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Seinsa, a SME Internationalization Model

Seinsa, a Reference of a SME Internationalization Model

After twelve years of business the subsidiary of Seinsa in India (Seinsa INDIA Private Limited) is a “consolidated company, in growth, capable of self-managing and self-financing itself, and what is most important, it has allowed us to enter other markets such as the United States, where it was impossible to compete with China,” points out José Antonio Espinosa, Director General of Seinsa, a family company with headquarters in Eugui, Spain, manufacturer of parts (rubber, rubber-metal and thermoplastic) and repair kits for automotive brakes, piston brakes, clutches, transmissions and steering.

Following the advice and experience of close individuals and the help of Iñaki Soto, the manager of Indversis, Seinsa decided to begin operations in Chennai, in the state of Tamil Nadu (southeast India) in 2005, strengthening its internationalization project initiated in the 90’s. Today 98 % of Seinsa’s sales are to foreign markets.

INTERNATIONAL VISION

 “The key to Seinsa’s internationalization is the vision of José Antonio Azcarate, and his support for exporting during an era when it was not common for companies and less among local SMEs to grab their suitcases and catalogues and visit fairs and potential clients outside of Spain, or drive programs such as the “Plan 3-500”, which established achieving sales for a value of 500 million Pesetas in exports by 2003, which we greatly surpassed,” remembers Espinosa.  A bet made on solid foundations which required the creation of a strong managerial team, the establishment of annual plans to reinforce manufacturing, the incorporation of new products and the development of the sales area.

The next step, in and around 2003, was to deal with globalization. The opportunities presented by the emergence of new competitive countries in Asia and resolving the doubts on offshoring, common at that moment in the competitive automotive sector. The way to tackle the India project, allowing Seinsa to face the potential threat of the loss of employment, was to double its personnel from 60 positions at that moment to the current 135, prompted by the synergies that the project generates. The key was José Antonio Azcarate’s vision, perseverance, the creation of a team and the availability of resources. “Sure there were doubts, but the group led by Ander Azcarate worked themselves down to the bone to make the project a reality,” emphasizes Espinosa.

Seinsa INDIA today employs 100 people, 30% being women, the installations have doubled to cope with the growth. It has 9 injection machines which will be 10 by the end of the year and its own rubber mixing system, allowing it to obtain homogeneous raw material, certified by the ISO TS 1649, and being able to answer the demands of the original equipment sector. It manufactures long series, around 15 million rubber parts and manages 100 product references. 70% of its production is destined to the United States.

CULTURAL FUSION

“The factory is conceived as a replica of Eugui in the quality, production and processes, we have the possibility to offer the same catalogue, independently of where the part is manufactured. The strategy is common and the goal is for the two plants to be compatible and complimentary”, points out Espinosa. “At a level of cost and long series India prevails, but it is prepared to deal with any production, in fact, on many occasions we balance the work load. There is a direct relationship, the team is Indian and management is headed by Ignacio Gallego and Ander Azcarate and there is a rapport at all levels: management, financing, production and quality. Daily communication is interdepartmental.”

Seinsa’s industrial culture has had to fuse with the uses and customs of India. Its adaptation has affected the shifts and work hours, respect for the castes in the hierarchical organization, the prohibition of night shifts for women, or work positions for machinery. “Our policy on women is understood, fathers who only have girls are supported economically so that they may educate them, there are positions which, because of their ability, are only carried out by women and there is a group which has obtained a certain amount of power in the organization, where logistics management is carried out by them. In addition, the company pays all the workers’ lunches, medical insurance, support for children who are studying, allows for temporary leaves of absence for family problems and a general policy to personalized attention to workers. An atmosphere of confidence has been created which provides equality in the contributions and suggestions of workers in the improvement of the organization and production. The success of this policy gives an idea to the fact that all the area heads and most of the workers have been there since the first day despite the levels of staff turnover in the region.

MODULATE GROWTH

The business level of the India plant is growing 20% annually, like what is occurring in Eugui. “Right now,” recognizes José Antonio Espinosa, “if we were to let ourselves be led by the US clients, we could double production but would be a victim of our own success, we wouldn’t be capable of managing the growth. Growth has to be regulated, take small steps, look forward and set advancements, placing priorities on client service and satisfaction.”

“Competing with China in the US isn’t easy, but the US market values the delivery period and product quality, providing that the Chinese supplier’s price is maintained because many of the operations are auctioned”, points out Ignacio Gallego. “Additionally,” adds Espinosa, “operating in this market has allowed us to discover parts which US clients do not want to manufacture in China or India which we are capable of being manufacturing in Eugui.”

Seinsa Eugui, which has also obtained the ISO TS 1649 certification, has had strong development during the process. Today, in addition to having doubled its workforce, it has a second plant in Egüés, Spain, dedicated to logistics in addition to an important collaboration with logistics provider Disayt. It has expanded its multi-make catalogue to 3,800 references. It manufactures 50 million parts and 5 million kits annually. Its sales this year reached 20 million euros which went to Eastern Europe (70%), the US (15%), Northern Africa, South Africa, Chile Colombia, Ecuador and Oceania. This year Seinsa India’s sales are forecasted to be 2 million euros.