VAICO Focusing on Tool Design and Development
A cutting tool brand chiefly dealing with indexable tool holding solutions, VAICO has become a name to reckon with in the sector. With a wide product range that includes tools for a multitude of applications including turning, milling, grooving, threading, boring, drilling and parting VAICO is also does critical custom built tools for a select few customers.
As a novice in the sector a decade back, what has been the turning point for the company?
It is, without any doubt, the product itself. The secret to our success has always been our focus on ‘Tool Design and Development’. Any young cutting tool company that enters the industry should be mindful of this. At the end of all marketing gimmicks and negotiations it is always the product that has to deliver. Cutting tools are something that show up in the expense column of the customer and it is imperative that the customer gets the proverbial bang for his or her buck. Not only should the tool have a high performance, but its performance should also be predictable; time and time again. The user should be able to rely on the tool he just bought and should be able to trust the product to work the way it promised.
There may have been numerous key achievements in Vaico’s kitty, what has been the greatest achievement of them all?
Ah! We, at VAICO, have very different definitions for words like achievements and success. Though we’ve been recognised on numerous occasions for the work that we’ve done, I strongly believe that our true recognition lies in the clients we have. Apart from the VAICO product that goes to end-users, we work with a lot of global cutting tool behemoths and that on its own is testament to what we’ve achieved as a group.
Do you feel India has the potential to challenge international players in the tools industry?
Of course! India has immense potential for everything. Even though the Indian cutting tool industry is not so big in terms of number of manufacturers, I still feel that there are a select few companies like ours that are pushing the limits and challenging their global colleagues every day. Any competitor, no matter how big or small, will always pose a challenge. That being said, Indian Tool makers are able to perform well on home turf here in India but still have a long way to go before they make a dent in the global scheme of things. The corporate mind-set is only just now beginning to set in to the Indian small to medium industry and in the coming few years you will be seeing a lot more participation in shows like the IMTS from Indian companies.
With over a decade of existence, what were the initial challenges for the company?
For any 1st generation manufacturing company, there is always a learning curve that you have to go through before you can really come to terms with the size of the task at hand. Apart from that when we were starting out, we were absolutely boot strapped. Cash flows would run negative every so often and we were only thinking in terms of one order at a time. On top of all of this, finding and retaining talent was a pain. Until, finally you start getting one thing right after another. Don’t get me wrong, they were probably the best days of my life but the climb out of the initial ditch is always a slow one, especially because straight out of college my first job was of Partner at HMB.
Tell us something about company’s expansion plans in the near future?
We are a family held and funded company, sitting on zero debt and we see expansion in terms of 3 verticals – infrastructure, our sales network and our product catalogue. Our plan for the next few years is to focus on all three of these, out of which ‘Sales Network’ as of now takes precedent for us. Apart from our sales network in India, we are currently doing business in six countries including Germany, Spain, Russia, Thailand, UAE and South Korea. With IMTS we plan to add USA, Canada and hopefully some of Latin America as well to this list. We will also be looking to open up our offices in some of these locations within the next couple of years to ensure growth. The plan is to have in excess of 200 dealers and distributors within our global network by 2021.
And what about expanding your product catalogue?
Our Product Catalogue, in such a short span of time is already up to about 4500 sku’s within 6 sub categories and we plan to add at least 3 new products every year. This automatically creates our plan for infrastructural investment, growing sales and increased ‘NPD’. So yes, there is quite a bit of expansion planned in the near future and quite a few new markets that we will be entering during this phase. Very soon end users in our target markets will get to experience the VAICO product first hand.
Is there any pressure of growing competition in the market?
It’s the other way round. We are the growing competition in the market. I feel that we are at a stage in our journey where we are growing aggressively in all directions and it is our competitors or rather our fellow tool makers that are taking notice of the work that we do. We obviously do compete with them but the cutting tool industry is so tightly knit that we also work in cooperation with a lot of them.
What are the major factors that make VAICO a tough player to challenge the competition?
We have a lot of factors built in to our business model and product that combine to form our USP and why customers prefer us over their previous choice. First and the foremost, our production facility is in India, which, as we know, is termed as an LCC or ‘Low Cost Country’ for manufacturing engineered items. This is a big advantage that lets us keep a check on our costs.
Moreover, how we use this to our advantage is that we make an even higher quality product at the costs the other companies make theirs. So we’ve chosen to give our clients a higher standard of product at the same cost rather than a mid-standard product at a lower cost.
We strongly believe that discounting is NOT a strategy. Our supply chain is global and we source everything we need from highly reliable and experienced vendors. We are technically inclined to the point where even our raw material is produced on our specifications especially for us. Now though these might not sound as innovative practices to large corporations, I know for a fact that nobody is doing this successfully at the level at which we compete. What’s even more exciting than all of this is that the world today is ready for an organised company, from countries like India and China, to step up to the plate and offer a complete cutting tool’s solution. I feel it’s that time, when you will see a lot of investments, joint ventures, technology exchange deals and acquisitions happen in the Indian cutting tools industry.
West Building, Level3-Tooling & Working Systems Booth – 431348
Location – McCormick Place, Chicago, IL, USA