On consumer electronics - tell us about this new vertical and the scale you're building?
New customer we never worked with, new product, new process, new technology. A scale which is unheard of and one of the world's largest and most admired brands, handpicks Motherson as their trusted partner to not only help in their overall global supply chain, but to partner with them in creating an entire ecosystem in India. To give you some context, what the highest selling volume is done by any car in India in a year, we have to produce that level of components in one day. And that's why we are building this facility, the size of 33 football fields, and we won't even play football, in Chennai and it'll come up over the next 12 to 18 months.
What do you think differentiates Motherson, or what did you find unique about our group through the course of your association with us?
First of all, as the name suggests, name itself is relationship. And during my course of interaction, I would say 13 years now, I have seen that you value every relationship, including bankers, you value every relationship. That is something really touches me. Then the second thing recently, when I was having discussion, you have crossed the number of employees that the State Bank of India has. So, I mean, that was amazing. That was amazing. Another thing that I saw today, in my relationship earlier, I thought mainly automotive company, but today the kind of diversification I have seen and especially the health section, which I shared with Sehgal sir also. I mean, I'm really amazed at that and that is what I told
What do you find unique about the group and what differentiates us in your opinion?
Well I will say, it's been a fantastic journey of learning and just one word, Chaand Sehgal. The man's vision, his determination, his aspiration and his attitude of never giving up. So, I have seen it over the last 25 plus years and I think his ability to execute not only in India, but across many continents, many countries with many different nationalities, I think is something what we all have to learn in India if we want to truly globalize. I mean, their never give up attitude, I've only seen it in two companies in India, in Motherson and Reliance.
What differentiates Motherson and what excites you about our growth story so far?
Hi, my name is Anupam Johri from Raiffeisen Bank. We are an Austrian bank and we have seen Motherson over the last, I would say, decade or so. And we have been, (A) following the group, and (B) trying to become banking partners for it in Central Eastern Europe, where our bank is quite strongly represented. And I'm extremely happy we managed to do this. And we are now a part of your growth story. And we hope to be associated with you for many years in the future.
Papa, it was such a big honor for all of us for you to be up there. You're only the second Indian who's received this award. What a wonderful event that was in memory. How did you feel? And please tell us about that.
Actually, I feel humbled. I think the award was basically for all the Mothersonites. They have done all the hard work, and I just go and take the award. I think Lord Krishna tells Arjun that you are Nimitmatram, I've already done all these jobs, I've already done. So I feel very humbled.
I want to talk to Papa because he's the one who originated the first-year plan and Created all the stress for all of us here at Motherson that now that we have to keep coming with the five-year plans that we did that may be you can tell us how it started and why we do this.
Well, we listed our company in 1993. 1993 we were about eleven crores / two million dollars was a turnover. And I was lucky, I had Nimesh Bhai and Durgesh Bhai coming to meet us every year, finding out what was happening about the car company. And I had done some calculations on the computer, which was a new thing at that time, you know. Computers were not very common. And I just put the component prices and Five years this thing and it was coming out that we would be somewhere around close to 100 crores Turnover and we were 12 crores or 13 crores under that. So, I was very proud and I was telling the Durgesh Bhai and Nimesh Bhai, boss we will be 100 crores by this thing.
On operational excellence and Motherson SAS - what are the main pillars of operational excellence roadmap?
First, using digital model of our factories, we optimize layout through scenario simulations, enabling us to have the most efficient material flow and assembly line configuration. By doing that, we are improving the surface needed in our factory, reducing it by 20%. Following up an upgrade of our digital model into digital twins, we collect numerous data out of our operation. And we are capable with that to even continue to improve our physical world, reducing the staff and manufacturing costs by 15% in direct areas. The implementation of all those automation technologies allow us again to reduce the direct efforts in our factories by 20%. Thanks to those improvements, thanks to AI, we foresee a further improvement of our efficiency by 20%.
On asset sweating and life extension - how have you actually extended the life of an asset?
One of the examples that we want to explain to you is how we have actually extended the life of an asset, and we've done many, but this is very special because Mr. Sehgal actually bought this machine in 1988. An injection moulding machine bought in 1988 is still running. Actually, I shouldn't use the word still running. It's running even better with lower power cost, lower cycle time, and higher accuracy. And we've done that by developing all this capability to refurbish and extend the life of machines all in house, not depending on external suppliers. Asset 37 years in service and still growing going very-very strong. Half the battle is won when our associates understand the ROCE equation that when the denominator goes to zero ROCE goes to infinity half your job is done.
On logistics - how did you build internal vertical of logistics to tackle disruptions?
I'm happy to report today our 3PL logistics is 12% lower than our historical averages and our global intercontinental freight contracts are consistently below every global indexes that is published. So doubling down on our experience and those learnings and playing into Motherson's global injection molding strengths, we are extremely pleased to announce our latest joint venture with Sanko of Japan. Sanko is Japan's largest sustainable packaging solutions manufacturer and distributor. And through this JV, we will be able to offer the world's Some of the world's best sustainable transit packaging solutions across the Motherson ecosystem as well as to our customers.
