Conformal coatings are pivotal for ensuring the protection and desired performance of printed circuit boards. So what does the PCB coating market look like in India? What is the best strategy to succeed in this business here? Dr Lee Hitchens, technical director, SCH Technologies, answers these questions in a conversation with Baishakhi Dutta and Sneha Ambastha of Electronics Bazaar.
EB: What are your main business growth drivers in India?
I believe that by offering the right materials and the right products, your business can change. Overall, I sell 300 products across the globe but in India I sell only around 50. We focus only on those products that we understand are in demand in the Indian market and keep the rest of the products aside. For example, LED coating is very much in demand in India. So I am introducing a new technology to the biggest LED coating suppliers in India. LEDs, optoelectronics, automotive and defence are some of the major sectors that we focus on in India. We are planning to bring in abundant products for the Indian defence market, and we also plan to change our business models.
EB: What are the obstacles that you face in the market and how do you plan to overcome them?
Transport is a huge obstacle in India. Getting the proper infrastructure in India is very difficult. We cannot expect one person to be in India and maintain the whole territory. We need to have staff in all the key areas for that. That is the only way to support our Indian facility. The bureaucracy is also a hurdle so simplifying it will help a lot. Logistics also plays a big role.
People manufacture in India so that they can avoid the import duty. This is also the reason why India does not get a lot of products, because it’s very difficult to bring in products from outside India despite using the best logistics services. The country is paying the penalty for this bottleneck because India is not getting what the rest of the world is.
EB: Have you ever faced problems in convincing Indian customers to buy your products?
Indian customers generally ask two questions—how good the product is and how expensive it is. I actually haven’t faced a challenge in convincing them. Indians are very adaptable. If they think the product is good and comes at the right price, they will buy it at any cost. Having said that, cost is a big challenge since India is one of the most price sensitive nations I have ever operated in.
EB: Are you adopting any particular strategy to promote your brand in the Indian market?
We use all the social media. We also use our newsletter. We organise seminars and, of course, we exhibit in order to make Indian customers aware of our products.
EB: What potential do you see in the Indian market at present and in the coming years?
We have noticed that the level of technology has improved and so has the knowledge level. The expanding business in optoelectronics and mobile phones in India is proof of the growing scalability of India’s market. A population of nearly 1.3 billion presents a huge market for local sales. Keeping this growing market in mind, we expect 5 per cent of revenues to come from India.
EB: How is SCH growing in India?
In India we have grown around 50 per cent in the last three years. I first used the old business model that is based on agents and distributors. I subsequently changed that model and started direct business in India, and that has made a huge difference. Now I have technical experts who understand the products and know what they are talking about when they are selling them. This is helping us grow significantly in the Indian market.
EB: Do you import your raw materials?
It is a global business now. If the products are made in India, they will be sold in India only. It is wrong to think that we don’t buy products from India but, at the same time, we also buy from global suppliers to maintain the supply chain.
EB: In terms of investments and job creation, do you have any future plans for India?
We are probably going to hire four sales people this year itself. We are growing very fast in India. We have recently taken a full range of chemistry from a leading brand in UK. The quality and cost of this range suits the Indian market. This means we need experts in cleaning and coating, for they go hand in hand.
EB: Are there plans for any further manufacturing set-ups in India?
We have our offices in Hyderabad, and a manufacturing unit in Mumbai. We are looking to set up a coating service centre in Hyderabad for some very specific films used in optoelectronics. If everything goes well, hopefully within the next few months we will start off with this new unit. As of now, we do not have any acquisition plans for India but globally (USA), we do. We are looking forward to four such acquisitions worth US$ 50 million, two of which are expected to be completed by the end of October and the remaining before the end of the financial year. Of the first two, one is a US$ 15 million company while the other one is worth US$ 10 million.
EB: What new materials and chemicals have you come up with?
We are marketing a new range of products because, at present, the requirements in electronics protection vary so much. We have coating technology that is one or two atomic layers thin (we call these nano-coatings), and goes right up to the thick film technology. What we offer depends completely on the application. Our new technology is hydrophobic – it is completely water repellent. It is a low cost technology that is used in a lot of application areas. One good example is the mobile phone. Nowadays, all mobile phones are expected to be water repellent.
What we have is the full solution. We can talk to customers, find out their needs first and suggest the right product rather than trying to fit a readymade solution that may be the wrong one.
EB: Do you manufacture only conformal coatings?
We have 300 different types of coatings. Starting from metal oxides to multi-layered ceramic and organic systems, silicon, epoxy and thin film, we have everything but what we sell entirely depends on the application area. It’s a huge market since everything nowadays is becoming coated.
EB: With respect to rapid prototyping, what type of coating materials do you have?
We have our UL approved conformal coating in aerosol format. We can state categorically that the UL testing is the best in the world now, since that is the highest qualification any material can get.
EB: How do you find the market in India?
I have been working in this market for nearly 12 years and we have seen an exponential increase in the last couple of years. The level of quality has improved and maybe that is because the manufacturing base has improved in India. When I first came to India, the level of knowledge was much lower. India seems to be catching up incredibly fast.
EB: What can be done to increase that knowledge level even further?
We do a lot of seminars and try to pass on technology. We have technology based blogs. Life is becoming more and more complex because everything is getting integrated. Education of people is really needed, and has to be treated as part of the product package. We can disseminate information through independent websites, seminars, etc, and reach out to more and more people.
EB: Do you manufacture in UK?
We manufacture in India in order to cut down costs by avoiding import duty. We have a manufacturing plant here in Mumbai. We also manufacture in the USA as well as in UK.
EB: How has your business model changed over the years?
It has got more flexible and that is because of our global reach. I have different business models for different countries as well as for different sectors. I have a coating service model in UK where I take the products from customers and do the coating. But that does not work in Asia. I have tried it but failed. People in India do not want to give me their products for they want to do it themselves. In India, 99 per cent of the customers we deal with want to work on their products themselves, and that is where we differ from them. Indian companies need to understand that there is significant technical expertise involved in such work.
