We believe that we are in the right place at the right time

Upon completing his education, the now president and CEO of Rittal, Norbert
Mueller had joined the company as a junior purchaser in 1961, also the
foundation year for Rittal. From 1988 Mueller was responsible for development of
Rittals global marketing and sales, and in 2000 he was made the managing
director of Rittal Worldwide and then president of Rittal GmbH. In an exclusive
interview with Dataquest, the president and CEO of the largest housing
manufacturer in the world shares the companys journey and its Indian strategy.
Excerpts

Can you tell us about Rittals journey so far?

Rittal was the founder of standard size enclosures. The idea was to produce
this on a mass scale due to the advantage it offers in terms of cost saving, and
it assured high level of competitiveness to our customers. We figured that the
companies always need enclosures because they have to plan all the power
distribution, motor control and other components. That was the reason we decided
to have design enclosures based on standards and available on demand. For this
we have created an infrastructure of fifty warehouses where we store all
standard products available for direct delivery to customers. In India, the
demand is more for customized products.

We also shattered the myth that you cannot sell empty housings to
long-distant customers. We used to export products but slowly have started
localizing production. Currently Rittal has production facilities in eleven
countries. In the beginning of the 80s, we witnessed a major technological
change in the world of control equipments; there was a change from chemical
component to electronic components.

Rittal has completed 10 years in India. How has the journey been?

India is one of the emerging markets and this itself is of high importance.
Our India operations started six years before our China operations, which is not
a normal way for European and American companies. From the beginning we have
high competency, and highly skilled and talented workforce in India. The skill
and talent of the people to design software, handle high tech processes,
products and high tech solutions is quite impressive. And this was the
impression I got from Indian managers in the US, when we started our business in
1981. We have tie-ups with Mico Bosch, Siemens and other famous players here in
India. The growth of the telecom and automobile market provide a good business
opportunity to us.

We believe that we are in the right place in the right time, and the
opportunity is very high, especially in Bangalore. Now, we realize that we must
be closer to customers. Here, the distance between places is very high compared
to other places, and we have compensated by opening new warehouses and high
modification center in different parts. We have centers in Delhi, Chennai,
Bangalore, and Pune and have plans to open three more officesHyderabad,
Ahmedabad and a northern city that has not yet been decided.

Of the overall Rittal business, how big is the IT and telecom segment, and
in India what will that share be?

The size will be 35%, and in India it will be around a high 40%.

Within the IT vertical, what type of companies is Rittal looking at?

We have good business in data centers for banks and financial institutions
and insurance, and government administration. In the telecom services sector,
Reliance, Ericsson, and Motorola are some of our customers.

How has the design of racks changed over the years?

The design of racks has changed over the years from the sheet metal model to
housing for high tech installation to a multi-functional housing construction
where you can easily put in power strips, has the click-to-use direct cooling
concept, cold airflow in all direction, and point of heat.

The skill and talent of the people to design software, handle high tech processes, products and high tech solutions is quite impressive. And this was the impression I got from Indian managers in the US, when we started our business

What is your relationship with vendors like IBM, HP, etc?

We have a long-term cooperation with such companies. We sell our products
for HP, Dell and for one part of IBM as well. We are OEM suppliers for HP but
sell under a separate name. We find very competitive solutions for these
vendors.

What kind of support infrastructure does Rittal have in India?

India is a strong services hub in this region and we have good service
agents in this area. We have modifying centers across India in Pune, Faridabad,
Chennai, Hyderabad and Ahmedabad. These are our own 20,000 sq ft warehouses were
we stock our products, and we have service teams in sixteen offices across
India. We enter into SLAs with our customers. We have different types of service
contracts for spare parts orders by customers and different types of response
time depending on contracts. We have three types of customer service that
customers can select like advance, comfort, and custom service. With this, we
give services within 24 hrs, within 8 hrs and so on. We also have different
levels like golden, silver, and platinum level.

How do you see the manufacturing ecosystem developing in India?

There will be remarkable increase in the manufacturing activities for
coolers and other complete solutions. India itself is becoming a fast growing
market.

What will be the impact of rising prices of steel on your business?

The increase in steel prices has increased production cost. There is no
other alternative. We have already increased prices by 10% and this increase in
price has not affected our business here. In this case, it was very easy to
explain to our customers about the cost explosion, and that we were forced to
increase the cost of products as the cost of steel and electricity was
increasing. Nobody was unknown to this fact. Many of our competitors increased
prices by 15%, and our price increase was the lowest.

What are your investment plans for India?

We are planning to invest another 6 mn euros in the country. For expansion
and for machineries, we are investing a lot; another 2-3 mn euros in new
machineries and for mod centers around 10 mn euros. It is estimated that we will
export more. In the future, the capacity will also be increased to 35-40%.

Sudesh Prasad

sudeshp@cybermedia.co.in