HITA Technology High Flights On Strong Wings

When Arun Ghosh graduated as an electronics engineer two decades ago, all he aimed for was a secure job in a reputed company. Little did he know that he would soon be heading a company Rs 12 crore company all on his own and that too in less than a decade.

Arun's first job was in Nelco's UPS division as the National Business Manager in 1995 which then metamorphosed into Liebert. On a trip to Liebert's UK facility, he felt that the company was "more of a glorified warehouse, rather than a manufacturer and HiTA was its OEM supplier."

But in mid-90s, the collaboration fell through and the Taiwanese supplier started scouting for someone who could set up and oversee HiTA's business in India and the SAARC region. By then, the entrepreneurial bug had bitten Arun as well, and since he fit the bill, he was appointed as the MD for HiTA Technologies in India in 2002. Today he is engaged in importing, adding value, marketing and maintaining the entire range of HiTA UPS systems in India, Bangladesh, Nepal, Bhutan, Myanmar and Sri Lanka and Pakistan.

He started the business first in the west and then the south, before targeting the eastern region, though he was based in Kolkata. Ask him why he did not first try to establish himself in his hometown and he answers simply, “The eastern market did not have the kind of potential that these regions had. So it made sense to build a good base in the west and the south and the consolidate our national presence by catering to the east as well.”

Kolkata is the company's HO, not just because Arun is based there, but because shipments from Taiwan can reach the city's port within 21 days. The same shipment would take over 40 days to reach the Mumbai port.

NICHE MARKETS ONLY, PLEASE

Right from the beginning, Arun consciously avoided the entry-level market and concentrated on niche markets for the 500VA to 3KVA range of UPS. It identified verticals like photo printing companies, medical institutions, and banks, amongst others for its 3KVA and above range of power solution products. It already caters to corporates like Bharat Sanchar Nigam Ltd, Indian Oil Corporation Ltd, Fuji Films, Konica, Development Cooperative Bank, Tata AIG and Wockhardt, amongst others.

One reason why HiTA decided on this move is because the margins exist only in higher-end UPS and not the entry-level ones. Also, these segments prefer buying UPS for their mission-critical machines, only after running some benchmarking tests. “We can prove the technical superiority of our product during these test rounds, as our UPS support the voltage mentioned on the box, unlike other companies,” claims Arun. While HiTA sells its high-end UPS to niche verticals directly, the sub-3KVA products are sold through its 45 partners nationally.

HiTA is also an OEM manufacturer for several companies, and this business contributes 45% to its overall revenues.

SOLUTIONS BUSINESS, AHOY

The company started a solution division called Digital Data Systems in 2000, to make inroads into the IT business as well. An IBM partner, this division concentrates on turnkey projects and is already contributing 10% to HiTA's overall revenues.

One reason why Arun decided to get into the solutions business was because he already had a good base of UPS customers to whom IT products could also be sold as a package. Also, he does not foresee a rosy future for the UPS market, Arun Ghosh says that Indian manufacturers are a dying breed, as the price differential between MNC and local brands are steadily coming down.

Arun Ghosh Arranging for funds to ensure further business expansion is his greatest challenge

"Most local manufacturers simply import knocked-down components from Taiwan, assemble them in India and sell them under their brand name. But with the duties coming down, this is no longer a lucrative business, especially in the entry- and mid-level products," he adds. Also the supply chain for these components is not organized, which means that spare parts are not always available.

KEEPING EMPLOYEES HAPPY

When Arun moved from Liebert to start HiTA, he had already spent almost seven years in the UPS industry. Since he was Liebert's interface for most customers, several clients too made a transition to HiTA very naturally. He managed to convert 30% of Liebert's customers into HiTA's.

Arun even managed to get over 20 Liebert employees to join him in HiTA. Rajat Sarkat, Zonal Manager-East of HiTA is one such person who made the crossover in 2002: “I like the friendly atmosphere in the office. This place is unlike a typical corporate structure. I think the prospects for this company is great, because unlike other IT products UPS has registered a consistent growth.” He then goes on to say how a separate amount is budgeted to cut a cake to celebrate any employee's birthday, anywhere in he country.

Currently the company has 67 employees nationally. He even married an ex-colleague, Leena. His wife now looks after the HR and service divisions of HiTA.

PLANS FOR MOOLAH

Fund management is a major challenge for Arun as he does not have the market capital to expand his business. He is planning to take HiTA public in 2005, to raise funds for this very purpose.

A Taiwanese company has already approached HiTA to financially back its business initiatives, though nothing has been signed on paper yet. “If I get good financial backing then I can double my turnover to Rs 25 crore in 2004-05,” emphasizes Arun.

VINITA BHATIA