Setco manufactures and markets proprietary LIPE clutch solutions for the medium and heavy commercial vehicles worldwide. LIPE has emerged to be an undisputed leader with an imposing market share.
Today, SETCO is one of the five largest manufacturers of clutches for Medium and Heavy commercial vehicles in the world. Its diversified portfolio includes non automotive areas such as Hydraulics for off-highway construction equipment and marine products through its overseas subsidiaries.
In the last five years or so, Sheth has been driving Setco in the top gear clocking excellent growth figures. For example, in 2009-10, Setco crossed the Rs.200 crore turnover mark, while in 2010-11, it crossed the Rs.300 crore turnover mark. And in 2011-12, Setco crossed the Rs. 400 crore turnover mark.
"In fact, 2011-12 was the best year for us in terms of year on year growth. Of course, we cannot reach the same volumes again before 2016-17 due to market conditions but we are confident of growing in a healthy manner. Last year, we clocked about Rs460 crore (growing at 39 percent) and we are looking at touching the Rs1000 crore mark in the next few years," Sheth explains.
A key strategy behind Setco's robust growth also has been the timely diversification in different market segments. "In 2011-12, we decided to diversify in the LCV segment as well as the independent aftermarket segment. Earlier we did sell in the aftermarket through the OEMs but going directly has certainly helped us."
Setco is looking to add the tractor segment by next year. In the meanwhile it has also ventured into the castings sector by starting a joint venture called Lava Cast. "We will soon be starting trial production at Lava Cast. About 36 percent of its production will consumed for in-house demand while the rest will be sold in the market," Sheth says confidently.
The reason for this confidence? "There is a shortage of good quality castings in India, US and Europe. In fact, all our current customers want good quality castings. Of course, it will take some time but eventually it will happen," he says.
Sheth foresees good growth for the Indian auto components industry both in the domestic as well as exports markets. He agrees that the Indian auto components sector is now a global phenomenon but believes that the Indian industry's strength primarily comes from the manufacturing side.
"We (Indian companies) may not have much of chance in some areas like electronics and safety but as far as manufacturing is concerned - particularly in terms of forgings and castings - we are as good as anybody else in the world," he says.
Last year, exports contributed almost nine percent to Setco's sales and Sheth is looking at taking this figure to a healthy 15 percent over a period of two to three years on a growth model.
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