A journey which began in 1968, when aluminium was relatively unknown in India, to 2021, when the company- India’s largest aluminium extrusion company is on the threshold of adopting digital solutions across all its business functions – Pragun Jindal Khaitan, Vice-Chairman and Managing Director, Jindal Aluminium Limited, takes us through the story of Jindal Aluminium – a story which is rooted in building upon a rich heritage whilst embracing the new and the sustainable.
Jindal Aluminium is a family-run business with a rich heritage. Please tell us about the company’s roots and background and how Dr. Sitaram Jindal sowed the first seed of Jindal Aluminium
My grandfather, Dr Sitaram Jindal, is the fourth of five brothers who jointly set up an industrial empire unparalleled in modern India. While studying at Kolkata (then Calcutta) University, he worked with his brothers towards setting up a steel pipe factory. After establishing the factory in Kolkata, he and his brother set up a giant steel pipe factory (Jindal India Ltd) in Hissar, Haryana. Back then, this was one of the first companies to manufacture steel pipes and tubes on a large scale in India. Since the initial period, the company played a vital role in the green revolution by manufacturing and supplying larger diameter steel pipes for use in the sinking of tube wells needed for irrigating in Punjab, Haryana, Himachal Pradesh, and Rajasthan. It was the time of an acute shortage of food grains in India.
Post this success, he envisioned a future beyond steel and wanted to do something that could lay the foundation for another vital industry fuelling growth, and the foundation of now 'Jindal Aluminium Limited' was laid in 1968 (It is to be noted, the company was incorporated in 1970). Aluminium was relatively a new metal at that time.
Currently, we have a production capacity of 1.75 lakh metric tonnes, meeting 25-30 percent of the aluminium extruded and 10-12 per cent of India's aluminium flat-rolled products.
Jindal Aluminium is going digital across its business functions. Please describe the initiatives and approaches being taken to achieve digitalization.
We have recently introduced SAP technology. It will allow us to leverage digital solutions in our business strategy. Over the next several months, the company will witness a leadership-driven initiative paving the way to implement a digital ecosystem across our business functions. In the past, Jindal Aluminium has launched an order management system for dealers. The idea is to make sure that we optimize all our operations using available technologies. As I mentioned earlier, we have scaled people up the value chain, invested in them, and using the company's legacy knowledge base and latest technology to create a distinct advantage. These steps ensure that we usher in market growth and position us well to benefit from it.
Please tell us in detail about the SAP enabled technological systems being implemented across the organisation, the key points and changes it will bring about
We are implementing an enterprise resource planning architecture covering the Presentation, Application, and Database layer. The step is a part of the digital ecosystem that we want to build around the business. It is being done across the entire organization using the SAP ERP solution S/4HANA. This enterprise solution adds value to digitalization simplifying the IT landscape and allowing real-time insights through in-memory data processing.
We have set multiple benchmarks over these decades. Implementing an integrated IT system is a part of the business technology roadmap to smoothen, simplify and improve the integration of people, process, and technology. It will help us bring most of the company’s operations into one IT system, ensuring more effortless information flow between individuals and departments, ultimately leading to swift and efficient process and business decisions.
Please tell us about the impetus behind choosing to go digital
Connectivity, intelligence, and flexible automation are the way forward for manufacturing in the digital world. We only see this scope expanding from here. It will change the way products are manufactured, distributed, serviced, and refined. While we want to embrace this change, the idea behind choosing to go digital is extending our experience of over five decades to the benefit of everyone involved in our business ecosystem - People, Planet and Community. It will advance our working environment to delivering optimum value to our customers.
Kindly tell us in detail about UDAY - your order management system
Investing in establishing a robust distribution network and providing better value and earnings to our dealers is one of the core decisions that went into Jindal Aluminium’s making. UDAY – rise with aluminium is taking this belief forward. It is a dealer's order management system built by our team. We have rolled out some of its functionalities among our dealers, but the system will be a vital part of dealer management when fully deployed. It will act as a robust tool to place, manage and track orders, facilitate shipping and fulfilment, encompass reverse logistics into inventory management, forecasting and inventory planning, as well as business reporting and intelligence.
Briefly tell us about Aluminium, its versatility, and its use in vital sectors such as automotive and aerospace
Aluminium is a highly versatile metal. Meaning it can be processed to be thin, lightweight, bendable, non-corrosive, and non-reactive yet providing exceptional tensile strength. All these features make it a much sought-after metal in various industries.
For example, the automobile sector finds it attractive because every kilogram of Aluminium used in a car brings down the vehicle's overall weight by one (1) kilogram. Now aluminium is the second most used material in the auto industry, next to steel. There was a significant weight loss in aircraft manufacturing on account of using Aluminium alloys. The Boeing 737, famous narrow-body aircraft, comprises 80 per cent aluminium alloys in its making. Its lighter but strong and high corrosion resistance functionality makes it ideal for application in aerospace.
