The Hindu Business Line : The Laird of all things

The online version of the Webster dictionary says that `laird' is the name given to a landed proprietor and traces its origins to the English `lord'. And true to its name, Laird Group Plc has been master of whatever it has done. And, in 150 years' time, it has done quite a few things, from making ships to planes to buses to taxicabs.

Says Nigel Keen, chairman of the group, "Our genetic make-up is that we can change our business every 20 or 30 years into something completely different, and that's the reason why we think we are still around after 150 years."

In the 1970s and 80s, Laird moved out of transportation and into making motor components, "particularly specialist rubber components that make the car door shut smoothly," says Keen. And then when it found that the market had little growth in it and that the company was too small to be really significant, it exited that business and focused more on computer-based products.

Its agility and willingness to explore new markets and develop relevant capabilities, Keen says, are the reason that the group is around today. It now makes antennas, EMI (electro-magnetic interference) shielding materials and thermal management materials for mobile phone makers.

eWorld met up with Keen just before the company announced its manufacturing plant for Nokia in Chennai. Excerpts from the chat:

With miniaturisation of mobile phones, what changes have you had to undergo in the last 10-15 years?

In the time period that you talk about, we made computer enclosures and engineering components of the PC and that was to support Dell, Compaq and HP (they were all making PCs in Scotland). When they moved away from Scotland, our business was not very global and we sold it and moved out of that.

At the same time, we had had a building products business that made, amongst other things, door and window shields. The company's then manager saw the need for electronic (EMI) shielding. Some of the things we did in the building products, excluding materials - polymers - and wrapping them had some application in the electronics world.

We acquired the capability to metalise fabric and we started wrapping the polymers (this came from a US acquisition) that we used in the building products shields in this metalised fabric and started selling the EMI Gasket. That business went very well and it acquired a large market share. Metalised fabric is a woven fabric and coated with copper and conductive surface.

There, we created a large market share and from there, went on to other EMI sealing technologies in copper springs. If you need to open and shut a cabinet, you use a spring so that you could do it many times. So, we bought a company that was a market leader in the spring technology. We needed other plastic gaskets and so we bought another company that had that capability as well.

We started to look to globalise that business by trying to arrive in new manufacturing centres a little bit before our major customers. We needed a design capability that could create an EMI sealing solution at a place where the device was being designed and then deliver that solution anywhere in the world.

That went very well. We started plants in Eastern Europe, China and other parts of South-East Asia. Once that was well under way, we looked at other products that we could put through the same sort of system.

We then decided to move into antenna. We bought a company called Centurion, which was a market leader in that space.

You had a certain core competence. Were these forays incremental to that?

Our core competence was in EMI. This manifested itself on two fronts - one, in engineering design capability and customer contact; and two, to help deliver the products, which were made with small mechanical engineering skills. We were looking at other products that had those same facets. Handset Antenna had those facets - customer contact, engineering capabilities to make very small components in millions of parts.

We have just delivered the billionth antenna from our Beijing facility. There is a whole logistics challenge in those sorts of volumes of production.

We thus moved into antenna and did exactly the same thing. We expanded this across our network to our customers.

Into the handset world, and this is again part of our Group strategy, we delivered not just the antennas, but the EMI shielding as well. What is important in a handset is that you put a lot of active devices on the circuit board into a metalised can to form the shield. The can not only has to be a very precise dimension to fit onto the circuit board but also it has to be absolutely flat, as otherwise it will come off and will destroy the phone as well as the assembly line.

Is the shrinking phone a challenge to your design?

The shrinking phone is a challenge to our design but because we make these things very precisely, we make tiny little contacts, the size is not so important. . It is a lot of technology - called co-plenarity or flatness in the design to do the job - see if the can has to be reusable since you need to open the cans after production. These are quite complex in their form and design. We also have to have a packaging design to put it onto a tape in real systems to go into automated plants making handsets.

With these technologies, we look at integrating some of the things - mix the technologies of metal based forming with rubber technologies to give better shielding gasket performance to our customers.

How different is this now compared to 10 years ago?

Small companies used to do specialist things. Now we mix the technologies to provide solutions. When we started, customers wanted the seals in a particular way. Today, the customers just give the performance expected and ask us to do our own seal design. Now it is much more solutions-oriented than it used to be.

What about thermal management?

That is the third area we are in. As the devices become more powerful and smaller, heat becomes a problem, which will raise the temperature of the handset above the temperature that is allowed by the regulation. Hence the handsets require much more thermal management than before.

We bought a company that was in thermal material and we have expanded that capability across our global network to provide solutions to our customers.

