Ador Welding Ltd

Some more checks with Ex industry guy (senior industry management level guy, retired 7 years ago).**

Since he retired, some points maybe outdated. However I have tried penning down the conversation as is. Good insights on overall industry, competition, various products. Some points are basic.

Welding is joining of metals.

Size of this market : Welding industry has welding products (some commodity type).

Total market size usually 80:20 ratio in favor of consumables.

Industry will grow 5-7%.

Companies growth related to growth of industry.

It has unorganized and organized.

Welding with electrodes mostly in unorganized. So many names like Orange, Royal arc, Best Arc etc. Managalam electrodes is there.

MNCs include : ESAB, Lincoln, Bohler, Hyundai. Hyundai product which is being sold is best int the world. Manufactures in South Korea. Nobody could match Hyundai even Lincoln.

Electrodes : layman language : Rod with a masala.

Metallurgical part is important here.

Continuous consumables : Mig wire.

Then flux core wire. It is not a success story in India. China makes a lot of Flux. (This data is old, now players like Ador have started as indicated in above writeup)

Equipment : lowest is called transformer, rectifier and so on.

Grill : use lowest level of transformer/rectifier.

SubArc welding : used in pipe manufacturing, Gas pipes in welspun.

Customers : big fabricators like LT, petroleum industry, Pipe manufacturers (Lincoln dominates this market).

Welding productivity measured in the minutes welding taking place. This is the differentiator organized players products.

ESAB :

ESAB India. Followed a method of acquisition and growth (e.g. welding division of Phillips ). Global Group was a Swedish venture, pioneers in welding industry. It was bought by UK then to American company. Company has factories in Chennai, Nagpur, Kolkata. LT welding division was sold to ESAB.

LT had peculiarity in repairs and maintenance electrodes, margin was 60% in that business, total monopoly. Whether ESAB is able to do, need to check. Why sold? Got more in major equipments of the nation, this was becoming too small to focus (important point since industry size will not entice any large player in the industry and could be concentrated in the hands of top 4/5 large players).

Lincoln is also there, but technical expertise was lacking in repairs and Maintenance.

Ador is a good company. Ador is a family controlled company. They tried to get people like Bhatt, it didn’t work but now, entire management has changed and person who is now running is family guy. He was running chronojig unit for someone else.

Adani Orlikon (Swiss). The person who started it was Mirchandani. This JV happened in aircraft he brought Orlikon in India. Orlikon sold off to Lincoln Electric.

Aruna Adani couldn’t run much that is time, ESAB, Lincoln, Bohler.

They had seperate company Ador Fontech, did very well, margins 40% in equipment very difficult.

With merger : cut off management levels.

Aditya Makhani is very serious and aggressive. He is giving tough to ESAB.

DH Secheron Run by Maheshwari family. They are very credit and growth focussed. Secheron (Sweden) guys.

DH India : Indore running on one product which is copy of DH Secheron DH india cannot

Welding : Formulation is stolen in this industry. That is how unorganized has grown.

30-40% of top products is still imported. Area which is dominant is pipe welding electrodes. ESAB tried it failed Ador tried. This is Stick electrodes. When one is doing cross country pipe. Pipe manufacture (Gas) needs expertise (Ador does this but need to see how large they can become in this market).

Flux Code Wire : comes from China or US.

Flux core wire : difficult since making gets pores and welding fails. All Foreign companies can make it. Anything that is technology oriented is high margin.

Why to use Flux : for precision. Oxidization to not make metal porous.

We are always joining metals. The flux has to have compatibility with material.

SubArc welding (copper wire) : Ador does it but lower grades. Used in saw pipes.

Supreme technology for pipe making. Alternative Electrodes, flux.

Flux manufacturer : ESAB and Ador can do it (as discussed it was a thing of past, Ador already does Flux). Lincoln India doesn’t have facility. Investment is high. Flux big process and technology intensive.

Flux wire big market. DH India and Schereon cant do it.

Kirbi in Hyderabad, they were doing pre fabricated factories. Flux used here, within 1 week factory setup. They needed precision sheets, everything needs to be welded.

Industry trend : Normal welding electrodes replaced by continuous wires (Mic wires). Everyone is there.

Fabrication, pipe welding, shipping, ISRO areas of demand.

GEE : originally handled by some other person, sold to Agarwal.

DH India : marketing not able to crack. Marketing is weak.

Flux core wire : no idea about investment but could be 4x of mic wire investment (only machinery cost).

Thanks