With the Covid-19 pandemic wreaking havoc and imports drying out, India has been looking inwards to step up the production of ventilator machines. India’s leading ventilator exporter Skanray Technologies forged new partnerships and toned-down production of other equipment to rise to the cause. Speaking to Sohini Das, Vishwaprasad Alva, the firm’s founder, and managing director speaks of the current challenges that lie before the industry.
Q. What was the domestic demand for ventilators before the pandemic?
A. Domestic purchases of ventilators in India were about 10,000 units a year, of which 9,000 were imported and the rest shared among 4-5 suppliers. Sadly, In India the tendering process, corruption, and the non-transparency in Government purchases did not let us supply to the government and we had to live with the private sector and exports pre-Covid-19.
Skanray was founded in 2007-08 with five R&D professionals and started commercial operations in 2011-12 at its own facility in Mysore. Today it has grown to a 700-strong team of professionals with 50 products and 80 patents. We have two units in Mysore, two in Bologna Italy, a facility each in the US, and the Netherlands and new partnerships in China, Brazil, and Mexico.
Q. With the pandemic raging did the government approach you to step up manufacturing?
A. The first contact happened on March 18 by the GoI and thereafter by various state governments and NGOs for ventilators, with an estimated requirement of 100,000 ventilators. There was a call from the Prime Minister’s Office (PMO) to look for domestic efforts to meet the requirements, starting a scramble for new designs, jugad solutions, imports, partnerships, etc. and the rest is visible for us to see and learn.
Q. Can you share your experience of ramping up in a short time?
A. Skanray had to ramp up from the already stretched commitment of 5,000 units to 100,000 units and announced that it would share the intellectual property (IP) and design to whoever was able to pick up the technology and scale to large volumes. We were approached by Bharat Electronics Ltd, Electronics Corporation of India Ltd, Bharat Heavy Electricals Ltd, BEML Ltd, the Tatas, the Mahindras, Toyota, Ashok Leyland, TVS, Kirloskar, MG Motors and few others to partner on ramping up ventilator manufacturing.
BEL and Mahindra were the first to respond. BEL’s Bengaluru team was in Mysore within three hours of the first call. Mahindra representatives were at our facility within a few hours and we started the design and manufacturing transfer the same day, working on two different models of the ICU ventilator.
Q. What was the experience of these new partnerships?
I am happy we chose BEL and the DRDO. Despite being government entities, speed, professionalism, and competency was unmatched even in the private sector. BEL put up a supply-chain team and assembly line in less than a week. DRDO mobilised its software team, its defence, and aerospace vendor base to develop some critical sensors that were import-dependent and critical. This joint exercise strengthens the belief in the combined strength of the public sector units, the defence labs and the Indian industry is reacting to an emergency seamlessly and breaking all barriers. I wish this was how we worked without Covid-19.
Mahindra was a new exercise. Skanray and Mahindra R&D teams had to redesign the high-end ICU ventilator to make user interface easy for paramedics to operate and also leverage the supply chain of the auto sector, which is best suited for large-scale manufacturing. I am sure everyone in the industry would be amazed to see the first units rolled out of the Mahindra facility in less than three weeks. In normal times, this would have been a six-month exercise. Everything was done without compromise on performance or quality.
Q. What kind of orders do you have for the new product?
A. The GoI has not confirmed any orders for the new ventilators but have asked Mahindra & Mahindra to submit the unit for testing and provide information about the capacity, features, specs, and price for them to consider for new requirements if any.
Q. How easy or difficult is it now to get working capital loans from banks?
A. The Indian Banking system and GoI policies towards the manufacturing sector are the worst part of the story and have been disastrous for “Make in India”. Even with a large confirmed government order and payment dues from the GoI itself, the banks would take few weeks to respond to the request, not study the case in detail and keep sending queries after queries for another couple of months, after which the whole need would have gone off or alternate arrangements would have been made. Venture funds and private equity players take six months to finalise an investment but offer some hope.
Talking of companies moving out of China to India post-Covid is another suicidal exercise if someone tries without rooting out corruption, red tape, and infrastructure bottlenecks, and ramping up supplier base and creating a vibrant captive market. I am unable to see any light in the end of the tunnel with the policies of this Finance ministry.
Q. What is needed now for course correction?
A. Speaking of Medtech and allied devices sector, R&D and Manufacturing, Make in India should be revolving around products that are export-worthy and certified globally and that needs a lot of basic infrastructures, policy decisions, supply chain, R&D capabilities and transparency in government buying. Corruption in government purchases has to be eliminated and banking needs to be streamlined. The economy has been rejuvenated to create local demand. Globalisation cannot be done away with slogans of Swadeshi. Just like how the Covid-19 brought PSU, Defence labs, and ancillaries together, we should explore new financial models for public-private partnerships and co-operation and strengthen the manufacturing sector and rural industry focused on agriculture and food processing industry.
Q. How badly have your exports been hit? When do you see them picking up?
A. Ventilator exports have been restricted since March 19 and have not been reviewed even after two months. Companies that have the capacity and don’t have domestic orders have to be permitted to export. We have a great potential to export now, but there is a severe crunch for capital, unfriendly banking policies and a non-existent export incentive scheme. Taking my own example. We have a possibility of exporting more than a billion dollars of medical equipment to Europe, Eastern Europe, Latin America, Nepal, Bangladesh, Srilanka, and Africa among others, but are stuck in internal debates. Normally, it would take a year for exports to resume, but a lot of opportunities would be lost to China and other countries that will act quickly and close the demand.
Q. Did you sacrifice manufacturing any other product to make ventilators?
A. Yes, we piled a huge X-Ray equipment backlog due to redeployment of R&D, engineering, and manufacturing resources to ventilators having committed to supporting BEL and Mahindra. We have to catch up once these partners are on their own.
Q. What kind of investments you had to make for Covid=19?
A. We haven’t made capital investments to make up for the Covid 19 because of the smart partnerships and leverage of spare capacity with suppliers and other associates.