Chennai: The Chennai-based Rs.350-crore turnover Fenner India Limited is planning to manufacture engine mounts and dampers in partnership with a European company.

The company that makes oil seals, V-belts and power transmission products (pulleys, bushings and couplings) finds a strong potential for engine mounts in the growing domestic passenger car industry.

"The initial production will be for the European company as a buy back arrangement. We will later target the domestic market," says V Abraham, senior vice president (technology and development).

According to him Fenner India is likely to sign the deal soon with its new European partner and the initial order will be for around 8 lakh pieces.

"The company would invest around Rs3 crore for this project. The production will be at our Madurai plant in Tamil Nadu," he adds.

At present dampers are made mainly by small-scale manufacturers, says Abraham.

Unlike the conventional dampers and engine mounts that are made by fusing rubber and metal, Fenner India will be making sophisticated hydro mounts that are filled with liquid to absorb the engine vibrations.

Meanwhile the company has altered its earlier plans of locating its new belt and oil seal plants.
Fenner India has decided to put up a new belt factory near Madurai instead of Hyderabad and postponed the construction of oil seal plant at Uttarakhand to next year.

"We already have a belt plant in Madurai. With Tamil Nadu being the hub of automotive industry now we felt it is better to have the plant here," explains Abraham.

In the first phase the plant would involve an outlay of Rs.25 crore to make 2.5 million pieces.
"Production will start some time this September. The second phase would involve a capex of Rs15 crore while the production would be doubled to 5 million pieces by 2009," says Abraham.

The Uttarakhand plant would make oil seals for the replacement market as well as for Hero Honda motorcycles.

"Finding the core team for three new plants all at the same time was difficult and hence deferred the Uttarakhand plant by a year," he adds.

In July 2007, Fenner India commissioned its state of the art oil seal plant at Sriperumbudur near Chennai to supply to two-wheeler manufacturers.

The Rs25-crore plant now has a capacity to make 3.5 million pieces per month and will operate at full capacity in a couple of months.

"We have also set up a new research and development (R&D) centre manned by 35 engineers at Sriperumbudur," Abraham says.

The company hopes to close this fiscal with a turnover of around Rs400 crore.
The slowdown in the two-wheeler has dampened Fenner India's turnover projections.

As a derisking strategy the company is now looking at the replacement market for oil seals and also supplies to tier I component vendors.

In addition Fenner India is also focusing on the industrial oil seal market, now catered by small players.