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Corporate Report

Published on: June 4, 2023, 5:20 p.m.
Kennametal's big bet for growth
  • KIL offers comprehensive service solutions

By S M Boothem with Akshaya M

Looking back at history, metallurgist Philip M McKenna created a tungsten-titanium carbide alloy for cutting tools that provided a productivity breakthrough in steel machining in 1938. With his invention, Philip started the McKenna Metals Company in Latrobe, Pennsylvania, which was later renamed Kennametal. Today, the conglomerate serves over 80,000 customers in more than 60 countries across the aerospace, earthworks, energy, general engineering and transportation industries.

Kennametal’s journey in India is equally exciting. In 1964, Widia India Private Limited was incorporated in Bengaluru with 30 employees and one shaping plant. Kennametal acquired WIDIA in 2003, leading to the establishment of Kennametal India Limited (KIL). In 2024, the company will celebrate 60 years of successful operations in India. The company’s state-of-the-art manufacturing facility in Bengaluru spans over 29 acres and is well-known for its metalworking solutions and services under two brands – Kennametal and WIDIA. These solutions enable customers to achieve longer runs, faster cuts, and superior machining precision.

“Our primary focus lies in the aerospace industry, where we have a strong global presence. We are also experiencing rapid growth in India, with multinational corporations investing in the country and Indian suppliers serving Boeing and Airbus. They secure many new orders. We have observed significant traction in this segment, and aerospace serves as a major growth driver for us in India. Another area of interest is mining, given the increasing number of coal mining and other ore extraction activities. We offer solutions tailored to underground mines, supporting the mining industry. Additionally, our products, such as drill bits, find applications in road infrastructure and metro construction projects. We have a strong presence in the railway sector as well, and are involved in the modernisation of existing structures as well as the construction of new metro lines,” explains Vijaykrishnan Venkatesan, MD of KIL. KIL also caters to the energy sector, providing products for turbines and windmills, and has witnessed significant growth in the mining and infrastructure sectors in India. These sectors are experiencing double-digit growth rates and making substantial contributions to KIL’s business.

Entry into the EV market

KIL recognises the electric vehicle (EV) market in India as an area of opportunity. As automotive manufacturers expand their offerings of hybrid and electric vehicles, KIL is well-positioned to support their evolving needs in this area. From their machining solutions portfolio in India, KIL recently introduced a standard Vertical BTA machine for machining shock absorber components for an electric two-wheeler manufacturer. Additionally, they have also supplied finish boring machines to a leading two-wheeler EV maker.

In addition to providing inserts and handling annual maintenance costs (AMC), KIL offers comprehensive service solutions. The company works closely with its customers, building strong relationships through a variety of customer-oriented activities. KIL’s position in the market is very strong because they engage in both high-involvement purchases and the annuity business of the tools they provide. As a result, there is substantial synergy and mindshare from customers, and the emotional investment is high.

  • Venkatesan: helping customers achieve their objectives

    Venkatesan: helping customers achieve their objectives

KIL recently announced its financial figures for the quarter ended 31 March, 2023. Its sales grew to Rs255.7 crore, 4 per cent higher as compared to the same quarter last fiscal. Profit Before Tax (PBT) was Rs22 crore, down 39 per cent over the same quarter, last fiscal. While the hard metals segment witnessed growth, there was an impact due to manufacturing under absorption. The machine tools segment sales saw a decline in its export revenue due to a slower reopening in China.

“During the quarter, we benefitted from price realisation, volume growth, easing of supply chain constraints, and resilience in our end markets of transportation, aerospace, energy, construction, mining, and general engineering. We successfully partnered with several of our customers in catering to domestic market demand through innovative solutions, new product introductions, as well as robust application and technical service support,” said Venkatesan explaining on the company’s performance, 

KIL has invested close to Rs350 crore in the last four years in plant modernisation. Venkatesan discusses the company’s role in its customers’ and India’s growth story: “We see the manufacturing sector is going to grow very fast in India. You take EV or infrastructure or aerospace, any sector – it’s going to grow. Our objective is to help our customers achieve that productivity because growth cannot happen just by linearly adding machines and adding manpower. So, technological advancements become extremely important for customers. Our role is to help our customers achieve their objectives.”

In conclusion, Kennametal’s journey in India and its strong global presence in industries such as aerospace, mining, energy, and transportation position the company for continued growth. With its state-of-the-art manufacturing facility and innovative solutions, KIL is well-equipped to meet the evolving needs of customers, including the promising electric vehicle market.

Despite recent challenges in financial performance, KIL remains focused on fostering strong customer relationships and driving productivity through technological advancements. As India’s manufacturing sector continues to expand, KIL is committed to supporting its customers in achieving their objectives and contributing to the country’s growth story.

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