“The thing that has not changed for the past 115 years at the Moloobhoys is our commitment to the customer for delivering a service or a product which is top notch with no compromise in quality and professionalism.”
You are into electronics, equipment services, ships, defence and leisure industry. COVID-19 pandemic has affected every business segment, and obviously your business also must have been affected. So, how has been the last 8 to 9 months of business and what were the challenges you faced?
Yeah, I must say Covid-19 has really hit us and the industry very badly. On the 19th of March, we were just about to open our new building – it’s a whole new 6-storey service building in Turbhe, equipped with state-of-the-art life raft firefighting, lifeboat servicing station, electronics and that was going to be our service headquarters to be inaugurated in the second week of April. So Moloobhoy closed on the 20th of March 2020, and then re-opened when everybody else reopened. I had that headstart of information and so we immediately tightened up on all our expenses. We literally clamped down on every single thing and we gave our staff the option – If they continued working with us we promised to take them safely through this COVID crisis, but with a salary deduction. But if they wanted to move out they were free to collect their full salary along with other benefits and leave. That was a very bold thing for us to come out with because we could have lost some really good people, but to my absolute surprise, we did not get a single resignation. And in our business, we need the physical presence of the people especially our engineers and technicians because they have to go onboard and conduct the SRT, APT or the repair of the navigation communication equipment or even the lifesaving, the lifeboat testing, etc. is all done on-board, so physical presence is very important and so we struggled with this, there was no business but we had kept our costs down, we cut salaries, we cut expenses, we were very clear about that. And we did not waste those 4 months. We sat down and we said, let’s see what is our cashflow like. We went through our debtors list with a fine comb. We had our debtors list perfectly made and we started writing to our debtors for release of payments. Then we started writing to various government authorities to consider us as essential services, and we were given that special essential services pass and so I think in the month of June, we had resumed work to the extent of 40%, like all the technicians, engineers were going on vessels or coming to the station to do the life raft servicing, etc.
Could you tell me who are your customers and where are you operating? What are the kind of services that you are providing to the industry?
Basically, we do 3 segments. One is sales of electronic equipment, navigation communication equipment, we represent a host of OEMs, the most important being FURUNO, which is one of the leading manufacturers of navigation and communication equipment. In fact, I would say that in the world, there are only two manufacturers who do the entire suite of both navigation and communication products, and FURUNO is one of them. So, that’s a very prime agency that we have and that is our main business where we sell FURUNO. Apart from FURUNO, which is in the communication navigation electronics segment, we also do a lot of pyrotechnics and a host of other OEMs, who we have represented for over 25 – 30 years and most of them, on an exclusive basis. If you take ACR EPIRBs, we have represented them for about 21 years, and we have about 70% market share. So, there are a lot of OEMs that we deal in, which we have been dealing in for a very long period of time and on an exclusive basis, and have very large market shares. So, that comes under sales. Then comes the services segment for which we have our corporate head office in Lower Parel at Marathon Futurex. During the past 19 years our service headquarters was in Mazgaon because of the proximity to the docks but the area was so bad that I decided to move out of there and as I said, now we have a 6-storey building that we call Moloobhoy Towers and on every floor, we have a different service vertical operating. That’s where we do the liferaft servicing, firefighting, lifeboat servicing, electronic servicing. We have about 46 engineers and technicians in both the segments totally. We also do training, PCB repairs, so there’s a whole host of service activities we do in our building in Turbhe. The third vertical is training – we do the ECDIS training for FURUNO for the FMD 3100 and 3200 which is the latest ECDIS model and for the FURUNO old model that is FEA. We have done over 10,000 candidates and the amount of customer satisfaction that training has generated is phenomenal. We used to have physical classroom training in the past, but with this COVID-19, we had to go for virtual training, and I am very happy to say that ours is the only virtual ECDIS training course for FURUNO ECDIS, in South East Asia, and we have students from Poland, Thailand and Singapore.
In these 3 areas, where do you see the future business coming from and which is the major thrust area for you?
I would say all 3 are interconnected, that’s why we went into it. I don’t like going into totally unrelated areas of business. So, when I say sales, it’s when I sell adequately that I can retain the OEM and retain the agency. So, sales is very important. After having sold, then that same item requires to be serviced, maintained; you have the AMC, AIAMC, and you have other maintenance calls, upgradation of software, so that’s where service comes into the picture, and of course service is always the most profitable segment because your basic input there is labour, and the third segment that we do is training. Now, if I sell enough of ECDIS then I have enough of seafarers to be trained on this ECDIS, which then gives business to my training segment. So, they are all interrelated. In future, we will probably need all 3 when the times are good, customers are not willing to wait for something to be repaired then they buy new items and the sale goes up, and there is a lot of new building, etc. so in those pre-2008 we had some huge ship building orders, etc. and that was a wonderful era for everybody including the shipping industry, service providers like us. Post that, we had the recession and then everybody said, I don’t want a new item, you please repair my old one. That’s where service stood us in good stead, and training as you know that unless you train officers – ours is mandatory training, there’s no way they can perform. So, this is the way that we structured our things. One thing new that I have started is we were only in the LSA segment and in the electronics. Now, this is the first time Moloobhoy has formed a joint venture otherwise all other companies that we have – we own 100% of it. This is the first time that we have formed a joint venture with a Danish gentleman but he works out of the UAE and his company is called Exalto. He has got the largest market share in the UAE for supplying all these mechanical items like pumps, air conditioning, engines, etc.. for the smaller boats which is something Moloobhoys were never doing. So, we have tied up with him to open a new company and we are now doing that same thing in India and I am very pleased to see how successful we had been in that. So, that’s a new foray that we have entered into, the customer base is the same, it’s the same Cochin shipyard or Goa shipyard or you know mostly all these shipyards which are building new vessels but what we are offering the customer, the scope of supply has increased. So, we are trying to be a one-stop shop for such customers.
