TFL Quinn India invest in the future

Up until 2003, TFL supplied the Indian market through a sales agent. Now, however, they decided it was time for TFL to strengthen their position in this promising market with the acquisition of the Indian finishing specialist Quinn and merge them with the overall TFL know-how and infrastructure.   Quinn were located in Hyderabad and TFL decided to take full advantage of their well developed site and favourable local climate. In 2004, when TFL Quinn India was created Hyderabad became the headquarters. The complex of offices, laboratories and production facilities provide their central production location to cover the requirements of customers in South Asia and the Far East.   There is a second production site at Patancheru and in order to be closer to their customers the company are investing in applications centres at a number of other sites: the former corporate office in Chennai is now a branch office which will be expanded by the provision of an application centre. Another branch office, at Kolkata will also get its own application centre and the branch at Kanpur, which already has an application centre, is being expanded.   There are also branch offices at Delhi, Jallandar and Ambur, with an office and applications centre at Ranipet and this year Vaniambadi is scheduled for setting-up offices and an application centre.   2003   TFL acquires the Indian finishing specialist Quinn in Hyderabad   2004   Creation of TFL Quinn India   2006   TFL Quinn India starts R&D activities and production of finishing polymers in upgraded facilities in Hyderabad   This complies with TFL's vision to be the preferred supplier to the leather industry on a global basis, creating value for their customers with superior systems and service. Through their strong presence and the outstanding know-how in leather technology, TFL Quinn India guarantee tailor-made service and quick deliveries for their products and systems to all customers in the South Asian countries India, Pakistan, Bangladesh, Sri Lanka and Nepal.   A lot of work has gone on at the site to upgrade it to the highest possible standards. When they set about refurbishing their applications laboratory they wanted it to be the biggest and the best. They claim that they can now do everything in-house. As a sign of their success they are shipping three containers/month (30-35 tons) of pu and acrylics to Italy and have a flourishing business with China.   The two manufacturing facilities of TFL Quinn India are located at Bachupally and Patancheru - suburbs of Hyderabad - and are capable of producing 40,000 tons/year, 25,000 tons of which are sold to the local market.   Building on the strength in the finishing sector which had been built up by Quinn, TFL Quinn India claim to be leaders in finishes in India and third in wet-end processing products. They are now focusing on the wet-end in order to catch up with the companies ahead of them in the field.   By the end of last year they had finalised their locally made ranges using domestic raw materials. It took them a couple of years hard work but now they believe their products are as good as any. Now they are ready to offer new Indian made products to the international market. They also look into modifying global products for the Indian market and carry out basic research for the TFL Group.   Research and development are a key factor in their strength and they are researching a number of possible new products. Their challenge is to produce a global product with an Indian cost.   They offer support to the tanners using international standards and are establishing satellite laboratories around the country to be near their customers. They believe that services are a crucial way in which to combat those countries who are dumping their products on the market. With so much surplus production being offloaded by overseas countries, one way of competing is to actually compete with the very products which are being sold at marginal prices.   According to TFL Quinn India, finished leather production in India fell by 7.5% last year but picked up in the last quarter and rallied at -5%. Overall, 2005 was a terrible year making 2006 much better and TFL Quinn India grew by 10%.   TFL Quinn India is an autonomous company, wholly owned by TFL Ledertechnik GmbH and managed by a board of directors. Three nominees of TFL Ledertechnik, the chairman and the managing director constitute the board. They meet at least once a quarter. The chairman of TFL Quinn represents the company on the executive board of TFL Ledertechnik.   Day-to-day management rests with the chairman and a committee of management personnel designated by the chairman. At present this consists of all heads of departments. K Achyuthan took over as chairman of TFL Quinn in 2005 and successfully turned the company around, with growth and profitability. T D Prasad is managing director and CFO.   C R Mohan has been with TFL since 1997 and is head of finishing. He has been very successful in increasing the company's finishing business in India and from January 2007 has also taken on additional responsibility as head of wet-end activities.   Sateesh Damle has held various position with TFL since 2000, most significant being head of wet-end where he achieved a growth in wet-end sales. Stepping down at the end of last year, he has now taken over responsibility for product management (wet-end and finishing).   