Magod Laser - Cutting Edges with Halaswamy Magod - 1215/WOD

This article is dated 2013. I was fortunate to meet Halaswamy Magod at the company's Jigani unit, see around the premises, understand business process, met employees and gather several inputs on the Laser machining. An update as of 2019 is shared towards the end of this article.

After studying and working in the United States, he returned to India with plans to set up a business. Even before he went to Texas, he was certain that he will learn something new from the developed world and return to do something new in the developing world. Working with one of the leading industrial manufacturers, he was able to foresee the growth that India could see in the coming years as well as the demand for facilitators of growth. On travelling across the nation in 1994, he was convinced about his estimates for the industry growth. On one fine day in 1995, he decided to get started with the project to set up a laser cutting plant in Bangalore’s Jigani Industrial Area. It took him almost 2 years to make this project come to life. In 1997, when the button to power India’s second laser cutting machine was pressed, he envisioned that he will build the company to be synonymous with application of laser power for industrial operations in India. For over 15 years, Magod Lasers has been a champion in providing various services to many companies and Halaswamy Magod has been building his vision with time.

In 2 years at Mayfran International, Swamy worked on laser technology. He was multitasking on managerial decisions, capital equipment purchases, justifications, maintenance, tool designs, etc. As a manufacturing industrial technologist, he had tremendous exposure to all that was happening in the industry. He had been thinking on what he should do after returning to India and kept focusing on the future at all times. On returning to India towards the end of 1994, he had a big list of things to do. He bought software from the US which would generate a program for the machines to cut sheets optimally. He went around the nation meeting people and companies which were into manufacturing. In his extensive travel, he noticed that the use of laser technology in the process was close to being absent. In fact, India had only one laser cutting machine which was owned by Rishi Lasers in Pune and the entire nation depended on this machine or went in for alternate cutting technologies. Swamy observed that, at most industries, cutting were limited to common shapes like squares, triangles and circles and nobody took the risk of experimenting with advanced designs. Thus, there were not too many takers for the software. Swamy saw this as an opportunity to set up a manufacturing facilitation unit. Considering his previous experience as well as the situation in India, it was wise for him to promote laser technology among manufacturing industries. He put a word to his father for his consideration.

Swamy’s father had left his teaching job and had started a rice mill in Davangere. The business had grown considerably in the last many years and he had made a name for himself in the industry. He took a lot of time to show a green flag to Swamy. In the meanwhile, Swamy had got his project report ready. It was an extensive research report on the entire industry. He had presented the report to KSIIDC and requested them to finance the project. KSIIDC agreed to lend Rs 1.5 crores at a rate of 22% per annum against a requirement of Rs 2.25 crores. The interest rate was grueling. Swamy’s father was ready to invest Rs 75 lacs. While Swamy thought that this money was from his father’s savings, it was only after a few years he learnt that his father had loaned the amount from a large number of friends and well-wishers. It was one of the greatest risks of his life. “If I had known that my father was taking such a big risk, I would have never taken the amount. Knowing this, he never disclosed the source of the funds till such time came”.

A second hand laser cutting machine would cost less than half of what a new one cost. Swamy had, therefore, spoken to people who he knew in the US and struck a deal to buy a second hand machine. Swamy went back to the US to get the machine to India. KSIIDC would release funds only when the machine reaches India. After coordinating between the KSIIDC, US Department of Commerce and Indian Department of Commerce, the machine finally left the US and landed in India.

In May 1997, when Magod Laser opened its doors in Bangalore, it neither had any competition nor did it have any customers. It was the lone company in South India and Swamy hoped to garner all the business that went from South India to Pune. Getting the first and second customer was not very difficult as a couple of companies immediately moved to Magod Laser for the location convenience as well as savings in terms of costs and transportation time. However, nothing happened after that. The total sales for the first year were lesser than the interest cost that they had to pay.

After the business was in place with a couple of orders, Swamy went ahead with marketing plans. He started meeting companies that, in his view, might consider using laser technology in any of its processes. He attended a large number of business exhibitions, trade shows, etc. and tried to promote the technology. There were some companies in Bangalore like Otis which were using the technology in the US and thus, it was easy for Magod Laser to sign them up. Swamy had been observing that more and more multinational manufacturers were planning to set up a shop in emerging economies like India and he was certain that business will pick up soon. In the next few months, Swamy added bigger players like Toyota Kirloskar on the clientele. In an amazing turnaround, Magod Lasers booked profits in the second year of operations, a performance that is seldom seen in capital intensive businesses like this. Soon, Magod Laser became a preferred laser technology partner of several companies across the nation.