On sustainability - what have you achieved across planet, people and governance domains?
We've increased by 24% the level of renewable energy that's being used in the Motherson Group. That's brought our emissions down a 7.7% improvement in our scope 1 and scope 2 emissions, despite the growth that we're going through. And then further looking at water is very important. We operate in a lot of countries where there's water scarcity, and we know that's an important thing to focus on. A 27% improvement in our water intensity in the last two years. And then last but not least, let's look at waste. It's the precursor to creating a circular economy. And 89%, almost 90 % of our materials that go into a waste situation are going to be recycled. Ultimately, we aim to have zero to landfill, but we're already at a very high level.
On IT and AI - how is Motherson leveraging technology and AI?
It's a CMMI Level 5 maturity assist company with ~3,000 engineers. And just to give you a background, approximately 40% of these engineers have been recruited in past two years. We did some 20 plus acquisitions in the last two years. 100% of those acquisitions, irrespective of their size, whether they were 5 million, 1 million, 500 million, all of them were integrated into Motherson by our own IT folks. So, we had almost negligible involvement of external tech vendors to bring those acquisitions home. We have set ourselves very ambitious goals of at least automating 30% incremental workloads or transactions using agentic AI and bots. This would translate into at least 15% of additional efficiency being delivered on our white collar workforce.
On red unit turnaround - how is the team replicating success from the last five-year plan?
What has been presented before, 80% of the red units between 20 to 25 have been eliminated down to 10. The 70, we're not the same journey. It's not by chance. By the nature of our ingoing growth, we do inherit some of the units. 70 is the number. But our talent, one of our key talent, is to turn them around and improve the operational efficiency all along the P&L line. We talk about material yield, scrap reduction, lean management, Kaizen workshops, automation, logistic cost reductions. We talk about overheads reductions. We also talk about restructuring when, unfortunately, Not avoidable. One example, MPP Brazil 2020 minus $10 million, 2025 plus $10 million, speaks by itself. Complete turnaround.
On aerospace business - what are the secrets of success and what does the next five years look like?
We've had an astounding 550 times growth in the last five-year plan. Today Motherson is one of the fastest growing Indian aerospace companies. Today, Motherson is the only Indian Company that is exporting aerospace components to Japan. Any Airbus, or Boeing aircraft that flies today has a Motherson part on it. An aircraft is made of more than a million unique part numbers. We're only doing 6,000. So there is a huge opportunity for us to increase content per platform. We are going to work with our customer to ensure we do more acquisitions in Europe and in North America so that we are able to do more complex parts and we're able to do larger assemblies. We have already signed today two customers in the MRO space. We are working with a European airline. We're also working with the MRO division of a major engine supplier to supply aftermarket parts to them.
On the Energy business - how do you design 100% green energy solution keeping in mind the 2040 net zero vision?
Currently, our power demand is in the range of 300 to 400 megawatts across the Globe. 4x top line, 4x power demand. We are looking at a demand of in excess of one gigawatt, which we would like to transition to renewables in a phased manner across our global operations. As we speak, projects worth 250 megawatts, hybrid captive projects, wind solar hybrids are under implementation in various states in India. Demand for this unit is 100 megawatts. Yes, you heard me right. One single unit, 100 megawatts. We have the potential of doing one of the world's largest solar rooftop Installations in the world on this particular roof. The last 25 to 30% will be done by implementing additional renewable capacity with battery energy storage systems, power trading solutions, as well as minimal purchase of green energy attributes to reach 100% green power, not by 2040, not by 2035, but by 2030 for this particular facility.
On Japan expansion and the Honda relationship - tell everybody about the wonderful work in Japan?
Japan and Honda, synonymous. All of us know Honda to be a very high technology company. They make everything from small engines to motorbikes, cars. and even small private jet aircrafts. But when it comes to their home country, Japan, this high technology company can be super traditional, super conservative, specifically when it comes to their reputation, their face in front of all the stakeholders and the Japanese public at large. And yet this very same super traditional, super conservative Honda decided to entrust a foreign, a non-Japanese, a gaijin company, Motherson, with not one, not two, but three of their supplier companies. Yes, Yachiyo, Atsumitec, the two names that you see here. And third one is Yutaka, which we just announced a couple of days ago, and we are in the process of closing. This speaks volumes about the confidence which Honda has in Motherson.
On people and integration - how do we integrate new people coming on board and train people to take up more responsibilities?
