Sunday, January 24, 2010

Bharat Forge to invest Rs 1,500 cr in non-auto biz


Looking ahead

The investments will be made in the next three years

Foray in non-auto biz complete with launch of ring rolling facility

Power equipment manufacturing plant set up with Alstom at Mundra



Manu P. Toms

Baramati, Jan. 4

Bharat Forge Ltd plans to invest Rs 1,500 crore to expand its non-automotive business.

Mr Baba N. Kalyani, Chairman and Managing Director of Bharat Forge, said the investments will be made over the next three years. He said that the fund will be raised partly through internal accruals and the balance through debt and equity.

He was speaking on the sidelines of the inauguration of the company's Ring Rolling facility at Baramati in Maharashtra, on Monday. The new plant will make rings for sectors such as wind energy, defence and oil and gas.

For Bharat Forge, which had a turnover of Rs 4,850 crore in last fiscal, about 80 per cent of the revenue comes from its supply of equipment to automotive manufacturers and engine makers while the rest comes from non-automotive sectors.

Going forward, the company aims to increase the revenue share from its non-automotive business to 40 per cent.

Mr Kalyani said that first phase of the company's foray into non-automotive business is complete with the commissioning of the Ring Rolling facility at Baramati. Bharat Forge has invested Rs 500 crore in the first phase which includes the setting up of an open die press in Pune and a crankshaft and ring rolling facility in Baramati. The crankshafts and rings are manufactured for locomotives, power plants and construction equipment.

“The first phase was to make parts up to 40-50 tonnes. The second phase is to take this to up to 500 tonnes,” he said.

“This new facility will act as a catalyst to further accelerate Bharat Forge's revenue growth and de-risking its business model besides diversifying its non auto business. We have received strong customer response for domestic and international applications,” said Mr Kalyani.

Bharat Forge is now setting up a power equipment manufacturing plant jointly with French company Alstom at Mundra in Gujarat.

“We have just started construction of our plant in Gujarat to manufacture turbines and generators up to 800 MW capacity,” said Mr Kalyani.

The Mundra facility targets business from the nuclear power sector as the country is gearing up to set up many more nuclear power plants.

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