|
Chennai: The Chennai-based Fenner (India) Limited, manufacturing V-belts, oil seals and power transmission products (pulleys, couplings and bushings) has decided to set up a plant in Uttaranchal to take advantage of the tax breaks. The company plans to produce oil seals there and has bought land for the purpose. "We expect to start the plant construction sometime in 2007 and the outlay is around Rs20 crore," says president and director L Ramkumar. But it is not the only project that he is busy with. It is going to take atleast two years for Ramkumar to heave sigh of relief given the projects that are lined up for execution. As announced earlier, the company will soon start construction of its state-of-art new oil seal plant in Chennai. "The bhoomi puja will be on 2 October 2006, and the plant will be completed by May 2007," he says. The company has placed orders for nearly 70 per cent of the machinery for the new plant. As regards the proposed belt plant in Hyderabad, tenders will soon be floated and the construction is expected to start in June 2007. The construction of new plants apart, Fenner India is also modernising its oil seal plant in Chennai. The company has bought latest presses and is looking at different kinds of mouldings. Fenner India has also changed the layout of its Madurai plant. "We have budgetted around Rs15 crore for modernising our production facilities." Meanwhile the company continues its scouting for a suitable metal or rubber-based auto component business to acquire. The company had earlier announced that it was setting aside Rs100 crore for this purpose. "We did talk to couple of prospects in India, Europe and Far East and visited some plants. But nothing suited our needs. We are still on the look out." After two rounds of restructuring - the latest being last year and the first one was in 2004 - Fenner India is a focussed company today. Last year the company merged its subsidiary BMF Belting Ltd with itself while hiving off its Rs80-crore turnover textiles business into two companies - Modern Cotton and Southern Spinners. However, the restructuring exercise had its impact on the company's export market. Last year the company''s exports were flat as it was busy consolidating its existing business lines. "During the current fiscal the company has grown its export sales by 35 per cent. Last year the turnover was around Rs300 crore. The target this year is to grow the business by at least 15 per cent," remarks Ramkumar. However the one threat he has to tackle in the near future is the entry of foreign companies into India. Several Japanese and American companies are showing interest in setting up a production base in India. Agreeing that as a major challenge Ramkumar says, "We have a good distribution network and it would take several years for a new entrant to build one like that." According to him, the textiles business is doing well and nearly 50 per cent of the yarn production is exported.
|
