. But, till now helmet is not in mandatory list of ISI markings. While electrical appliances, pressure cookers and gas burners are in the mandatory ISI list, a life saving device like a helmet is not in that list.
The government is spending huge amount on infrastructure like sub-ways, footpaths and over-bridges among others for the benefit of the public. By just making helmet law enforced, it will save millions of lives without any investment from the government part. Most importantly, it must start enforcing the helmet law strictly district wise across states. Even then it will take five years for complete strict enforcement across the country, by which time branded helmet manufacturers too will have time to overcome production constraints.
Can you throw some light on Steelbird's manufacturing capacities for helmets and markets you tap?
We have three plants for manufacturing helmets and all the three are located in Himachal Pradesh. While the first plant has a capacity to make 9,000 helmets per day, the second one has a capacity for 6,000 units per day and the third plant, which was set up recently, also has a capacity to make 6,000 units per day. So, we have a built up capacity to make 21,000 helmets a day. But, we are not making those many now and are keeping the capacities ready for the market to grow, when the governments implement strict enforcement. And as I mentioned earlier, the market demand will touch 100 million per annum, when helmet wearing is made mandatory and enforced strictly in India. If that happens, the country will also be facing a huge shortfall in manufacturing capacity and fresh investments required too will be huge. For instance, for our third plant, which is not yet fully ready, we are investing Rs 30 crore for the 6,000 units per day capacity. Anticipating the future requirements, we are also planning to set up a fourth plant with a capacity to roll out 60,000 helmets per day with an investment of around Rs 250 crore. That plant will come up in Rajasthan. In addition to helmets, we also produce components of helmets like buckles, visors, chin straps and interiors and we supply these to all leading helmet brands around the globe. Our supplies reach to customers in around 50 countries. We also export helmets, but have reduced the numbers off late. Helmet is a very complicated product to make and different markets have different standards. For instance, in India one has to follow Indian standards and for Europe, there is European standard and the American market has its own standard. If one has to cater to all these markets, then the investment goes up five times as we need to invest in different moulds and allied manufacturing capabilities. To roll out a new type of helmet, it takes at least two years from design to final production. There are lot of complications and hence the reduced focus on exports. However, we continue to export to markets and countries like Africa, Nepal and Sri Lanka in small quantities. At the same time, we are scaling up our component exports, while retaining our focus on the Indian market, where we are the leading player in the country with a market share of around 30 per cent in terms of sales by organized players.
How big is the overseas opportunity for India-made helmets?
Actually, there is a huge opportunity for exporting helmets. There are numerous types of helmets to cater to and not just for two-wheeler riders. There are helmets for industrial workers, construction labourers, cricketers, horse riders, fire fighters and those for army and police personnel and scores of other categories. But, helmet is an artistic product and needs lot of passion to make them. That’s why it is an entrepreneur driven industry globally, because it needs passion. Passion to make, and passion to sell. We are focusing on the horse riders segment for the export market now and for the automobile segment in India. We are also into riding gears segment, which is an emerging market in India, and plan to roll out a retail action plan for that soon. We can do more and cater to the vast global opportunity.