Pramil Saxena haas been working for TFL since 1997 and developed a substantial export business for dyes for TFL India. He was responsible for setting-up production and distribution facilities during the initial operative days of TFL in India. He has also made a major contribution to implementing professional management practices in production and supply chain management (SCM) of the post-merger organisation. He currently heads up technical operations and SCM.   J K Karthikeyan was with Clariant (India) Ltd for ten years as marketing manager having previously worked for the petrochemical industry. He has been responsible for marketing services and dealer management with TFL since February 2006.   In all 169 people are employed by TFL Quinn India which encompasses sales and technical service at Chennai, Ambur, Ranipet, Kanpur, Jallandhar, Delhi and Kolkatta, production at Hyderabad, and finance, commerce and administration at Hyderabad and the various branches.   One of the features at the Hyderabad site is a huge bonded warehouse which is 100% for export. The company achieved €7 million in exports in 2006. There were no exports when TFL took over the Quinn site. Exports consist of their own production plus dyestuffs which they do not make themselves but have made to their own specification and stored at their own warehouse in Mumbai.   At the time of Leather International's visit to Hyderabad, an identical building was being converted into a second bonded unit, doubling capacity. The two units are linked at one end by a wing containing the applications laboratory on one side and wet-end and finishing at the other.   They offer an exclusive and confidential service to their customers. Because there are no local tanneries, they need to work on full scale machinery up to full hides for upholstery. Customers can send in a team of their own technicians to work with TFL specialists.   By adapting standard CAD CAM technology, they are able to see how a finished product will look using a variety of leathers. The leather is first scanned in and then applied to various designs of finished products.   The applications laboratory also carries out R&D and applications work for the TFL international organisation. This makes sense as they have all the equipment and TFL can take advantage of India's recognised skills in routine work. TFL are also agents for 3M Scotchgard and TFL Quinn India test leathers to make sure that they meet the required standards.   Before they set up their own physical testing, work was contracted out to CLRI and others but with the relocation to Hyderabad it became too far to send out to Chennai whenever they wanted anything done. In January the laboratory was being kitted out with the necessary equipment.   Effluent treatment   Effluent liquid at the site is removed and all water is recycled. First the effluent is piped to a storage tank where the liquid is evaporated and condensed. The liquid is then used for boiler feed and gardening. No liquid effluent is discharged.   Only 2% of the waste is solid and they have an agreement with the State Pollution Control Board for landfill. Each month a truck takes 10 tons of waste to a fill site 60-70km away.   A new building has been constructed in order to centralise all utilities such as water, chilling plant, boiler and steam. The current boiler house was destined for conversion to an engineering workshop. Maintenance is a very important part of business due to the nature of chemicals.   An empty building on site was earmarked for a blending machine which was on order and expected in March. Beamhouse powders will be dry blended here. The machine is capable of processing 2,000kg/15 minutes which represents an hourly rate when you take loading/unloading and washing into account.   They produce syntans and fatliquors with a 3,000-25,000 litre capacity (25 tons of fatliquor in one batch). They also have a huge spray drier which produces syntans in dry powder form with automatic weighing and packaging.   Their warehouse capacity is 5,000 tons although it is more usual to have 1,000 tons in stock: 6-700 tons of raw materials and 300 tons of products. The products are already sold before they are produced.   The rationale behind buying Quinn in Hyderabad was twofold. Quinn had a good share of the finishes market and by taking over an existing production facility rather than setting up their own TFL saved a considerable amount of time (1-1.5 years). Also the infrastructure of the business was already in place.   Initially Hyderabad was offering real estate at bargain prices; however, this is no longer true as the city is expanding at a rapid rate as IT companies are attracted to the area. IT has been the biggest growth sector not just in Hyderabad but in India generally and investments in this sector have led to a considerable ongoing improvement in the roads. A six-lane highway is planned between Hyderabad and Mumbai, the hub of the chemicals industry.   Weather conditions are also conducive to chemical storage. A hot humid climate is not ideal for the majority of chemicals: fatliquors behave differently above 40°C and hygroscopic products such as powdered syntans become lumpy. In Hyderabad the temperature is generally between 30-32°C, only rising to 40°C and above for 6-8 weeks each year.   So despite being away from their customers and their raw materials suppliers, the advantages of an established infrastructure and a good market share in leather finishes made TFL Quinn India an appealing choice.