Finolex has carefully laid out its pipes business, using its Urse plant to spearhead operations. BY MITALEE KURDEKAR
Tucked away to one side of the bustling Mumbai-Pune expressway, lies the Finolex Industries Limited (FIL) PVC pipes plant in Urse. Although the plant appears quite unassuming from the outside, a closer inspection reveals a full-fledged manufacturing unit that functions out of an almost-linear layout, with the entire plant spread out over a sizeable 32 acres of land. Although the plant was earlier operating out of Chinchwad – where the company’s corporate office is also based – by 2008, the city had grown around the plant, requiring FIL to move to larger premises. This is how the Urse plant was born.
“Urse is a fantastic location, right on the highway. There is, therefore, a lot of merit in keeping on increasing the capacity there, which we will be doing. Pune has become a central focus for us. Since Urse is close to the head office in Chinchwad, we manufacture all our new products here and then transfer them to the other plants,” reveals Saurabh Dhanorkar, managing director, FIL.
Today, this plant churns out 90,000 metric tonnes of pipes per year, which, in essence, translates to about 275 metric tonnes per day. There are two manufacturing units, a fitting and threading unit, an office and production building and behind that lies a storage and dispatch unit. There is also a laboratory and a separate engineering department. A large variety of pipes are manufactured for different applications, from irrigation purposes to complete building materials, including plumbing, sanitation, sewage etc. In addition, special purpose pipes, such as bore pipes and casing pipes for deep well drawing, are also produced.
the production process is a fascinating one! The primary raw material – poly vinyl chloride (PVC) resin – makes up close to 88% of all the ingredients necessary for the manufacture of pipes. This is produced at Finolex’s backward-integration plant in Ratnagiri and transported to Urse. A separate warehouse building houses this PVC resin in jumbo bags, ranging in size from about 73 kilos to one tonne. Other raw materials such as calcium carbonate, chemical stabilisers and lubricants are also stored here. All the raw material is received through trucks and kept in this warehouse, from where a pneumatic conveyance system then transports the material to the silos (storage tanks). The simple process involves workers in the warehouse workers emptying bags of raw materials into machines known as tipping stations. An SS pipeline then takes the goods to the silo. With a total mixing capacity of 300 tonnes per day at the plant, some intermediate storage is needed, making the silos a must. Each large vertical cylinder or silo can hold around 250 tonnes, while smaller ones contain about 25-30 tonnes worth of materials.
Once transferred, these raw materials, which come in powder form, are then sent to a mixing section, where colour pigments are added to the mix. The colours are, of course, industry-defined standard shades, specific to a particular function. For instance, grey is reserved for agricultural pipes and white for plumbing pipes. Once the pigments are added, the material goes through a hot mixer, followed immediately by a cooling process. The compound formed post this process is stored in another silo, ready to be conveyed to the extrusion section. And that is where all the magic happens! Extrusion, which involves converting the compound into a pipe of the required size, is carried out simultaneously on 16 lines.
“On the extrusion line, the material is transformed from its compound form to a semi-gel PVC, also called a dye. This dye is then used to make various types and sizes of pipes. The material will pass through the machine in a process called vacuum and cooling. At the next stage, the pipe is further cooled, and then a printing machine prints the company logo on the pipes. After this, they are sliced at intervals of six metres (length of transport trucks) by the cutter, which has a length counting sensor on it,” explains Milind Magar, senior general manager, maintainence and development, FIL.
Following this, the socketing machine is used to heat the pipes and create sockets. PVC, like any plastic, can be heated, made soft and deformed to the required shape. This makes it possible to couple the pipes later. Once this is done, the finished products are loaded onto trucks, via trolleys, and dispatched to the warehouse on site. In some cases, the pipes are first forwarded to the post operation section for threading and slotting. The finished pipes are also checked for efficacy, via a simple tool, and in case of any rejections, the pipes are crushed and re-used to make a pipe, once again.
Practically the entire process is automated, with very little labour required. In fact, Arun Sonawane, vice president, pipes division, FIL points out that about 90-95% of the entire plant is automated. He further explains, “One skilled operator can run four lines of the extrusion process. But once the pipes are cut and finished, we need a lot of unskilled labour for the handling of the finished pipes. That is a manual job and involves moving the trolleys, taking the pipes off the trolleys, loading them onto the trucks and shipping them to the various warehouses. That is where we need a lot of workforce. In addition, we have technical experts on site.”
