Quality that sticks

Quality that sticks

Its products may be ‘invisible’, but Henkel is leaving an indelible mark across Indian manufacturing.



Be it a fancy Boeing plane or an ordinary packet of potato chips, adhesives are a basic requirement in most aspects of manufacturing. Although they appear seemingly insignificant in the grand scheme of things, the fact is that the value of adhesives is best gauged in their absence! Capitalising on this need is Henkel Adhesive Technologies. Having an almost 140-year-old global history, Henkel can well be hailed as the grandmother of adhesive technology. Although it has a presence of a mere 30 years in India, the company has managed to capture a sizeable share of the domestic market, through its strategically located plants, like the one in Thane.
“We run our business on a local basis, in terms of the way we serve our customers. Historically we brought European technology to service emerging markets. However, over the last five to ten years, we have turned the business on its head a little bit. What I mean is that we are doing the research and development much closer to customers,” says Jeremy Hunter, president, Henkel Adhesive Technologies India Private Limited. A case in point is the seven new R&D centres opened around the world, including one in Pune, which is geared primarily towards the Indian market. In fact, this local unit has now started exporting technology to other Henkel markets too. “Many years ago we were a German company with overseas subsidiaries. Now we are genuinely global in the way we approach the market, innovation and technology,” he believes.
Similarly, the Thane site happens to be one of the nine manufacturing units that Henkel operates out of, in India. Built on a 36,000 sq-m area, which also includes space for future expansion, the site is broadly divided into three plants, a flexible packaging academy and a warehousing unit. Around 43 employees work at the plant, operating in three shifts, over a 24-hour timeline. Of the three plants, there is one each for water-based, hot melt and solvent-based adhesives. The water-based plant has an in-house polymerisation capability; while the hot melt plant can produce adhesives in chicklet and granule forms. The third plant produces solvent-based adhesives, used in products such as sneakers and other shoes.
“We are big suppliers of adhesives in the shoes and sneakers business. We supply to Nike, Adidas and several other key players in the shoes business. That business is doing so well we will be increasing the capacity at our Thane plant next year for this purpose,” says Hunter. In addition to footwear, the products manufactured at this site are used for making envelopes, soap wrappers, graphic arts, paper converting, bottle labelling, packaging, wood-working and lamination. The well-known brands that are manufactured here are Loctite, Technomelt and Aquence.
As such, the company operates in three broad adhesive business segments: transport and metal, packaging and consumer goods, and general industry. The plant also exports products to some countries in the Asia Pacific, Middle East and Africa. Given the vast scope of operations, it is obviously imperative to have a robust supply chain network in place. However, different businesses tend to have different models. “In the automotive business, Henkel directly supplies to Toyota, Hyundai or Maruti. But in the general industry adhesives business, multiple customers are involved, making it difficult to cater to all the customers directly. Hence, we have a distribution network in place,” says Bappa Bandyopadhyay, director, operations and projects, adhesives, Henkel Adhesive Technologies India Private Limited.

With nine manufacturing locations, Henkel is truly spread across the length and breadth of the country. Yet a growing business means a growing need for expansion. With their eyes firmly set on India, given its potential as an emerging market, Henkel has big plans with regard to local business expansion and has recently announced plans to set up India’s largest adhesive plant at Kurkumbh, near Pune.
As Hunter explains, “Our trend analysis shows that India is one of the growth markets for adhesives. To better serve our growing customer base in a dynamic market like India, we need to provide local solutions while leveraging global technologies and expertise. The investment in Kurkumbh showcases our strategy and commitment to accelerate our growth in India. It will strengthen our customers’ and suppliers’ confidence in Henkel as a committed partner and create a new industry benchmark as the largest adhesive manufacturing base in India.” The upcoming Kurkumbh plant, with an annual capacity of 80,000 metric tonnes of adhesives and surface treatments in the first phase, is set to begin production in early 2017. With this venture, Henkel plans to capture the Indian market’s growth potential and meet all other objectives by virtue of its size, proximity to customers and best-in-class technology.
In fact, the Kurkumbh plant signals a lot of changes. Henkel’s warehouses are currently set up across the country, including ones in Rudrapur, Delhi, Jamshedpur, Hyderabad, Mumbai and Chennai. However, around 60% of the raw materials used during production are imported today, mostly through the port in Mumbai. This obviously means that the company does not currently have a lot of suppliers in India; but that is bound to change, going forward. In fact, discussions are already underway with major suppliers, with regard to the Kurkumbh plant.

