The story of Rashmi Rare Earth Ltd (RREL) shows that innovation and entrepreneurship go hand in hand. One can build multi-crore businesses and conglomerates, but unless you don’t strive to reinvent and innovate, the probability of achieving something big seems rare.
RREL, an electronics manufacturing services (EMS) company, is a subsidiary of Kolkata-based business conglomerate Rashmi Group.
Started a year ago to manufacture the latest 5G electronic products, it has managed to accomplish a lot in just one year. The biggest milestone: bagging a contract from Reliance Jio to manufacture set-top boxes.
RREL’s manufacturing unit in Noida is the hub of all activities. Today, it claims to be competing with international electronics manufacturing giants such as Foxconn, Dixon, and Flextronics.
Sunil Patwari (43), CEO of RREL, is an obsessive believer in innovation. From steel and dredging, he has helped the company expand in other sectors like EMS and IoT.
SMBStory caught up with Sunil Patwari on what got him the deal, and his plans to bring more IoT products to India.
Edited excerpts from the interview:
SMBStory: How did you bag the deal from Reliance Jio?
Sunil Patwari: Reliance Jio group has its own contract manufacturing team. They got to know about our setup and visited our manufacturing unit in Noida. The team called us only after they were satisfied with the operations and facilities.
SMBS: According to you, what got the group interested?
SP: We are mainly focused on technology. Most of our competitors are 7-10 year old companies. They don’t have modern equipments for manufacturing, according to the demands we see today. Additionally, the equipment we use possesses high speed and productivity, and can cater to the demands of 5G. Apart from technology, we have been good at meeting deadlines and delivering.
SMBS: What are the impediments in the ecosystem you had to overcome as part of your daily operations?
SP: There is support from the Ministry of Electronics and Information Technology (MeitY), but their policies are a bit stringent, which creates delay in setting up factories. On one occasion, we lost around six to nine months because of a delay in getting approval.
Additionally, the Free Trade Agreement (FTA) with countries like Vietnam and Thailand has hampered the domestic manufacturing industry. A lot of imports come from Asian countries, especially China (around 80 percent), under the FTA agreement, which involves zero duty on customs.
Although we are happy with the recent move by government, which states that “importers claiming preferential rates of duty under any trade agreement will now have to declare that the goods qualify as originating goods and must possess sufficient information about their origin criteria, and regional value content”, we still feel that stringent anti-dumping or safeguard duties should be applied to the imports, which are having a serious effect on the domestic industry.
SMBS: What are your plans for the future?
SP: In India, the demand for Internet of Things (IoT) products is going up. Therefore, we will be launching our IoT division under the brand name eHome by March 2020. From doors to switches, everything will be IoT-enabled in this product offering.
We also want to make complete products in India and reduce foreign dependency for materials. We will soon venture into the painting, tooling, and moulding industry as well for this very reason.
Our upcoming project is to set up a specialised tool room for high-precision, plastic-injection moulding parts and a state-of-the-art painting solution, which can offer a wide range of products. The technology transfer agreement for setting up the moulding factory was signed in September 2019.