There is a certain ‘prodigal son’s return’ romance to the story of Amara Raja Batteries. The founder, Ramachandra Naidu Galla, was an engineer working at an energy consultancy in the US. The research that he did for a seminar on investment opportunities available to NRIs back home in India left a deep impression on him; it also coincided with the period in the early 1980s when the then Prime Minister Indira Gandhi was asking Indian entrepreneurs to return to India and start businesses here.
Ramachandra Galla came to India to scout for opportunities to set up a manufacturing unit, based on his engineering background. But a chance visit to a thermal power station in Vijayawada changed that. The batteries used for the backup systems at the power plant were based on primitive technology; he had seen far superior versions abroad. Sensing a business opportunity, he decided to launch a company that would make high-quality storage batteries.
It was not the best of times for a new player to enter the Indian battery market, which was dominated by Exide, Amco and Standard. His application was rejected and loan request turned down, citing lack of space for a new entrant on the scene. But he persisted, convinced the government departments of the power and efficiency of his product, and finally won through.
Amara Raja Batteries Limited (ARBL), named after his wife’s parents Amaravathi and Rajagopal Naidu, was incorporated as a private company in 1985. The founder’s idea was to introduce the maintenance-free VRLA (valve regulated lead acid) batteries that he had seen abroad in the Indian market. The plant was set up in a small village called Karakambadi near Tirupati in Chittoor district; the decision was both emotional (as it was his native place) and philanthropic (the motive was to generate employment opportunities for rural youth).
Government orders
In those early years, the government was the major (if not the only) customer for industrial batteries. ARBL customised its batteries as per government requirements and slowly expanded its operations, going public in 1990. Within two years it had constructed a plant; the same year saw the beginning of commercial production of batteries. Soon, orders began pouring in from government departments like DoT and ONGC; the former found the company’s high efficiency battery just right for its Multi Access Rural Radio system in far-flung areas.
By 1995, ARBL’s R&D department had received recognition from the Department of Science & Technology. In 1997, the company received the ISO 9001 certification from RWTUV, Germany. It also obtained recognition for Safety of Operations from Underwriters Laboratory, US. Other certifications for its plant followed - QS 9000 in 1999, ISO 140001 in 2002 and ISO / TS 16949 in 2004. The plant is today one of the largest and most highly automated battery plants in Asia, with most of the components manufactured in-house, and a capacity of 3.64 million batteries a year.
Even as it consolidated its position in the telecom and UPS sectors of the industrial battery market (in which it would become the leader in 1999), by the mid-1990s, it had decided to diversify into the production of automotive batteries as well.
This was not a decision arrived at easily. The company was well entrenched in the industrial batteries segment and reportedly, even the founder was hesitant to branch into automobile batteries. But his son Jayadev Galla had both the business acumen and foresight of his father and the charm and tenacity of his mother Aruna Kumari (a former Congress Minister, now with the Telugu Desam Party). Despite pressure from naysayers and critics, he succeeded in persuading his father to enter the automobile batteries line.
Automotive batteries
He invested heavily in infrastructure (as batteries had to be customised for different vehicle types), a capable supply chain, a strong dealer network and branding. The requisite technology was supplied by US-based Johnson Controls Inc.
The year 2000 saw the launch of ‘Amaron’, ARBL’s first automotive battery. These were said to be zero-maintenance batteries that came factory-charged and with a 36-month guarantee; and the buying experience was totally new - they were sold in well-maintained, air-conditioned shops.
Automobile batteries were low-involvement products that not many had advertised till then; ARBL was a late entrant and had to capture the public eye. It heralded the launch of Amaron with a publicity blitz, through TV ads, huge hoardings and even a mineral water bottle campaign with the slogan “You need water in this heat, not your Amaron battery”.
Despite all this, it took almost three years for the company to realise the profitability of that venture. It was only when the telecommunications and automobile industries started booming that profits started rolling in.