You start to integrate the various different technologies so you can provide a more compact solution that does a number of things to make it easy for the customer.

Did you have to acquire design capability?

We acquire a technology company that has design capability, which we then spread across our network. Each of our major centres has design capability. The plant in Chennai too will have this. At the moment we are supporting Nokia from our Beijing plant. Once we start rolling out here, we will transfer those orders into the Chennai facility. We expect to become very busy very quickly out here at the Chennai plant.

As that happens, we will start adding the design capability to the Engineering base. Our plan is that the Chennai plant will start with servicing Nokia and will grow the Indian market with other customers, as the Indian market grows. For Nokia, we have five plants, including two in Beijing. So it means four locations for Nokia - Hungary, Beijing, Mexico and Chennai.

Why the need to have design and manufacturing close to each other?

Wherever the devices have been created, we need our engineers to be instantly available. The way we work is that we produce prototypes in 24 hours so they can turn around to solve the problems.

When you look at the antenna designs, for example, it is quite crucial that each change in the design of the handset will require retuning of the antenna. The problem with the antenna is that, it is not just the reception that you get on the handset, but if you have a poor antenna, the handset will automatically turn up the power. Then the battery life could become terrible. Hence you need a good antenna to keep the battery life satisfactory. And that's our skill.

Again if you are looking at EMI shielding, you don't want to take a long time in developing the new device and then finding that it fails the emission test so they can't take it to market. So you need to have really interactive design on the shielding side. That's why we have our technical centre close to our manufacturing base.

Given your history and the different businesses you have been in, what are you looking at now?

At the moment it is EMI, Antenna and Thermal Management. And each of these is growing very well. We are always looking at additional businesses. RF type of business - or radio frequency is something we are keen on.

New businesses will be along the same model — very close to customer, engineering-based with manufacturing capability. We would like to be a leader in the market we are playing in. We are not a huge company. We would like to be active in markets where small players have traditionally been the providers of service so we can compete with them by providing a global base that is more responsive to the large customer. At the same time, we like the markets to be not so large so that GE can come and compete with us. So we like to get protected at the top end by the absolute size of the market and at the low end by our global capability.

What were the India challenges when you were looking at Chennai/India as an option?

Actually, the one-window policy has worked quite well for us so far. Being close to Nokia has helped because they have been through a lot of these procedures. You really need to ask us the question in one year's time. The first approval would come in time but the last one, which would be important, might come in late...

There are infrastructure challenges.

Comments on China versus India?

The most noticeable to me is the infrastructure support. China is quite forward looking in investing in infrastructure, airport, power stations and water systems. It didn't seem to be quite the same in India. When the economy is growing so quickly, and the cities are growing so quickly, infrastructure investment needs to be made and that is a challenge for any Government.

It is also a challenge when you have an explosion of economic activity, which creates a belt and pulls people into main cities but does very little for the countryside. So the Government has to find a way to distribute that wealth in a way that is good for the large section of the society.

Did you consider locations in India other than Chennai?

If you are going to ship a billion antennas to anyone, it's better to have that someone next to the wall. Having a large volume customer urges you to put the facility close to your customer. It is a much lower risk proposition. Nokia is quite supportive of the idea that we will be shipping products from across our lines to other customers as well.

Are you looking at a location in North India?

We are taking it one at a time. We have to first make the Chennai facility work. It is our expectation that this will not be our last facility in India. It is very exciting to see the economic activity out here. Also, for us, the legal system and the language is a great help in India.

Do radiation challenges affect you as a provider of antennas?

To meet the emission standards, we have sophisticated systems to measure emission from an antenna before it is released to the customer. That is our test. The supplier of the handset has also to meet the requirements on the input side.

On the global standards, I think each country has its own standards, although there are international standards as well.

Do different platforms of handset providers matter to you... GSM or CDMA?

What customers want is all that matters to us. It is the technology base that they use we will supply. But, for example with Japan, North Asia and Korea, the North Asian standard is one we are less familiar with. It's really the customer base. With North Asian suppliers, it's easier for us to supply to places where they don't have a big presence. The other area is the plasma display panel. We have very good gasket solutions for these. These help us address those geographies.

Do you outsource design?

No. It is in-house. That's our core expertise, that's what we sell. That's what we enjoy doing.

What are the plans for the Chennai facility?

By the time it is fully operational, it will be about 1,500-2,000 people. We expect to see a highly automated production line.

How many mobile phones do you expect to support out of the Chennai facility?

We can support any number. The more they want the more we can support. We can easily expand assembly lines. Because we have a global system, we can handle sudden increases in demand by shipping from our other locations around the world. So, that's very flexible.

bharatk@thehindu.co.in

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