Published On: Tue, Sep 7th, 2010

Mr. Arvind M. Mehta

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Good Morning, today we have Mr. Arvind M. Mehta, immediate past president of Plastindia Foundation and Chairman & Managing Director of Welset Plast.

 Plasticsinfomart: I would like to start with your educational background and then your journey of starting Welset, to where it stands today?

 

Mr. Arvind M. Mehta: We started in year of 1968 and my educational background is very simple, I am a science graduate, B. Sc. We bought Welset Extrusion as a running company. It was in the processing of Cellulose Acetate Butyrate (CAB) which was used highly in fountain and ball pen industry. So I started my career from there. At that time I came to know about the colors and everything. Being a science graduate it was comparatively easier to know the name and working of the colors. So I had that interest and we made a name in pen industry, also as a raw material supplier. CAB is also called as Reprocessed Plastic Powder, and we had a very good reputation at that time for the same. In between we thought that only reprocessing will not give us the recognition we want. So we diverted into the PVC compounding and that was in the year of 1971. We had NOSIL with us as a supplier; we were able to grow in a right way with the growth of the industry specially cables. We even did the job work for NOSIL and that was also a big plus point for us.

So, I started career like that and gradually we moved ahead. We also diversified into Masterbatch business in the year 2000 as CAB business was not working as expected. We went to Silvassa in 2000 and built a factory of around 20,000 sq ft. for manufacturing Masterbatches. In the year 2003, we built another factory of 80,000 sq ft. that is for PVC medical compounds, PVC cable compounds and all that. In 2006 we built another unit for fillers, filler masterbatch etc. in about 16000 sq ft area. So gradually it has turned on that side.

Basically it is a family owned business, I and my son are there in management. My son has now taken over almost all duties of the Welset and I just act as guiding force behind it. He is working well and we are developing at the rate of around 25-30% annually.

Plasticsinfomart: So you started the business as a first generation entrepreneur?

Mr. Arvind M. Mehta: We bought this factory. I was doing job at Kalyan in Indian Dyes Stuff Industries. I served there for 8-9 months and then my father took the decision that I should not be serving, but should be doing business. So we bought this unit for around Rs. 35,000/- at that time. That is how we started.

Plasticsinfomart: What was the real passion which drifted you to start your own venture?

Mr. Arvind M. Mehta: Our family values were like we should not be in job and serve. That was the basic concept, because I was born in a business family. And always there was an urge that we should do our own business. So immediately we searched an opportunity and bought this unit. Though I have done B.Sc. but I tell you honestly, I opted for B group, which heads towards Medical studies. Everybody in family was thinking that I’ll be a doctor, but in my mind I was convinced that I should not be a doctor but a businessman.

Plasticsinfomart: Welset is a well known brand in an Indian Plastic Industry. Would you like to share some key hurdles you faced in achieving this success?

Mr. Arvind M. Mehta: Lot of hurdles. Without hurdles you see life is incomplete. Anybody who is successful faces lot of hurdles. We faced lot of hurdles. One of the major hurdles was that of finance. The finance was a tough job and we had to work hard for that. And whatever we were earning we were putting it back in the development of business. Next major hurdle was that the line we initially entered into had no growth as we expected. So the time you devote in a particular line, do the whole homework and do all things, set the market and all that. And then you have to change, that was something little difficult. But anyways that was something when we were switching over from CAB to other products like masterbatch and others. Another hurdle was to move out. Initially we were in Mumbai only and because of the competition we had to move out to Silvassa. We learnt in a hard way the art of management and the change over from protectionist industry and the uncompetitive world to the competitive world.

Plasticsinfomart: I would like you to shed some light on the global scenario of the product segments you are in, how big is it?

