of the largest optical media companies, Moser Baer
had been growing at a fast pace, until the oil crisis happened. No thanks to
increasing polycarÂbonate prices, the key raw material for optical media, Moser
Baer saw fortunes tumble quickly. For the first time in its history, the comÂpany
showed losses. HowÂever, it has quickly bounced back, and remains upbeat about
the future. In a interview with Yograj Varma, Deepak Puri, ChairÂman of Moser
Baer, talks about the fall from grace story, about hardware manuÂfacturing and
his future plans.
On hardware manufacturing
I think we have a very vibrant service sector. But to me, it is selling
labor. I think we should start looking at selling beyond services, going into
hardware or into some finished software. Unfortunately, that is not happening.
Add to that, the Indian governÂment (previous and current) does not underÂstand
the hardware business. Let us take the example of cell phone manufacÂturing in
India. It is a very complex operaÂtion if you start looking at the entire value
chain. As no phone assembler makes the component himself, he has to have very
tight control of inventory. Since most of the components will be imporÂted,
they will factor in the time lag in clearing imports. By the time that it takes
the material to reach the factory, the model would have changed. I think the
government has to mitigate these difficulties.
Another example is Intel.
When Intel announced its plans for India, all semiconÂductor compaÂnies were
watÂching the deal carefully. I think the day semiconÂductor comes in, your
first step has been taken. And Intel was very serious. But look at the offers
Intel has had from other counÂtries. In China, the government is ready to offer
land for the facility. In Israel, the government pitched in with 25 percent of
the investment. Obviously, they have similar expectations from India, but that
will not work in India given our political system. So, I think, real hardware
manuÂfacturing is still some way away.
On new plans for Moser
We are not de-risking our optical media business. We are one of the
strongest organizations in optical media and our focus will continue to be on
optical media. However, I think we have reacÂhed a stage where we have to look
at other things also. As annoÂÂunced recently, Moser Baer will be looking at
solar photo-voltics seriously, as the next line of business. There is a lot of
synergy between that business and our existing one.
thrust and R&D thrust
I think we need to ramp up the industry-academia collaboration. Look at the
US. About 80 percent of students are funded to do R&D. In India, the depth
of knowledge is huge as high technology R&D is happening and is funded
largely by the government. I think the IITs are a hotbed of knowledge and we
have tied up with them. I am told that the projects are working out very well.
We have also tied up with various organizations across the world. It is like
following the Mughal example. The Mughals, in order to get entry into a new
region, would marry their daughÂters to the local kings; appoint Vasirs; and
become part of the kingdom. We share technologies with these organizations,
which helps in bettering our products. We realized that there are areas we
needed to work on, in terms of new technology, and the IITs have been working on
them for the past 15 years. Given such rich knowledge base, I think the best way
for us was to partner with the IITs, rather than duplicate the effort. The
Indian tech institutes have very enthusiastic students headed by brilliant
professors. I think partnering with them is a win-win situation for both.
On the Moser Baer
While we have introduced our own branded products in India with good
success, we are also planning to do the same in some countries in South Asia. As
we have taken a policy decision of not competing in markets where our principals
are strong brands, we are looking at some countries in South Asia.
On HD DVD and Blue Ray
I think there is an impasse right now. Both sides have invested heavily and
they are not going to give up easily. This is not a quesÂtion of just standards
but million dollar investments in R&D, and, more importantly, billions in
expected revenues. Both these sides are well funded. I think that the way out of
the current imÂpasse is that both sides should come together and work out
common standards. However, until such time, the stalemate conÂtinues. From
Moser Baer's persÂÂpective, we are fabricators. Our job is not to be part of
the politics but to ensure that we are ready to roll out any or both techÂnologies
as and when the time comes. I think we will be producÂtion-ready in the first
quarter of 2006. Since we are part of the conÂÂsortium, we are working on the
specifications and also developing our own IPs. Right now it's a wait and