Sika India Private Limited - IBEF

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SIKA INDIA

PRIVATE LIMITED

the commercial side they reduce the vulnerability to economic cycles because they depend on different markets.The technological affinities between the two divisions permit economies of scale in the areas of R&D, purchasing and production.

• Construction Division: Sika's product lines include high-grade concrete admixtures, specialty mortars, sealants and adhesives, damping and reinforcing materials, structural strengthening systems, industrial flooring and sealing films, available throughout a world-wide network of more than 100,000 distributors. Its customer group mainly comprises of concrete producers, contractors and wholesale and retail distributors.

• Industry Division: Sika systems replace dated technologies like screws, rivets and welds and Sika is a leader in the business of processing

materials used in sealing, bonding, damping, reinforcing and protecting load-bearing structures, with a market presence across 70 countries world-wide

Global Overview of Sika

Sika AG, located in Baar, Switzerland, was founded in 1910 by Kaspar Winkler and is involved in the business of specialty chemicals. It is a leader in processing materials used in sealing, bonding, damping, reinforcing and protecting load-bearing structures.The Sika story begins with a major feat of construction - the electrification of the St. Gotthard rail tunnel in Switzerland.When this project came in, Sika leveraged the opportunity to demonstrate its unique expertise by using a new type of mortar to stop water infiltration.

The contract marked a significant breakthrough for Sika, helping to establish its international reputation as a manufacturer of high-quality products.

In the field of specialty chemicals Sika is active in two business areas - the Construction Division (accounting for almost 75 per cent of sales) and the Industry Division (accounting for the remaining 25 per cent sales).While on the technical side these two business areas are closely linked, on

Company Mode of presence in India Year of entry Key business

Sika India 100 per cent subsidiary 1987 Specialty chemicals

Private Limited

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in Goa and Jaipur (Rajasthan) and two micro factories (predominantly blending units) located at Mumbai and Chennai. It enjoys the reputation of being the best-located company in the industry to cater to the demand for construction chemicals in any part of the country. Its annual production capacity at present is 28,200 metric tonnes for powder, 57,080 metric tonnes for liquid and 2,256 metric tonnes for epoxy. Besides India, Sika India has also been serving its customers in Bangladesh, Nepal, Bhutan, Sri Lanka and Maldives.

Sika has given several firsts to the construction industry in India.

• In 1989, Sika was the first company in India to introduce melamine-based superplasticiser in India.The Thane creek bridge (on the outskirts of Mumbai) is a testimony to this product.

• In 1993, Sika introduced the first moisture- insensitive epoxy in India, relevant for use provide customers with innovations for bonding,

sealing, damping and reinforcing.The products are used mainly in the automotive, aftermarket automotive, transportation, marine and

appliances and components industry.

Today Sika has production and marketing

subsidiaries in 70 countries worldwide and annual sales of US$ 2.2 billion and net income of US$ 117.8 million (for the year ending 2005).

It achieves 67 per cent of its sales from Europe and Africa, 21 per cent comes from the Americas and the rest from the Asia/Pacific region. Its 12,000 employees link customers directly to Sika and guarantee the success of all its business relationships.

Sika in India

The Sika Group started its activity in India in 1987 as a 100 per cent subsidiary, with a factory in Kalyani in West Bengal.Today it also has factories

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77 Construction Division:The company is a

leading supplier of construction chemicals in market segments like transport infrastructure, water, power, buildings, pre-cast factories, military installations, communication, mining and

distribution. Products of this division include concrete admixtures, mould/release/agents/curing compounds/surface retarders, mortar admixtures, cementitious grouts and anchoring, polymer modified cement mortars, epoxy adhesives and mortars, protective coatings and impregnations, primers, floor treatment and toppings and joint sealing compounds.

Industry Division:This division of Sika is a leading supplier of sealants and adhesive materials to users like automotive original equipment manufacturers (OEM), automotive aftermarket, transportation sector, marine industry, appliances and equipment and building components. Products and systems of this division include 1C-polyurethane, 2C- polyurethane, 1C-PUR hybrids, reactive hot melts, water and solvent based adhesives, 1C-epoxy hybrids, thermoplastic and rubber based sealants, structural reinforcement, toughened acrylates, butyl dispersions, 2C-polyurethane acoustical / structural foam and acoustical barriers.

