India's S-CCI seeks to grow commercial vehicle business
Coolants specialist S-CCI India Pvt. Ltd. is in discussions with Daimler India Commercial Vehicles (DICV) to form a partnership. This follows its success in being able to supply the L415 grade of coolants to MAN Trucks India.
“In the same vein, we are hopeful of a nod from DICV in India, since CCI’s coolants have already been approved by Daimler Trucks,” explains SK Singh, director of S-CCI India.
In 1984, Indian company Sunstar entered into a technical alliance with Japanese coolants specialist Chuo Chemical Industries (CCI) in order to serve Maruti-Suzuki. They developed an engine coolant called Golden Cruzer, which triumphed against the then most popular coolant – water.
The success motivated Sunstar to open a small plant in Gurgaon in 1986 and they began to serve Tata Motors. The commercial vehicle (CV) maker ushered in the trend of trucks using coolants instead of water.
Sunstar and CCI entered into a formal joint venture in 1999. The company, now known as S-CCI, already had Japanese clients like Honda, Toyota, Nissan and Isuzu. Farm and off-road equipment makers like International Tractors, TAFE and Komatsu also became customers. Meanwhile, the commercial vehicle branch grew due to business from Tata Motors. At one point, it met 80% of Tata Motors’ needs.
S-CCI derived a quarter of its FY11-12 profit of Rs 140 crore (US$ 25.5 million) from the CV segment. The company over the last three years has registered an impressive year-on-year growth of 18%, and hopes to achieve profits of Rs 165 crore (US$30.1 million) this fiscal year.
The growth could be helped by an upcoming greenfield facility in Gujarat. When it comes online, the facility will help S-CCI to be closer to customers like Suzuki India Limited, Tata Motors and AMW.
S-CCI operates two other plants in Bhiwadi and Sitarganj. These factories help manufacture ready-to-use (RTU) products using fully treated de-ionized/de-mineralized water with special additives at concentrations prescribed by OEMs. The use of RTU products ensures quality as well as concentration or potency of chemicals throughout the service life.
S-CCI nets about 20% of its revenues from the aftermarket, where it utilizes 200 distributors. S-CCI’s aftermarket distribution is comprised of two different methods. It can either supply all of its coolants to OEMs for distribution to their dealers or distribute products directly to OEM dealers. This has a consumer benefit as well.
“Coolants are often bought upon recommendation from the mechanic. And, typically service outlets are located close to fuel-retail outlets, which insist on stocking only their brand of coolants. So more often than not the customer is left without a choice,” Singh stated.
(April 17, 2013)