Although localisation is a huge part of Henkel’s plans for India, the ethos from its parent company in Germany also trickles down to reflect in the Indian operations. “Around the world, our vision and values serve as a bond, enabling us to utilise the full potential of our internationality and diversity. Values relating to customers, people, finance, sustainability and family are a part of our DNA. What this means is that: We put our customers at the centre of what we do; we value, challenge and reward our people; we drive excellent sustainable financial performance; we are committed to leadership in sustainability; and we build our future on our family business foundation,” points out Hunter.
An important aspect of these values is being echoed in India in the form of safety, health and environment regulations. Bandyopadhyay says, “Behavioural safety is very important today. And this is something that we need to drive very strongly, especially here where the shop floor employee is expected to do something that is not in his DNA. In India, we rolled out culture-based safety last year, across all our sites. On the shop floor, we have clear tracking mechanisms for all our safety KPIs (key performance indicators), including behavioural safety. We track leading and lagging indicators on safety.”
In addition, quality checks are conducted for incoming raw materials and in-process checks take place at various stages of our manufacturing processes, which include polymerisation, blending and mixing. “About 50% of the manufacturing operations at the Thane site are automated. After we produce our final products, we have a stringent quality control, which includes bonding and adhesion tests, and many-a-times, application checks,” says Mahesh Aloni, plant manager, Henkel Adhesive Technologies India Private Limited. Also, a dedicated Product Development Centre at the site caters not only to our industrial adhesives plants in India, but also to the entire IMEA (India, Middle East and Africa) region. The site also houses a fully equipped quality control laboratory, which is manned by a qualified team, who ensure material delivery of the right quality, to ensure customer satisfaction. A research and development (R&D) laboratory is also present, as is a highly qualified technical service team.
In addition, the site houses the Henkel Flexible Packaging Academy, which offers certified training programs on lamination technology to flexible packaging industry professionals across the IMEA region. Training at this state-of-the-art academy is based on the principle of ‘Learning by Doing’. This training is particularly important, given the money at stake. For instance, it is noteworthy that one kg of laminate costs about Rs 200 and the adhesive used in it is less than a couple of rupees. Yet, if that laminate has defects, then for that two rupees’ worth of product, one ends up losing Rs 200. Similarly, the cost of adhesives in a shoe is about Rs 10 and the price of a pair of shoes is about Rs 5,000; thus, if the adhesive is not good, then one loses so much more than just that basic cost.

Apart from these measures, Henkel adheres to best practices and manufacturing excellence by simplifying their processes in order to become more efficient. In early 2013, certain global organisations were created with this purpose in mind. One of them was lean manufacturing. Looking to eliminate all sorts of waste to improve efficiency and productivity, a global lean organisation was introduced. “All our plants have adopted lean manufacturing. We have a roadmap for each site, which we track on a monthly basis and one of the important components there is lean. For example, what is your change over time? What is your overall equipment effectiveness? What is the utilisation of the machine that you are running for three shifts? Then of course we run Kaizen, which is continuous improvement,” says Bandyopadhyay. With regard to technology benchmarking, they have global centres of competence for all their technology clusters.
Sustainability is also a vital part of Henkel’s makeup. Yearly targets are set and, more importantly, there is a year on year reduction target for water, waste and energy. Henkel has a global vertical, which looks after sustainability alone. There is performance tracking every year and separate capital investments are earmarked for projects, in order to achieve these sustainability targets. For example, in many plants, electrical lighting has been converted to solar lighting.
Of course, this is all done, while also keeping revenue in mind. The global ambition, according to Henkel, is something called 20-10-10. That’s roughly 20 billion euros in sales, of which 10 billion will come from emerging markets such as India, and finally growing their EPS (earnings per share) at a CAGR (compound annual growth rate) of 10%. The local ambition is to double the size of the business in five years. Some of this is bound to come through GDP growth, but most of it is predicted to be a result of new applications, new customers and innovations.
Hunter best sums up the way ahead for the company, when he says, “We are looking to expand the market and find new applications for adhesives. And my favourite example is the auto business, where earlier cars where bolted together or riveted and now to a large extent they are glued. And the additional benefit in this, apart from Henkel sales, is that the cars are lighter and quieter and more comfortable to drive. They use less fuel too. I won’t say the light weighting movement is driven by Henkel, but we are making a contribution to that, which is going to keep us in the forefront of developments.”

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