The Hindu Business Line : Pricol sees big money in engineering BPO

The BPO work in the engineering sector was different from other works such as call centres or medical transcription work because this requires a basic engineering skill and Pricol has vast knowledge especially in the light engineering segment.

Coimbatore , March 1

THERE is an emerging trend of Indian companies meeting the design engineering requirements of global auto majors, particularly of the light engineering industries and the expectations are that in the next few years, this segment may generate an annual revenue of Rs 5,000 crore.

Speaking to Business Line, Mr Vikram Mohan, Director, Pricol Technologies (P) Ltd, Coimbatore, part of the Rs 300-crore plus Premier Instruments and Controls (Pricol) group, said the company conducted a market survey before it took a plunge.

Pricol was involved in the manufacture of a variety of light engineering components for each of which there was an R&D and work was done from designing to assembly and manufacture.

He said the company decided to spin off its product development centre, which has seen a substantial investment being made in the past 25 years, so that not only Pricol but other companies too benefited from its designing expertise.

He said this was some sort of business process outsourcing (BPO) in the engineering sector. The BPO work in the engineering sector was different from other works such as call centres or medical transcription work because this requires a basic engineering skill and Pricol has vast knowledge especially in the light engineering segment.

The company wanted not only to offer a product but also benefits of its product development skills. He said the parent company, Pricol, also benefited because the customers of Pricol Technologies could also possibly become customers of Pricol for the manufacture of components. He said there was a `very good chance' of an American aerospace company, for which his company was doing the product design, entrusting the manufacturing business to Pricol.

A Canadian company also was on the `verge of becoming a Pricol customer'. He listed the appliances (consumer durables) industry, auto and automotive component sector, aerospace and the toys manufacturers among the potential customers.

He said while most of those in the engineering services industry were involved in the conversion of paper drawings into electronic drawings, Pricol Technologies provided services from 2D drafting to 3D modelling, product design and reverse engineering, finite element analysis, rapid prototyping, tool design and manufacturing tools, covering the entire cycle from design to manufacture. PTL had one domestic client and nearly 15 overseas clients from Australia, England, Canada, the US and Switzerland.

He said the company's head count has grown to around 35 since its launch 18 months back and hoped the number of employees would grow to 100 by the end of 2004.

He expected the revenue this year to be about Rs 10 crore to Rs 12 crore and anticipated the revenue to go up to Rs 100 crore and the employee strength to around 350 in five year's time.

It will also have representatives in Europe and the US by the end of the year and also was looking at on-site projects for which it would depute its staff to its clients' sites.

Mr K. Parameswaran, Vice-President, said customers who came for design work were coming back for problem solving relating to their other products since they had confidence in the company's ability.

Mr P.S. Vinay Kumar, Member-Business Development, said consideration of intellectual property rights (IPRs) played a crucial part in the foreign companies parting with core designs for working in India and he expected that over the years, Indian companies would be able to earn the trust of their business customers from abroad.

Mr Vikram Mohan, assessing the potential of the light engineering BPO companies in India, said there was room for at least 50 top-notch companies in this work with each of them comfortably logging Rs 100-crore plus turnover annually taking the total turnover to Rs 5,000 crore.

He saw this as a prelude to India becoming a global manufacturing hub for the engineering industry.

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Pricol sees big money in engineering BPO