Dhanorkar vociferously agrees, saying, “The technology used in the manufacturing of pipes has been mastered by us, since we are in this industry for the past many years. We keep adding products, in terms of new types of pipes and fittings. I think the challenge going ahead is going to be getting skilled manpower. We can get them at the top level, but at the mid to junior level, it is becoming increasingly difficult. We are focussing on that now. FIL has a very strong retention ratio, and our attrition rate is very low. We have a lot of focus on training, with a structured, ongoing training programme.”
Although Finolex has traditionally been an agricultural pipes company, they have now ventured into construction pipes. However, when they send out salespeople to meet builders and architects, these representatives are not equipped to handle technical queries. As a result, Finolex is now committed to ensuring that every person on the field will be trained in basic plumbing. They have even tied up with The Confederation of Real Estate Developers’ Associations of India (CREDAI) in an effort to provide a training course and certification to 500 plumbers. Dhanorkar believes this move is not just another CSR activity, but will also lead to better laid construction pipes, hence better handling of Finolex’s products in the near future.
Safety is another aspect that is taken seriously at Finolex. The entire production process is not very hazardous, given that there is very little sound and a filter is installed on top of the silos. This collects all the fine particles that are blown with an air jet and fall back into the material, ensuring that there is no escape of particles outside. “I have to thank our backward integration part of the business for safety measures taken. We run a PVC resin plant, which is a petrochemical plant and such plants needs to have high standards of safety. So culturally, the same safety norms then get translated all along. We have a regular safety department at Ratnagiri and that team comes and trains people at the other plants. They are trained in safety, in terms of not just how to handle an incident, but how to avoid them as well. This is an ongoing activity; it doesn’t happen overnight. Because the concept of safety in India is low, that is something we keep hammering: Whatever you do, safety comes first,” says Dhanorkar.
He also opines that quality is something that gets prioritised at Finolex. A laboratory carries out testing on each fresh batch at the Urse plant. All the pipes are checked for quality, specifically for pressure and impact. Other tests include reversion, dimension, strength and so on. “Quality is very high on our priority list. In fact, if you ask what drives us, it has always been quality. Right from our first generation promoters to today, one thing that has always been common is to never compromise on quality. Of course, once the organisation has its culture in place, it automatically flows,” says Dhanorkar. He adds that although they are a large company, given that they sell 200,000 tonnes of pipes, which translates into thousands and thousands of kilometres of pipes, every year, the number of complaint received is miniscule. Yet, these are taken very seriously, with every complaint tracked.
Although Dhanorkar is at the helm of affairs, he leaves the aspects associated with manufacturing to the technical experts on site at FIL’s three pipes plants at Ratnagiri and Urse, in Maharashtra, as well as Masar in Gujarat. However, he is actively involved in the plans for expansion. “All three plants have the potential to accept increase in capacity. This is mainly because many of the machines that we have are old, in terms of both age and generation. New generation machines have a larger capacity, so you can practically double the output from the same space. We have started replacing the old lines, one by one, with new lines that generate a higher output.” This idea is reflected at Urse, where old machines are making way for modern ones, in a sort of brown field expansion.
Sonawane adds, “We used to bring out one pipe at a time, earlier, whereas now we can produce two, or even four, pipes. The productivity has gone up, while the labour needed has reduced. Less power is utilised for the higher capacity machines. With the margins getting thinner, we have to make more economical and better quality pipes. That is our main intention.”
There is also, very obviously, a larger picture in mind. FIL is targeting high growth figures in the coming years. “We are at around 20% of the market today. The potential is huge. Today, the market is divided between organised and unorganised. Although we continue to be the largest player in the market, there are around 500 players, including the unorganised ones. Slowly, we see the share of the organised sector going up, because people are becoming more brand conscious,” believes Dhanorkar. Sonawane adds, “By 2020, we want to be a $1 billion company. We are expecting 15-20% growth every year, so by 2020, the capacity should have doubled. We intend to plant this capacity at various locations.”
Although their highest selling product is agricultural pipes, Finolex is now selling building pipes more aggressively. Just last year, they started with the production of CPVC pipes in a separate unit at the existing Urse plant. The unit will be a testing ground for these pipes, which have hot water applications, following which they will be manufactured at FIL’s other plants. The production process is similar, including storage, handling, conveying and extrusion.
All in all, Finolex’s strength lies in their quality and the extensive range of products on offer. They have captured the market, mainly on these grounds, but the journey is still underway. According to Dhanorkar, there are plans to expand the business to the North East and capitalise on the existing market position in order to claim a bigger share of the pie. The Urse plant will, of course, be the stepping stone for any future success. And Finolex looks determined to speed up the process, carefully laying the path to success just as its range of pipes are found laid across the length and breadth of the nation.