Within the framework of the Make in India campaign, IndiaConnected portrays Dutch companies that produce in India. In part 2 of this series: Roosen Industries. This family business produces high-quality metal precision parts in the Indian city of Kanpur. "Our factory in India has greatly strengthened our competitive position"
In 2003, Gandert Roosen, son of founder Harry, who was 25 at the time, carried out a SWOT analysis of the Brabant family business Roosen Industries. The producer and supplier of technically high-grade metal semi-finished and finished products was finding it increasingly difficult to find enough good professionals in the Netherlands and Belgium and was seeing wage costs rise sharply as a result. "A serious threat," observed Gandert Roosen, who succeeded his father as director in 2012. "I was instructed to investigate whether we could outsource work. At the time, China was the promised land, but we ultimately chose India. The language, the democracy, the level of education and an old, reliable Indian trade relationship that could help us were the deciding factors."
Initially, Roosen tested whether production could be outsourced to India, but it soon became clear that communication was difficult and that the quality was below standard. "We supply multinationals in the medical, automotive and nuclear industries, so quality is crucial for us. So we decided to build our own factory in India."
Together with his Indian business partner, Roosen set up a joint venture and started building a factory in Kanpur, a northern industrial city on the Ganges. "In 2006, we started recruiting staff. That turned out to be not so difficult: Kanpur is home to the best technical university in the country. Moreover, there is much less competition than in the south, where many (international) companies are looking for skilled staff. While the factory was equipped with machines from Japan, we trained our new Indian employees in the Netherlands. Production started in January 2007."
As so often, cultural differences were the biggest stumbling block in the beginning. "India is extremely hierarchical. For example, we had an employee from a higher caste who did not dare to contradict anyone, while others knew better. It took us one and a half years to break through the hierarchy on the shop floor and to create a company culture where everyone thinks independently and makes decisions based on their own expertise. If something goes wrong once, you shouldn't punish it. Mistakes are allowed to be made. Since that button was flipped, things have been running like clockwork.
After four years, Roosen's Indian facility, where 40% of the semi-finished products are made, was breaking even. Now it is the fastest growing division of the company. "20% of turnover comes from India and this is expected to grow to 30-40%. The lower labour costs and an abundance of highly educated personnel - our main reasons for going to India - ensure that we can produce more than 20% cheaper on average and that we can complete orders faster because we have extra capacity. This has greatly strengthened our competitive position."
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