Aluminium alloys make for being the perfect material for defence applications in ammunition, missiles, rockets and rocket launchers, military bridges or airdrop platforms, cartridge cases, and military aircraft. It is the perfect metal to meet even the most complex and stringent requirements. Over the next five years, India has set a target of ₹1.75 lakh crore worth of domestic defence manufacturing, including ₹35,000 crores worth of military hardware for exports. Aluminium extruded and rolled products have a very significant role in making this possible.
At Jindal Aluminium, we are committed to meeting various sector’s requirements through innovation and excellence in manufacturing using the best of technology and talent. We see a rise in business from automotive, aerospace, and defence.
Aluminium is regarded as a critical element in sustainable manufacturing. Could you describe for us why this is so?
Indeed, aluminium-in-use is the most circular and low carbon material. It offers 100% recyclability - reusing the material again into the production cycle without any quality degradation. Today an unbelievable seventy-five (75 per cent) percent of all aluminium ever produced is still in use.
Many sectors are now reducing their carbon footprint through the usage of aluminium over plastic and other metals. As we rebuild, we must adopt sustainable practices to ensure a green recovery from COVID-19 and also tackling climate change. Aluminium-in-use advantage is that it takes just five (5 per cent) percent of the energy required in recycling than producing primary Aluminium from Bauxite, reducing energy usage by ninety-five (95 ) percent and significantly the CO2 (Carbon dioxide) emission. That makes it an essential element and scores over other metals in a circular and low carbon economy. With the projected eight (8%) percent growth, India should be among the countries with a low carbon economy through aluminium in the next eight to ten years.
How does it feel to be at the helm of such a legacy and what is the way forward?
The legacy is truly remarkable. The values that we have built over these decades are my most significant assets. I feel fortunate that the transition was natural, given that I got the opportunity to work with my grandfather, Dr. Sitaram Jindal, who has prepared me for this role. Since I joined the company in 2013 and even before, he has been a torchbearer for me on this journey. I have tremendous gratitude towards my grandfather for the way he has built the company and how he has guided me. The solid foundation laid by him gives me a lot of confidence to make sure we are only growing it from here.
What I value most of all is that Jindal Aluminium takes a holistic view of society at large and has a strong understanding of what role we play in it. From day one, our focus has always been on making sure Jindal Aluminium has a positive impact on society; we are committed to society's upliftment. It's an intrinsic value of the business we haven't been vocal about. We consider People, Planet and Community as a part of our business ecosystem; being responsible for them comes naturally. This culture's spirit built over these decades is manifested in our attitudes and aspirations in the form of consistent ethical and moral practices. There cannot be a better way of growing a business than respecting and valuing broader social and environmental issues. It is something we are proud of having, as a way of how we do business.
It has been a long journey with multiple path-breaking decisions determining the growth of the company today. But if I have to put this across as a part of the foundation of the legacy, I would say the decision to stick to quality even though it was not demanded (by customers or industry) has set the tone for the industry and a benchmark for our products. We have customers to whom we have been supplying for decades. The cost-optimization-focused business approach has built a fiscal discipline culture, driving spending and cost reduction while maximizing customer value. It has helped us maintain profitability and, thus, low leverage. It was a challenge to establish a robust distribution network during those times, but it was a bold decision that proved to be wise to build and invest in a unique distribution network. It now forms the backbone of our sales. It kept our focus on core competencies and, at the same time, gave us access to a broader market. Leveraging our distribution network to grow sales was only possible by providing better value and earnings for our dealers, and hence this network has continued for decades. All this would not have been possible without the support of our employees. We have been investing in our people from the very beginning. It has helped us elevate team members up the value chain and provide the necessary support for the company's ecosystem to function efficiently.
You joined the company in 2013; tell us about your journey with the company – it's secret behind threefold growth from 2013 to 2020, and your biggest motivation in this journey.
I joined Jindal Aluminium as a whole-time Director in the year 2013. Yes, the company's revenue has multiplied three times since then, but it's a collective effort of many people, including our employees, customers, and suppliers.
In my journey spanning eight years, the potential of growth for the Company given the work put in over the past five decades by my colleagues – both past and present are among my biggest motivators. However, it will be incomplete without mentioning Dr. Sitaram Jindal - my grandfather, and our Chairman and Managing Director. His visionary outlook and business acumen are honestly why the company is as strong as it is today.
There's no secret; in the end, it's the happy employees leading to more delighted clients. For Jindal Aluminium, the most significant point of focus has been the customer. We have put in a lot of time and energy in understanding what the customer wants from our products. This understanding helps us cater to their exact requirements. We listen to our customers keenly and support our employees with the best resources, facilities, and technologies.
So, producing only quality-focused products, following a fiscally disciplined approach, providing value to our dealers, and building an extended family of employees are the core decisions that have shaped the company that it is right now.