What we have done all over the group is while Vishal is building a mega factory, we are building a talent factory across the globe. We have started a numerous number of programs which we all link together to make sure that we have sufficient bandwidth inside the management, not only to the business today, but as well the business which is coming up on our journey to 2030 that all together creates talents inside the group. We have a strong belief that there is enough talent inside the group but as well we need to be clear with the acquisitions, we take and we get talents as well from outside. So we are not concerned on the upcoming journey that we have enough if we focus on our own talents. If we run these programs, we all are following our Chairman by developing the number two's and with this I'm sure we are well prepared for the journey 2030.
On wire harness and vertical integration - tell everybody how you are continuously breaking records?
Way back in the late 80s, when we were building wiring harnesses and importing a lot of child parts, the government of India didn't have finances, the foreign currency, to allow us to continue to import, and our localization started with a constraint. So, we were forced to localize. And what came out of constraints and challenges actually became a strength over a period of time. A wiring harness has multiple components. It has got connectors, it has got terminals, junction boxes, wires. So, if we see our history in the last five years, we have grown nearly at the same level which we did in the last 35 years of our history in the wiring harness division. While we invested in all these areas, we were also investing in IT. Mr. Sehgal, from the very beginning, liked computers and computerization. So, when I joined the company, even in 1990, we had computers. We were the first ones in the industry to get laptops.
On SMR / Vision Systems and Camera Monitoring Systems - share all the wonderful things you're doing in SMR?
It has been an incredible journey, going from 500 million euros to 2.3 billion euros now. And all of this has been possible with the growing trust that we could get from our customers. It all started with Audi coming to us and asking us if we would like to engage with them on a proof of concept for CMS. And to be honest, we really did not have that knowledge of putting a system together like that at that time. The breakthrough for us was with MAN Trucks when they came to us and said, we would like to work with you. And it was really a very, very complex system. We didn't realize when we started the journey, but we had to actually put together 2.3 million lines of coding to really deliver to the image quality and functional safety requirements that they had and then that went on. We've been able to develop our own cameras now, we do our hardware, software, algorithms, we have a full testing lab, we do our EMC testing in house, we have an image quality lab in house, we do homologation and we have now in house expertise on cyber security, over the air updates and functional safety. When we started this journey, it was about 10x. I would say now it's going down to 2.53x.
On China presence and Chinese OEM strategy - how is Motherson positioned with Chinese OEMs and EVs?
Motherson has an extremely strong foothold in China. We have 33 facilities doing multiple product lines with all our technologies already there. We have 13,000 talented people already in that region and five very strong joint venture local partners that help us navigate through all the that we have over there to help us solve and partner with us, to help us grow in that region with a local face that can really make sure that Motherson thrives in that country as well. So, we are very aligned to their ambitions as well. Wherever they want to go in the world, we already have a footprint and we already are supplying to most of them in China. We supplied to seven out of the top ten new electric vehicle manufacturers over there and wherever they go in the world, Of course, we can use those relationships and deepen our penetration with these car makers as well.
On the path to 108 billion target and tier 0.5 ambitions - is there enough room to grow in automotive?
There is still significant amounts of headroom for growth in different geographies, different customers, different product lines to hit quite a big number in that 108 target and dent it just with the growth in the automotive itself. We have an extremely strong pipeline of mergers and acquisitions that will significantly allow us to reach very, very close to that number of 108. Just one big acquisition can be completely turning point for Motherson. Since the start, we have progressively worked our way up the value chain from being tier 3, tier 2, tier 1, and now, tier 0 5. Envisage that in this next five-year plan we will get an opportunity to assemble a full car for our customers, for an OEM, and that is our ambition. Let's be clear, we're not coming up with that. Motherson car just we're not going to compete with our customers we will do it for our customers. If the EV revolution is going to happen, more and more car makers will not want to do assembly.
On acquisitions framework and M&A discipline - how do you ensure all 23 acquisitions fit Motherson philosophy?
If you look at the 23 acquisitions that we have done and of course the 47 or 48 now that was just recently announced acquisitions that we have done, we obviously have to have a very, very strong M&A network and framework in Motherson itself. We have our own team regionally and globally sitting and making sure that all the acquisitions that we are doing fit into Motherson's philosophy. There is not one acquisition that, you know, misses one of these points because of our strenuous activities that we do before the acquisition and making sure that one it fits with the Motherson philosophy. One more thing, Motherson does not buy and sell companies. We buy, we invest, we grow companies. Till date, we have not sold one company from our fold.
On strategy - what is Motherson's strategy and how do you decide where to invest?
Motherson does not wake up in the morning and say, OK, let's go attack this company today, that company today. We wait for the customers to tell us, Motherson, you did a great job in the wire harness, in aerospace, in X, Y, Z. Now I want you to help me find a solution for this problem of mine. And that's what we do. We listen to our customers, we find out where their problems are, and we go in the direction where they want us to go. If you ask me today, what is Motherson's strategy? Motherson does not have a strategy. Our strategy is to follow our customer's strategy and make them successful. We are a B2B company. If our customers are successful, we are successful.