Impactful advertising
The clutter-breaking advertisements that O&M came up with for Amaron helped in no small measure. An impeccable advertisement strategy was put in place to impress the fact that Amaron batteries lasted much longer than other brands in the consumers’ collective psyche. Creative breakthrough ads using the then-rarely seen Claymation technique made ‘Amaron’ stand out. These ended with the now-famous tagline ‘Lasts long. Really long’ followed by a low-key but memorable ‘ting-tong’. Amaron had arrived. (The company won the ‘Creative Advertiser of the Year’ award in 2002 from ABBY.)
ARBL’s Amaron products include Pro, Glo, Fresh, Hi-way, Harvest Shield etc. Ford, Daimler Benz, General Motors, Maruti, Ashok Leyland, Honda, TAFE, Eicher, Volvo and Hyundai are its customers (among others). These automotive batteries are also exported to about 40 countries world-wide.
Under industrial batteries, the company offers 5 brands - Brute, Sleek, Quanta (UPS), Volt and Stack. Customers in this category include government agencies like Department of Telecommunications, Indian Railways, Power Generation Stations and public sector telecom companies (like MTNL and BSNL), as well as private players like Siemens, Alcatel, Nokia, Crompton Greaves etc.
Distribution, market share
The company has an efficient distribution network in place, with 18,000 retail outlets, 2000 service points, Amaron Pit stops and over 400 PowerZone retail outlets. Small shop-owners, auto mechanics, service stations, oil-and-lube retailers etc. contribute in no small measure to marketing and sales.
Today, ARBL commands 46 per cent of the telecom market and 32 per cent of the UPS market. Its turnover for 2017 is about ₹6,000 crore. Automotive batteries account for 60 per cent of its total revenues, with the rest coming from industrial batteries.
The company is banking heavily on growth through automotive battery sales, with experts predicting that India will become the sixth largest passenger vehicle producer in the world by 2020. Its R&D department is also looking beyond lead, lithium and nickel-based batteries. Alternatives like AGM (absorbed glass mat), gel platform-based batteries, flat-plate and tubular gel battery variants are in the pipeline. As e-vehicles and solar storage options emerge, the company is gearing up to meet the challenges.
Awards, recognition
ARBL features in Asia’s ‘Best Under a Billion’ 2010 list compiled by Forbes magazine. Along the way, it has garnered quite a few other awards like the ‘Best Telecom Equipment Manufacturer Award 2009’ from BSNL and the Ford ‘World Excellence Award’ (this makes it eligible to supply batteries to Ford worldwide). It has also won Ford’s highest recognition for supplier quality – the prestigious Ford Q1 award.
The company also has an excellent HR track record, winning several awards in this category.
ARBL has taken conscious note of environmental safety in its manufacturing processes, which has been recognised by the Andhra Pradesh Pollution Control Board in 2002 with an ‘Excellence in Environmental Management’ award.
Philanthropy
The company’s MD Jayadev Galla balances a political career – he is a Member of Parliament representing Guntur in Andhra Pradesh and belongs to the Telugu Desam Party – with his role in taking ARBL forward to greater heights. One of India’s richest and most well-connected politicians who is also in business, he takes a keen interest in philanthropy as well.
ARBL (and other members of the Amara Raja Group) operate through the Mangamma and Gangulu Naidu Memorial or Mangal Trust and Krishnadevaraya Educational and Cultural Association (KECA) for CSR activities.
The Mangal Trust is engaged in education, health and sanitation projects in rural areas, running a public health centre, a veterinary hospital and two schools. It has contributed to rural development by building roads, banks, bus shelters etc. It has also helped to increase the acreage under cultivable land in about 50 villages by investing in water conservation efforts. There are plans to plant thousands of saplings for medicinal purposes in an area specially developed for this purpose; the initiative will benefit several tribal families.
The company has always consciously striven to prevent migration of rural youth to the cities by providing them job opportunities at its plants in villages; even at its latest plant in Chittoor. To this end, ‘Amaragaon’, in collaboration with an NGO, is an ambitious scheme from ARBL, aimed at empowering the rural population with IT skills and more employment opportunities.