RANK 15: Celetron India: Three For One

AT THE END of the day, a total annual growth rate of 19% and revenues of Rs

1,033 crore were respectable enough, but Celetron India's performance in fiscal

2001-02 could have been stronger, had it seen the components slowdown of the

fourth quarter coming. Still with a 61% share of the overall hardware exports

revenue for the year, Celetron is India’s poster boy in hardware exports.

The company has three divisions–Advanced Technology Devices, Tancom

Electronics and Celetron Circuits–engaged in the manufacture and exports of

magnetic head stack assemblies for hard disk drives, voice coils for hard

drives, coils for smart cards, memory modules and PCB assemblies. In addition to

head stack assemblies for HDDs, the company volume manufactures memory modules.

It also began manufacturing cable harness assemblies for the fiber-optic

industry last year.

Performance Highlights The first three quarters were robust, pointing toward 40% overall annual growth Memory business jumped to Rs 72 crore Strengths Expertise in electro-magnetics and PC board design and engineering capabilities Regular addition of new product categories, expansion of business realm and categories Weaknesses Vulnerable to global components outlook and the Asian economic scenario Still at component level of manufacturing, hasn’t been able to scale up to end-products Celetron India Pvt. Ltd. l Startup: 2000 l Products & services: Head stack and head gimble assemblies, memory modules, Smartcard antennas, voice coils l Address: Unit no 9, SDF-I, SEEPZ, Andheri (East), Mumbai-400096 l Tel: 8291919/02 l fax: 8291176 l Website: celetron.com

A major part of the revenues–92%–came in from head stack

and sub-assemblies, totalling Rs 952 crore. Then came memory modules, worth

nearly Rs 72 crore, followed by voice coil assemblies at Rs 9.6 crore. The

company sold 18 million units across these product lines in fiscal 2001-02.

Revenues through the quarters mirrored the course of the slowdown. In the

previous year, the January-March quarter was the most productive, with revenues

of Rs 257 crore. This fiscal, however, JFM was a washout, with revenues of only

Rs 162 crore. Celetron's exports are targeted at computer peripherals and

sub-assembly manufacturers in Malaysia, Singapore, Europe and the United States.

And balancing this tri-geographic exports thrust-to the US, Europe and the APAC

region-are engineering set-ups in California and Mumbai, purchase offices in

Singapore and California, and sales and marketing offices in the US, the UK and

the Far East.

Celetron’s business is capital-intensive due to specific infrastructure

requirements and dynamic changes in technology. And while it is the country’s

largest hardware exporter, it doesn’t represent the leading edge of

manufacturing practices. Being at the lower end of the value chain, most of the

work that comes its way is due to the cost advantages that India offers. Moving

up the value chain would mean engineering and manufacturing end-products, albeit

in the contract mode. For the moment, however, Celetron India doesn’t appear

equipped to do that.