Mr. Arvind M. Mehta: As per the masterbatch industry is concerned, it is quite growing. Basically masterbatch is a substitute for raw material I would say. What raw material cannot do, this masterbatch can do with little help of some additives and some chemicals. So it is quite nicely growing and there is a good growth. So I think Masterbatch industry is growing minimum at an average rate of around 20-25%. That is why so many manufacturers are coming in India as Masterbatch manufacturers. But everybody has a niche market. Now you see business is getting little localized also. So things are changing. Previously the masterbatch concept was that you make it and you sell it, it was always in short supply. Now what has happened, we have to improve upon the quality. Now we have to give the best quality. Our customers are now following all the ISO and other standards. They are exporting or they are themselves a multinational company. So, automatically our product has to be of international standard only. It cannot be substandard. So, all the good manufacturers are on that line. So, as per the Welset is concerned, we are quite globally fit company and many others are also. Usually when we go out, we take part in K in Germany, or Africa and other countries, we have the stalls. Like us other Indian masterbatch companies also have their stalls. So quality is improving. And now people are following corporate style of functioning also. Anywhere in India if you see in the plastic fair, machinery people are no doubt number one participators but masterbatch people are also actively increasing. So gradually I feel that the masterbatch industry of India will be the global hub for the world also. Because what happens, polymer production is increasing here. So we will be satisfying the need of local market. IOC is coming with approximately 1.25 million tones of production i.e. around 12 lack tones. So 12 multiplied by 0.2 you call it 25,000 tones masterbatch will be required as our thumb rule says. So the growth is going to be there. And we have the intellect, you see, technical people, young people, they are coming into the plastics and they are taking the charge. Most of the masterbatch businesses which are family run in India, their children who are highly educated are coming into the business. So things are better off now.

Plasticsinfomart: So what are the focused products of Welset and what all are the geographies you are covering?

Mr. Arvind M. Mehta: Our focused products are Masterbatch and PVC medical compounds both. There are two things, this masterbatch we export in the Middle East say UAE, Saudi Arabia and many Middle East countries also. It is not a big amount, we sell one containers to two containers like that. We sell to African countries also. In African, all the major countries, like Kenya, Uganda like that. Our masterbatches are approved even in Germany also. We have that those standards and all that. So masterbatch we export in good way, not a big way but good way rather I’ll call it. And we export this PVC medical compound also. That we export to many countries. It is approved in Germany, it is approved in USA. We are opening our office in USA also. Even we are exporting to China also these PVC compounds. Now, they have different way of working so problems are there. So things are okay, only what happens that raw material price hike hurts us. Because international buyers generally give quotations on a longer view like 3 months or something like that. But in India, every 15 days we have a change of the price. So, for export purpose sometimes we are not able to compete because of the price variations. Quality wise we are good.

Plasticsinfomart:
If you compare the growth in Chinese plastic industry to that of Indian plastic industry, do you see any alarming situation for India?

Mr. Arvind M. Mehta: Earlier yes it was there. Before you say 2-3 years, it was being felt. But I feel now, nothing is like that. Because what happened that China started early in liberalization and other things. When we started, they were like 10 years ahead. We started our liberalization after 10 years, so now change is there. In PlastIndia 2009, you can see that effect. It crossed all the benchmarks and it has put India into very robust position. So anywhere in the plastics world if someone wants to outsource for plastics, they may look for China first but second option is India also. That is the point. Earlier that space was not there. Indian Plastic Industry was not the second source. But now it is there. So with China, there is a competition, that is ok, but I think within two three years, we will be able to cope it. One thing is for sure, we have a very good entrepreneurship, better quality, better management, and we have a better technical knowledge. So maybe things are working in a smaller way, they may be giving 20 containers; we may be giving 1 or 2. Massive change is there. So within two three years, I don’t see any threat from China in Plastic Industry.

Plasticsinfomart: World has witnessed global economic slowdown in recent last two years. Do you think Indian Plastic Industry has also felt the heat of that economic meltdown?

