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.
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.