Bosch, Klenzaids JV marks coming together of German quality systems and Indian value engineering

20151215ep31

After the contract signing in 2014 (from left): Andreas Mattern, Project Manager – post merger integration of Klenzaids, Matthias Müller, Senior Vice President Engineering, Bosch Packaging Technology, Hamish C Shahani, Managing Director, Klenzaids, Hariharsubramanian Krishnamurthy, Director Finance, Klenzaids

The joint venture between Bosch Packaging Technology and Klenzaids Contamination Controls, where the former will acquire a 49 per cent share in the latter, will complete a year this December. Viveka Roychowdhury gets an update on the integration process and a sense of the rationale behind the JV from Dr Andreas Mattern, Project manager – post merger integration of Klenzaids and Hamish Shahani, Managing Director, Klenzaids

Bosch already has a presence in India, so what was the rationale for the JV?

Speed was an important criterion for the joint venture. The Indian pharmaceutical market is growing at a very fast pace. The portfolios of Bosch and Klenzaids complement each other ideally. This enables us to service customers’ needs for cost-effective filling lines from a single source. By combining Klenzaid’s strengths in cleanroom equipment, peripherals and sterilising tunnels with Bosch’s innovative filling technology – such as the FLC 3005 vial filler series, which was developed in India — we are able to cater to the requirements of this so-called emerging market.

On a larger scale, we see high potential for joint projects and opportunities in further emerging markets, which goes well with our focus on Africa as a further growth market. Both Klenzaids and Bosch already have good references here. By strengthening our offer for cleanroom equipment, turnkey solutions and containment options, the joint venture will bring us a number of interesting new opportunities.

While the Bosch plant in Verna, Goa will continue to mainly focus on the confectionery and food equipment, Klenzaids brings another important asset into the joint venture, they already have a manufacturing set-up and a supply chain, which is tailored to the requirements of the pharma industry.

One year after the JV was announced, what is the progress on the integration front? What were the learnings from integrating a family-driven Indian company into the Bosch group?

20151215ep32

Dr Andreas Mattern

We are extremely happy with the progress. The teams are connecting well, as they are driven by similar company cultures that emphasise a ‘customer first’ and quality mindset.

Bosch associates value the depth of knowledge and experience of their new Indian counterparts and the quality of the equipment they produce. This has generated trust and a lot of interest for joint projects, which is essential for the fast integration. On the other side, the Klenzaids colleagues also see the benefits of building a more scalable organisation, which is on the fast track to turning from a regional champion with some international outreach to a truly global player.

First successes prove that this is the reality, and not just theoretical planning. The first filling lines with licensed Bosch technology have been sold, and customer feedback on the partnership has been very positive. They see that we are now able to provide them the ‘best of both worlds.’

What is essential for a good integration? From our point of view it’s fast decisions, an open and honest communication, as well as being open for change on both sides. Bosch and Klenzaids had already worked together on joint projects in the past, so we knew each other quite well. This meant that from day one, we started with a common idea, and a high amount of mutual trust.

Is Bosch looking at other JVs in India? If so, at what kind of companies, services, products would be added to the Bosch Group? Any timeline to these fresh JVs?

Our current set-up perfectly matches our business needs and we are not actively looking for other partners in India. Of course, Bosch is always open to interesting opportunities.

What would you list as the top cleanroom challenges facing the industry. What are the current trends in India (from a machine manufacturer’s perspective) and how is the JV best positioned to meet these challenges and fulfill customer expectations?

One of the main challenges is to improve pharma quality standards and the accessibility of medicines for the general public at the same time. This is not only a challenge for the pharma industry but for the politics and the entire society, with numerous initiatives under way. With the joint venture, we have decades of global experience and offer high quality and safety features to India, while keeping the equipment on an affordable level for an emerging health system.

As far as projects and their timelines are concerned, it is not only about time to market. It is also about ‘time to money.’ By combining our turnkey project experience, the local service team can significantly speed up overall projects from equipment delivery through to full installation and validation cycles.

Klenzaids already has a good legacy in India, and to global clients. What then is the rationale for the JV?

20151215ep33

Hamish Shahani

We wanted to create a true centre of competence in the region for a comprehensive one-stop-solution to remain ahead of competition. In my view, Klenzaids should be positioned as a strong player in the international regulatory compliant market place. And the joint venture with Bosch would fast-track this goal. We also add value to the current Bosch portfolio with existing Klenzaids products going hand in hand and create unparalleled bandwidth in the scope of possible supplies which is unique in the market to our mind.

What are the ‘cultural changes’ necessary over the past one year? Given these learnings, what would be your advice to other Indian promoters looking at such JVs?

Bosch is arguably one of the most professional and ethnically managed companies in the world. At the same time, Klenzaids has always been professionally managed as a family-owned company. This has made operations smooth and seamless. Nevertheless, it’s very interesting to see the coming together of German quality systems and Indian value engineering. Culturally, one has to move to the means and methods that will ensure higher quality assurance. My advice to Indian promoters would be to take time and chose their partners and positions well. They should focus on becoming completely professional about every single aspect of the business and its execution.

Would there be a rise in prices of the equipment post the JV? Given that India is a price sensitive market, what is the strategy to sell given these constraints?

We are not seeking price increases. Of course, depending on requirements, we offer various solutions at different prices. Additionally, Klenzaids is now moving into high-volume production in a conscious attempt to rationalise costs. The strategy has evolved based on existing and trending market realities and is fully cognizant of client needs and imperatives.

What would you list as the top three cleanroom challenges facing the industry. What are the current trends in India (from a machine manufacturer’s perspective) and how is the JV best positioned to meet these challenges and fulfill customer expectations?

I would rank the top three challenges like this: First, the increasing reliance on cRABS and isolator technology as the primary barrier, relegating the cleanroom into a true ‘background.’ Second, Manufacturing Execution System (MES), other initiatives such as industry 4.0, and the like, which promise to change many things as we currently know them – including intelligent buildings. Third, ‘overall safety’ not just regarding the prefab suites themselves but every aspect and attribute of the system. I believe we have a lot to do to ensure compliance with the global standards. The joint venture is sensitive to these industry initiatives and is truly placing their best engineering talents to pursue this course.

viveka.r@expressindia.com