Apart from India in which other regions you are operating right now, and do you have any expansion plans?
Actually it was during COVID-19 that I got convinced for expanding into the UAE and we do a lot of service there. We have offices in Dubai and Fujairah, we are headquartered in Fujairah because that’s where the big vessels come and then we also opened an office in Oman. In Oman we represent Furuno exclusively too. So, there again, we do a lot of service and sales. So, in Oman, it is sales and service, in the UAE, it is mostly service, and in India of course as I said it is a combination of all three. Our plan is to open an office in Qatar and Saudi Arabia, basically the Middle East, the Gulf area and offer our services to the customers. But it’s always challenging and I must admit I am not as young as I used to be but my elder daughter looks after the Middle East segment, she is very ambitious and keeps pushing me to open in Qatar and Saudi Arabia.
Do you face any competition in any of these areas?
Of course, there is a lot of competition – some ethical, some non-ethical. In the electronics segment, it is always ethical competition because it’s very difficult to do something unethical. We have some good companies delivering good products, good brands, etc. So, we are always fighting to be L1, and at times have operated even on negative margin; so, the competition is there but it is ethical competition in the electronic segment. But in the lifesaving segment the competition is really depressing and debilitating; reason being, it is not ethical.
I keep hearing government talking about Make in India, Atmanirbhar. So, in your area of business, do you see any of Make in India picking up?
Yes sir. We started manufacturing our own motors. That’s a very small segment of our business. The government comes out with a lot of policies but unless it really focuses on the ease of doing business, I don’t think people like us – at least in the MSME segment, I am not talking of the big giants but I am talking about MSME segments, will really go all out and invest. I mean, like I said, I represent FURUNO exclusively. I have an extremely good relationship with the top people at FURUNO. It would take me nothing to convince them to come and start manufacturing in India, and FURUNO is an international brand with 40% world share 80 worldwide distributors etc., very respectable. And it would create so many jobs in India, but I would never do it because the number of licenses and the number of approvals, and oh God. It’s crazy, so who would go through all that. Even today, in the small little business segment that I am doing, I have to go 10 times to different authorities for approvals, for licenses, for everything and it’s not given easily. It’s all paper-based. The full stops and commas are more important than the spirit of the whole thing, and again I find that very disenchanting.
Your group is 115-year old. What has changed since then in your company? How did you adopt to the changing times?
We started as a lifesaving company and when I entered 19 years ago, I added the electronics parts segment, training, I took the company to the UAE and Oman. So, I think we have evolved over the times. We started maintaining 15 FICs of the Indian Navy. We have started with the new company called Moloobhoy Marine Equipment where we are doing all the engines and the air conditioning, etc. which we had never done before. We had different segments but it’s always everything related to the marine industry. Two things have not changed over the 115 years that we have been in business. One is that its focused marine business; we have never looked at railways, aviation or anything else. As a result, our presence in the marine industry is very well felt and recognized. I think this focus on marine has helped us. The thing that has not changed is our commitment to the customer for delivering a service or a product which is top notch with no compromise in quality and professionalism. And I think that concept of customer is king and zero tolerance for customer complaint – these are the 2 things that have remained unchanged. Over time we just added different verticals to our main core business of ships, shipyards, navy, coast guard, ONGC and things like that.
These days we are hearing about delivering spares from shore to ships by drones. We are talking about autonomous ships coming in the near future. So, all these technical advancements will have any impact bearing on your business? Or how are you prepared for moving into the next century?
This is going to be such an exciting time. In fact, today with the ECDIS, or even with the TVRO or the fleet broadband, I hear my engineers saying, madam I will solve the problem remotely, don’t worry. In fact, during COVID times, Moloobhoy has serviced the industry by offering free remote monitoring, and remote repairing services. And especially, Great Eastern, they had a lot of vessels because tankers during the COVID times were doing very well as they were being used to store oil, and whenever there would be a problem with the radar or VHF they would ring us and our engineers would remotely take over the system and repair it. So, I look forward to the day when it would be no longer necessary for the engineer to go by lounge or by helicopter in the deep seas. You can actually do all the repairs remotely sitting in an air-conditioned office. It also means the safety of the engineers is enhanced because it is dangerous climbing on the mast and repairing the antennas, etc. So, I look forward to that day. I think that’s really exciting and fascinating, and it’s going to happen.
