Banco plans to double its production for global market

Banco will invest upto Rs 20 crore on EOU

The Banco Products (India) Limited will double its aluminum radiator production by next financial year 2006-07 to cater the European market demand. Company will add more 4,80,000 units per annum and will compete the low-priced Chinese and Korean aluminum radiator manufacturers.

The company will set up a 100 per cent export oriented unit (EOU) with an investment of Rs 20 crore out of which rupees eight crore has been financed by banks. The EOU will be operational by December. The quality is at par with the Chinese and Korean product, but price is the main hurdle.

"To fight world class companies in radiator business, we are coming up with the EOU that will allow us to produce competitive price products" said Ravindra Biswas, executive director of Banco Products (India) Limited, situated in Vadodara.

Company has not focused domestic market as many MNCs have entered into the industry. A large chunk of Banco's market share has been eaten up by new MNCs, claimed Biswas.

But with three clients "� Mahindra & Mahindra Limited, Ashok Leyland and Tata Motors, company holds 20 per cent market share in automobile industry for its copper brass radiators. Company annually produces 3,00,000 and 4,80,000 units of copper brass radiators and aluminum radiators respectively.

While in European market, industry estimates the demand of around 20 million of radiators and 30 million for original equipment spare (OES) radiators annually. "To capture market share in Europe the company has to be price competitive" explained Biswas.

"Later, we will enter into the American market with low margin," admits Biswas adding that they currently market in Africa, Middle East, Europe and South East Asia.

Banco exports 1,80,000 units annually to Europe. "We are planning to double the export by next year and has a plan of cost reduction" said Biswas. The present EOU will be a mechanized work to reduce the labour cost which is very high.

Further it has installed and commissioned Control Atmospheric Brazing (furnace) with an investment of rupees four crore which will led to surge in low cost output.

In power generation, Banco's market share has increased substantially to 50 per cent. It will also launch a new product in multi-layer steel gasket series very soon. The company produces 37 million gaskets per month with 30 per cent domestic market share while it has production capacity of 60 million gaskets per month.

"The company witnessed growth in export by 25 per cent last year and expects similar in future" said Biswas.