Ador Welding Ltd

Discussion with an Employee of Ador

Demand ?

Demand of welding electrodes is booming, robust demand one will see in Auto/Power/Defence. Defense one needs lot of certifications.

LT biggest supplier is us. We supply in all their divisions.

We have good order book but not able to fulfill and we get it contract manufactured also. Flux and wire we send and they process only.

Making in India giving lot of benefits in consumables and equipment.

Most of PSUs buy 70% of RM buy from Indian source. No guidelines, but nowadays e procurement and hence tender is not passed if 70% is not Indian sourced.

ESAB India has some specialized consumables and equipments which no one makes in India. Hence there ESAB enters or else we are seeing good demand.

In Equipments only Indian manufacture to manufacture in India rest all other players import. We manufacture in Pune.

We have ISI mark for all equipments

ISI mark for Chinese company is impossible. ISI mark, give manufacturer address. Why no one else takes ISI mark,? since they have to give manufacturer location, if they give then customers directly procure from there hence many dont take ISI mark.

We have ISI for 50 products, we will soon have it for 150 products

Added advantage from GOI in ISI mark.

Competition :

Competition : DH secheron is doing well. GEE sells very cheap and in low grade electrodes.

We will cross ESABs turnover soon.

We dont believe in breaking ESAB. We focus on our growth vs market potential (mkt share grow).

Hyundai struggling in own country due to small players (small players also have good quality)

Local competition ?

Say orange sells for 75 we sell for 90.

We buy electrode quality steel, orange uses “Killa banne wala steel”, then when u weld, it will be fumes around. Our electrodes, welder will not need mask also.

LT will not ask for 75 Rs product, welder will not use also, this is where approvals comes.

If you are registered with LT. If LT is giving contract, they name us buy specifically from us.

Defense equipment : specialized 3 welding electrodes companies, we need to take quotation from them only.

Flares business + Aditya sir ?

How Flares businesses turned profitable? It was after Aditya joined in. Aditya Malkhani : Turnover company increased due to him. We are increasing portfolio in special electrodes after Aditya sir. At one stage Ador fontech was also competing. Fontech is more in specialized electrodes, 35-40% margin. Some is 100% depends on how u play with nickel, chromium and mangnese powder. 250 crores is specialized electrodes in Ador. Ador fontech merger: cost savings, one management team.

Our forte was flares we were picking other products : pressure vessels, heat exchangers that is with LT, Vijay Tanks, Anup industries. We tried doing Clading . There is one specialized welding called as strip clading, entire heat exchanger used to be claded and not welded (nobody in india has that technology).

Flares no clading needed. What are Flares ? When refining crude into petrol/diesel, poisonous gases are emitted, knockout drums pulls moisture out of gas and it emits out of the chimney.

We used to called it PEB and now Flares and process equipments. Past contracts written off. We started this division and making profit since 1 year.

ONGc 145 crores making one of a kind Flare biggest project. Competitor Zico (MNC).

Competitive advantage?

Electrodes can be made in 100 sq feet area electrodes for Grills, trolly(6013 grade) we dont make that. We are not focussed there.

We are focussed in stainless steel electrodes. Formulae based product, better ur formulae cheaper ur product is and of better quality. We need very robust RD, continuously inventing new, changing RM setup, making it more cost effective.

Entire low cost welding, you can enter, but need formulae for high end welding. I take care of my RD guys We take care of key positions, dont let them go.

Thoughts on Chinese supply + Flux ?

At once import on our brand from China 600TPM now manufacture 150TPM. It is now in short supply and hence better margin.

Chinese Flux is out, need ISI mark.

Now many cant import but cant manufacture like us need formulae (very technical product)

Flux wire : Many cant manufacture and then use alternates when engineers suggest alternate but then not as cheap and easy to use.

Flux wire : if u compare MS electrodes with Flux, similar price wise.

End user focus ?

15-17% growth in general infra, refineries and mainly in railways. We are approved in railways, all approvals of Rites in place. Rites is very stringent and come and inspect every lot, strong demand in railways.

Price pass on?

We pass on in a month.

Capacities?

Capacities we have imported for Italy, Germany. Now we are atomizing all of that, we dont need lot of that, we can debottle neck for medium term. This industry is labor intensive.

Consolidation ?

Everyone in welding now has businesses so much work in India, small players have work no need for consolidation.

Exports?

We have own export division. Export is now focus area for us. Export market Ador sells on name, price is also are quite good vs Chinese + quality vs Chinese. When it goes to US, they cant give at similar quality.

We are competing with worlds largest Atlantic in Middle East they want us to manufacture for them they will sell in their name.

Some random disc:

We prefer to do businesses with dealers better receivables, dealer financing is also in lints. Credit Limits are set for dealers depends on their performance

Stainless steel no one can compete with us, Infact European players take SS from here Make electrodes and then export to India. Hence SS players have to pay duties on export to Europe.

We have hypertherm experience centre in pune and are sole selling agents for them.

Our biggest property in Chinchwad. One more division we manufacture Car dispensers, Oxygen and Gas regulators. We have one more dental aligners division.

We have expertise in sub arc welding which is for big oil pipes. Lincoln is global champion.

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