Mr. Arvind M. Mehta: When this economic slowdown news spread, everybody was disturbed, no doubt about it including us. September-October months of 2008, was a very delicate one. Everybody was in the mood of negativism that this has happened. About 10,000 factories were closed in China. But fortunately, India not being an export oriented economy as far as Plastic Industry is concerned, we are not that affected you see. No doubt the questions were there, but by October-November 2008 we came out. The growth came. I think there is a track from October-November 2008 onwards, till today, that all the raw material producers, they sold their raw material in an excellent way. That is 100% capacity may be plus 10% by lot of imports. That means there is a definite growth you see.

Plasticsinfomart:
My next question is about the support of Indian Government to the Plastic Industry of India. Do you think that Indian Government is taking good enough and supportive steps to supplement the Plastic Industry of India?

Mr. Arvind M. Mehta: See Government is definitely positive as far as Plastics is concerned. DCPC we call it, Department of Chemicals and Petro Chemicals provides support on the policy front. The financial help to the Plastic Industry is not there. No doubt they put it, but it is not in their hands also, as it goes to Finance Ministry and all that. But now with the release of new Petro Chemical policy, when it will get implement, you will definitely see a push to the Plastic Industry of India.

Plasticsinfomart: Any three applications in the Plastics you would like to suggest which can play major role in the growth of Indian Plastic Industry?

Mr. Arvind M. Mehta: If we go in a sectorial way rather, packaging is first. Packaging is booming sector where there is a solid growth. Second is agriculture, it has an excellent growth. And plastics in infrastructure, has a growth. Infrastructure means rigid pvc pipes and profiles. It is booming actually, because of the construction and infrastructure development. I may be wrong but as far as I know they are going to 150 lack crore in the development of infrastructure in India. Now with the new government coming in, that money will definitely push the Plastics Industry. We are part of it, pvc pipes, pvc profiles, pvc sheets and all different sheeting, so definitely it will help us.

Plasticsinfomart: You are a first generation entrepreneur, so would you like to share any thumb rules for the new generation entrepreneurs in the plastic industry which can make or break the success?

Mr. Arvind M. Mehta: Any new entrepreneur should know that the world has change. In Indian Plastic Industry, there is a big change, so he should have three Ms – Money, Management and Manpower. That means he should be able to manage or do the job like that. He should be able to manage money, people and all the management of sales and like that. So minimum requirement is that he should go with the standards. Which means whatever product one makes, it should be of national or international standard. Maybe BIS or something like that. Then the things may be coming in a right way. And to be more successful you have to have a stable balance sheet on table. Then only you can see you are in a right direction, otherwise you can go in wrong way. Where money goes, you should know.

Plasticsinfomart: Is there any one thing you would like to change in Indian Plastic Industry under present scenario?

Mr. Arvind M. Mehta: Yes, we have to see that per capita consumption of plastics in India is only 6 Kg while the world average is 27 Kg. Plastics is never blamed in any countries like China, USA or other countries. It is a twenty first century material and almost no invention is possible without plastics. You take computer it has plastics, you take mobile it has plastics, health care you take there is plastics, so government or any policy makers should not keep their mind locked for plastics. Just now what has happened, that Plastics is being blamed for the environment. It is not a fact. No doubt the littering habits of the people which are not under control, and they throw the things here and there, and that’s why such harm to environment is happening. Secondly, we don’t blame anyone. The truth’s littering is a problem, people throw here and there and no one is there to collect. Secondly, waste management we are not able to do, so that is why this is problem. In the year 2002, Supreme Court of India ruled that every state should implement the waste management program. Now whatever be the reasons, funds are not there or whatever, because funds will be required in huge amounts because when infrastructure of 150 lack crores is under development, we have to provide some funds for waste management to the municipal corporations and such institutions. Then only the things will be in better shape. We make many big buildings, industries, highways, but with 19th century waste management techniques we cannot sustain. So we are part of this process and plastics should be taken in concern. It is a convenient material. It will make life easier for the citizens of India or anywhere else. There are hundreds of examples you see, like footwear, tanks or automotives you call. And it is an employment generation industry. Like today we employ 3.6 million people directly or indirectly. So if we develop, it can add around 2 million more. And it is small man’s industry. You see, a person with small capital can start his business which is complimentary to the goal of government. But, these things have to be recognized and then the plastics industry should be seen. But just now the lock within the mind talking about environment is there. This should be removed so the things can happen in a way they should happen.