Swamy's second brother Mr Rajendra had joined the company from beginning and was looking after finances and was coordinating with financial institutions and banks. In 2001, Swamy’s eldest brother, Col Ravindranath retired from the Indian Army also joined Magod Laser. Colonel had played a crucial role in capturing the Tololing peak during the Kargil war of 1999 and was awarded the Vir Chakra, a gallantry award. He had been a big source of inspiration for Swamy to join SSBJ. Despite all efforts, Swamy could not join the Armed Forces. He had spent more time at the school’s gymnasium and athletics ground than in the classrooms. After the school, Swamy went in for engineering studies at Davangere where he spent most of his time on the hockey ground. Half of the hockey players in the college team were from SSBJ. After completing engineering, he worked at a couple of companies before going to the US for higher studies. During his stay in the US, Swamy’s life saw a big change. When he stood, for the first time to cater his pocket money requirements, in the dormitory canteen to wash the dishes, all the fantastic feelings of being the in the states, dignified feeling, egos, everything got mixed with the soil making him equal to the ground. At first, he ensured that he picks up the plates, tumblers, bowls and spoons in a way that the food particles do not touch him. Slowly, the feeder belt moved faster as larger number of students came in for food. In minutes, he had food stains all over him and soon, he was running through to catch all the dishes that were rolling in. “More than anything, my greatest learning from my MS is dignity of labor. The experience made me a humble person. Another great learning that I had from my stay at the US is time management”, says Swamy. Even during his MS days, Swamy continued to actively participate in sports. He was member of the teams that played inter college football and athletics at the international levels. He continued to work there all through his study days and realized that he could do anything.

Magod Laser felt a pinch to expand operations as the single machine that they owned was running at full capacity and there was plenty more opportunity. They had recently closed the loan taken from KSIIDC, partially through internal accruals over the 3 years and partially by taking a loan from public sector banks at lower rates. As they discussed the need for a new machine, they felt that they could expand their portfolio of services by buying a machine with different technology rather than the one, i.e., laser technology. For a moment, they felt that they could work harder to explore laser opportunities with the same machine and also explore other opportunities with the new machine. They zeroed in to buy a Water Jet machine. In the coming months, Magod Laser promoted its new technology and soon, the machine was up and running. However, a major tragedy awaited them.

In 2002, there was a major problem with the laser cutting machine. The laser orders couldn't be executed and water-jet orders were yet to arrive. Life at Magod Laser came to a standstill. All the projects went haywire. “We had a terrible time. We just could not afford to delay any order. We took the material to Pune and approached Rishi Lasers to help us. The orders were processed, brought back to Bangalore, and delivered to customers on time. Soon, this became a routine. For over 3 months, we ran around the same way and finally, we had to go in for a new laser machine. We neither hid this from the customers nor delayed any orders. At all times, we ensured that we keep up our words and in the process, our profits took a big hit. However, when I look back today, I feel we have enjoyed a tremendous goodwill due to this act. Today, there are over 30 laser machines in the city and none of these customers have even had a thought of looking elsewhere”, says Swamy.

The crisis had created serious wounds to Magod Lasers. The repercussions were severe. On one hand, they had pumped in money to buy water jet machine which was yet to start production and on the other hand, they had to borrow aggressively for the new laser machine. They had already incurred losses on executing orders from Pune. From every side, money only flowed out. There was no single line of inflow of funds. Swamy never gave up. He always believed in the quote, ‘When the going gets tough, the tough gets going’, a favorite from his school days. His conviction on the prospects of the industry was strong. Ever since inception of the company, it had been on his mind to get the future technology at work. His exposure to what was happening around the world and his ability to point out what could be relevant to India had been the drivers of his decisions. “In a way, I feel, we went wrong. We could have gone in for a second laser machine, strengthen our business, hedge the risks of such malfunctions and later, go in for a new technology”, says Swamy.

After the 2002 debacle, Swamy decided that Magod Laser will operate at 70-80% capacity only. Each time they breached this, Swamy added a new machine. A new machine gets added every year at Magod Laser and sailing has been smooth as the company has been proactive. This was decided to ensure that, in case of a machine breakdown, they have a cushion to extend and ensure that the customers are not affected. “In the long run of life, sincerity gets more marks than caliber”, says Swamy. Since then, business has appeared to be simple as they have always stuck to the plan and never fumbled.
Magod Laser, as many people in the industry recognize today, is a pioneer in application of laser technology for manufacturing.

Update as of Dec 2019
Magod Laser has continued its focus on laser based manufacturing, and has added more manufacturing processes like Laser Welding, Laser Cladding, Laser Hardening , Laser Drilling and Metal 3D printing to its portfolio. The business team, number of machines and employees has more than doubled with the expansion of the Jigani unit, and addition of new units at Peenya, Chennai, Dharwad, Dabaspet and Pune (Pune subsidiary named Magod Fusion Technologies).
Today, Magod Laser is India's largest laser cutting and laser welding facility
The unfortunate departure of Swamy's brother Col. MB Ravindranath was a big shock, not just to Swamy and his family but also to the entire community. The systems and procedures that Col built were so strong and forward looking that, as a business, the company withered the shock with no damages. The in house ERP software that Col developed & coded single handed just as a one man army he was, is one of the best in the industry and acts as a lifeline of the company's systems and processes. Col's younger daughter Prarthana Magod has joined the company and is looking after HR Dept.


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