In the recent years, Sika India has begun to focus on the retail business with special attention on the housing sector. Started on a small-scale in 1993, its home guard range of products (sealants, gap fillers, water proofing products, rubber emulsions, adhesives, anchoring materials, etc), cater to new construction as well as repair of old structures.

Some of its well-known brands in this segment include Sikacryl, Sikacim C, Sikacim M, Noleek Power, Sikagard 703W, Sika Boom N, Sika Cemflex, Sika Rustop, Sika Hibond, Sika Plastocrete Super, Sanisil, Sika Flex Construction, Sika Watersil L, Sika Watersil, Sika Raintite, Sika Latex Power, Sika Hydroplug, Sika Dampsil, Sika Damprof, Sika Tilofix / EX/F and Sika TiloGrout.

in concrete. It has been tested extensively and has got the approval of the Central Water and Power Research Station at Khadakvasla (Maharashtra). More than 100 tonnes of the material was used for underwater injection of the Hirakud Dam (in Orissa) to stabilise it against leakage. It was selected by the Central Water Commission for the repair of the hydraulic structure in Karnataka and Andhra Pradesh.

• In 1996, Sika introduced EpoCem, a Sika patent and a foolproof product that can be safely applied on concrete for floorings or for repair, even when the moisture content of the substrate is more than 4 per cent.

• In the same year, Sika India became the first company in India to get an ISO 9001 in its business segment.This certification is attributed to its excellent R&D set-up at Kalyani, which is also recognised by the Ministry of Science and Technology, Government of India.

• The company was the first one to introduce its structural strengthening system in India, comprising Carbodur system of using carbon fibre reinforced polymeric strips and fabrics for external reinforcing of RCC structures.

Sika has now introduced its polyurethane joint sealants in India named Sikaflex.

• Sika was also the first in creating segmental bridge adhesive (used in the Sirsi Circle Flyover at Bangalore), resin-based rock-bolting cartridge (used in the Nathpa Jahkri project for stabilising the tunnels) and moisture insensitive rail grout (used to fix the rails of the Metro Railway at Kolkata)

In India, Sika's operations are also broadly organised into two major divisions -

Construction Division and Industry Division.

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doubling of sales by 2010. For this the company will focus resolutely on its target markets, target customers and success factors. Special efforts will be made towards realising greater growth in large markets like India where penetration of its products is still low.

In India the company plans to pursue its goal of increasing penetration by intensifying its focus on promising segments, customers, products and applications as well as reinforcing key accounts and key project management.The company also plans to significantly increase investments and go in for selective acquisitions in the years to come, for which it is reorganising and restructuring itself appropriately.There are plans for setting up an additional state-of-the-art manufacturing plant, possibly in western India, along with two additional micro factories (blending units) near major market hubs.

Key Success Factors in India

For Sika, India is one of the most important strategic countries. Some of the key success drivers for the company in India are:

Widespread distribution reach

Sika India's philosophy of being near to the customer is demonstrated in its network of twelve own branches and over 100 dealers and applicators all over India. Even in the home guard range of products, the company has 200 distributors and more than 20,000 dealers across the country. Besides geographical expansion, the company's business has also expanded across the board in India in terms of customer groups.

Focus on quality and innovative products End customers of Sika appreciate the quality of its products and the innovative solutions that they provide. Sika develops solutions that make quality construction doable, while simultaneously optimising customers' processes and lowering costs.

Strong growth strategy in India

Sika India's strategy of focused growth stayed on course as it kept investing in needed production facilities, while focusing on optimum utilisation of its distribution capacities in the country.

Professional risk management is a significant component of the Sika management practices.

Risk management, risk awareness and internal control procedures are constantly improved to minimise risks. Sika also counts on the competence, motivation and dedication of its workforce, numbering more than 300 across the country.

Future Plans

Globally, as part of its “Strategy 2010”, Sika AG has planned an ambitious growth goal of a near

Sika's India operations

• Present in India as a 100 per cent subsidiary

• Factories in West Bengal, Goa and Rajasthan, with two micro factories (predominantly blending units) located at Mumbai and Chennai.

• Annual production capacity of 28,200 metric tonnes for powder, 57,080 metric tonnes for liquid and 2,256 metric tonnes for epoxy

• Sika India also serves customers in Bangladesh, Nepal, Bhutan, Sri Lanka and Maldives

• Operations are broadly organised into two major divisions - Construction Division and Industry Division; has also begun to focus on the retail business with special attention on the housing sector