Plasticsinfomart:
What is your vision for Indian Plastic Industry in 2020?

Mr. Arvind M. Mehta: There will be a solid growth as there is a solid scope. And people are capable of it and people are doing it. People are putting lot of money into it. Just now I have seen that, like me, many people are building new units. Earlier we were happy with small units of 1000 to 5000 sq ft. something like that. But now people are putting units in 20,000 to 100,000 sq ft areas, for processing. I am talking about converters and processors. And it is a good sign that people have a shortage of space, but they are managing funds and everything. Previously the money was going into lockers and people used to hold it only, now profits are being invested back into the industry. So up to 2020, it will be the golden period of development for Indian Plastic Industry.

Plasticsinfomart: Do you think India will see some foreign investment while becoming global sourcing hub for Plastics?

Mr. Arvind M. Mehta: Yes we will get it. But even in India itself, people are investing a lot. So even if foreign investments are not coming, we will reach it by our own. Lot of SEZs are coming to support foreign investment. All the major multinational brands in automotives have coming in India, and it is the fact of line that automobile industry today is booming. 30% growth in Plastics is due to the growth of automobile Industry. And it is not that only multinationals are doing the jobs, people like me and other converters are doing it like supplementing Maruti, Hyundai, Bajaj or TATA and like that. So, if the investments come, it is fine, otherwise also it is ok.

Plasticsinfomart:
Last, I would like you to share a message for the clients of Welset Plast and for the stakeholders in Indian Plastic Industry?

Mr. Arvind M. Mehta: For clients of Welset, we are on a good growth path. We have best of the technical people. We have best of the management people and we have a passion for customer satisfaction. Our team has a passion for customer satisfaction. So we like to do our best all the time. And we will be coming with new products also. Our R&D is extremely strong. So whatever is the requirement of the customer is, we can definitely meet the standards they require. And we always believe that our customers are our partners in progress.

For the Indian Plastic Industry, for coming ten years if your management, manpower and money input is ok and you are in command of the situation through the accounts, through every months balance sheet, 100% growth and jump is possible there. Because our consumption is low, world consumption is more and lot of money is coming in. We are not an independent industry, but in between and dependent industry on different sectors like automobiles, construction etc. So there growth brings our growth. I look at aerospace also now as next. In aerospace also, lot of plastics is used. So there is growth in packaging, there is growth in infrastructure, there is growth in health care; in health care plastics is growing like anything. So there is tremendous growth everywhere. Only, government has to be supportive on the line environment and policy issues. And, government should create a positive atmosphere from their side. You cannot blame plastic manufacturers for the littering habits of public. So government should make some systems by which it stops. Education on waste management should be given. Government should money in waste management; otherwise it will go like this. We are very much proud of what government is doing in terms of infrastructure but if waste management is not there nothing will work in a way we want it to work. So, plastics growth is everywhere. For machinery, molds etc., there is tremendous demand. In Plastindia 2009 exhibition, most of the machinery people told me that they are book for about one and half years of their capacity. And Indian machines are also quite good, because of joint ventures, say L&T, Ferromatik Milacron, Rajoo Engineers and other people also. So, things are ok. Our machinery is good, we are good in electronics also which is being applied now into plastic machines. And people like you are also contributing to the knowledge of Plastic industry through internet.

Thank you very much Sir. So, we had with us Mr. Arvind M. Mehta, immediate past president of Plastindia Foundation and Chairman & Managing Director of Welset Plast.