Govt policies are not good enough to encourage the calibrated expansion of medium-scale players: Vijay Gupta, Kwality

Wednesday, April 16,2014: Kwality PolyWa is a leading manufacturer in India, offering a wide variety of LED packages for lighting applications. The company is aggressively working towards expanding its product portfolio. In conversation with Kartiki Negi of Electronics Bazaar,Vijay Kumar Gupta, CEO, Kwality PolyWa, speaks about the company’s growth plans and the challenges faced as an LED manufacturer.

EB: What has the growth of your company been like over the last two years?

The sales figures of Kwality PolyWa power LEDs for lighting have grown by 50 per cent last year and by 200 per cent in the current year, so far. The growth in the sales performance of traditional products has been flat. Currently, all the growth comes from LED lighting.

EB: From which region or cities is there more demand for your LED products?

Kwality’s conventional LEDs have over 1000 customers across north, west and south India and in USA, UK and Germany. The Pollywog power LEDs have a strong hold over the regions of Delhi, south India and west India. Thus, we cater to demand coming from across India and we have good brand equity.

EB: In what way are your LED products technologically advanced?

The reliability of the LEDs is the bottom line for our various production processes. This comes from leveraging our experience of 25 years, maintaining cordial relationships with the world’s best vendors, and harnessing them to supply materials from premium bins at favoured prices. Our LED chips are 100 per cent probed and sorted, with defective chips having been removed from every wafer we use. We have extensive recorded traceability of every single input in each batch of production. At the touch of a button, we can access the history of even the smallest pin that goes into the manufacturing of our LEDs. We can also trace information about the operator, machine number, oven cycle, and even the ID of the holding tray used in the oven. The fullest possible control on the process flow, and the ability to spot a deviation and control it almost instantaneously, prevents us from huge losses and helps to keep us competitive. We began optimal engineering recently.

EB: What are the challenges you face while manufacturing LED products in India?

The major challenges are the fragmented volumes and the lack of a manufacturing ecosystem in India.

There is practically no supply chain for LED materials in India, and no facilities to outsource some processes on receiving large orders. Since 99 per cent of the inputs are imported and hence have long cycle times, we end up investing in stocks for 90-120 days, adding to the inventory-carrying costs and our inflated working capital levels. The costs of paperwork and uncertainties add to the production costs.

Though we have worked in partnership with the IITs and other universities over the last eight years, hardly any useful technology has emerged from them. Thus, there is always the need for quantum technology purchases from abroad, from time to time.

EB: Do any of the government policies help in boosting LED product manufacturing in India?

Not really. We do have excellent policies from the Department of Electronics and IT (DeitY) for the growth of the ESDM sector. The government has the potential to provide a real fillip to investments in the LED lighting sector. These initiatives are better suited for large MNC players, which is good in itself. But the policies are not good enough to encourage the calibrated expansion of Indian medium-scale players. In the absence ‘of a clear buying policy from the government, it’s proving quite risky to invest in new technology that gets obsolete fast, leaving no time for investors to amortise their investments. BIS standards also mandate certifications like LM80, which costs a million rupees per device (a firm’s marketing portfolio will have a minimum of six devices) and needs nine months to complete…too long a time, with the risk of a few packages becoming obsolete. The test facilities for this certification simply do not exist in India, nor are there any plans to create them. I personally know many Taiwanese players, who are yet to go in for the expensive LM80 certification as they foresee that the LED packages are changing and evolving so fast. One way forward would be to accept products from existing Indian players with a track record of over 5-10 years, and of sound reputation, selected on basis of their installed facilities and in-house test reports and linked to controlled testing by buyer agencies.

EB: Are you coming up with any new products this year?

We have been experimenting with CoB packages. They have the convenience factor in their favour, but the costs vis a vis discrete packages prove higher for most Indian bulb companies. We are certainly working with EMC and Flipchip technologies.

EB: What are your growth plans this year?

Kwality Photonics plans to grow by 50-60 per cent in 2014-15, which is good news, especially after the high base achieved in the current fiscal year.

EB: What marketing strategies do you follow? Are you looking for partners such as distributors, systems integrators, etc?

We have a very simple strategy—to be accessible and visible to every Indian LED bulb manufacturer and to maintain short lead times. We advertise widely across trade magazines, take part in popular LED shows, maintain updated and vibrant websites, respond to customers at lightning speed, and meticulously keep our commitments. We have a few dedicated dealers who can meet even the smallest requirements of our customers, we are not strict on MOQ (minimum order quantity) and we offer prices that keep the customers delighted always.

EB: How do you contribute to the development of LED product manufacturing in India?

I would love to start an LED manufacturing training institution and see hundreds of LED packaging companies spring up in India. We encourage interactions with engineering students. In the last few years, about 5000 students in 150 batches, from over 50 colleges, as well as faculty members have visited our factories. Scores of students have been given free internships and thousands receive our free handbook on LEDs.

EB: What LED products do you manufacture?

Our LED range is phenomenally wide. It includes through-hole HB LEDs, single/multi-digit dot matrix displays and light bars, and white LEDs for lighting applications. We are an LED packaging company that buys the wafer and produces the LED components or packages through die-bonding, wire-bonding and optically transparent encapsulation processes. At present, our most popular products are the 0.5 W 60-65 lumens LED in 5630 and 2835 packages, offered at the unbelievable price of around Rs 3 for bulbs and down lights. Due to the attractive costs, we have seen these being used for street lighting applications as well. The 3528 LED for tube lights is also popular for its excellent price performance ratio. The 1 watt and 3 watt LEDs are available in the traditional K2 package. The cost of the SMD 1 watt economy 505 package is half the K2 package due to the intelligent use of optimally-rated LED chips and materials that avoids over-design of specs.