Industrial Economist (IE): Why is now the right time to invest in manufacturing in India?
K Balasubramaniam (KB): Globally, the centre of gravity for manufacturing is shifting. Investors want to de-risk. With India entering a new phase of industrial capability, it has naturally become a part of the equation. Our focus is on producing high-quality machine tools and components domestically. We want to produce all the critical components that go into our machines so that we have full control over both quality and scale. By setting up the assembly and foundry units at Oragadam, we ensure full control and the output will be fully consumed internally. This is not a tactical move. It is a philosophical one that we see as essential.
IE: Why are machine tools central to an economy like India?
KB: Every advanced economy is built on a strong machine tool industry. Germany pioneered it, Japan scaled it and China has largely mastered it. India, with its large domestic production and consumption base, has capable machine tool manufacturers known for strong price–performance value. But something that offers very good value may not meet every requirement. However, as India starts producing more sophisticated products such as electronics, EV components and medical devices, the need for ultra-precision increases. That is the gap we are addressing.
IE: Will localisation make your machines more affordable?
KB: Our value proposition is productivity, reliability and process capability. Process capability refers to the ability to produce large volumes while consistently maintaining tight tolerances. Our machines use less floor space while delivering higher output and our machines are probably among the most expensive. Customers may initially hesitate due to the price, but once they use our machines, they understand the value.
IE: How does Tsugami’s pricing, capacity and expansion plans look like?
KB: Our machines are positioned across a wide spectrum. A relatively simple machine typically starts in the range of Rs 25–30 lakh, while high-precision machines can go up to Rs 2–3 crore per unit. At present, we manufacture around 130 machines a month. With the ongoing expansion, we expect this capacity to increase to about 350–400 machines per month over the next two years. In terms of financials, the company recorded revenue of Rs 270 crore last year and we expect revenue to rise to around Rs 400 crore in the coming fiscal year.