Gates India plans Rs 15 cr investment in Lalru plant

Driven by the boom in infrastructure development in the country, Gates India Limited, one of the largest hose manufacturers in India is increasing production in its Lalru facility.

The company has decided to pump in about Rs 15 crore at its Lalru plant, which is the largest hydraulic hose manufacturing plant of Gates Corporation in Asia.

Volumes have more than doubled in last three years, said Mukesh Malhotra, president of Gates India Limited. Talking to Business Standard, he said the tremendous growth of infrastructure in the country had created a big market for their products.

"To meet the burgeoning demands of our clients, we have decided to add the capacities at our state-of-the-art plant at Lalru" Malhotra said.

The company supplies to all major players in construction and heavy equipment manufacturing, mining sector, government sector, steel manufacturing and cement plants.

The company put up an assembly unit in Faridabad last year where coupling is added to a hydraulic hose to provide direct supply to OVMs. "We supply subtantial quantities to the JCB and our assembly unit in Faridabad would help us to cater to the units located near Delhi," he said.

Gates India has another unit in India at Chinnai that manufactures automotive belts.

"Markets are expanding. There is a sprut in demand in domestic and export markets. Our volumes in domestic markets are increasing due to growing construction activity and in global market the total demand is stagnant but our market share is increasing," he said.

The Lalru plant manufactured 3 billion meters of hyraulic hose in 2003. The annual production now stands at 6 billion meters. After the completetion of expansion process by the end of this year about 9 billion meters of hose will be produced.

About 40 per cent of the total output from Lalru plant is sold in the export market.

The company has a turnover of Rs 80 crore and expects to register more than Rs 100 crore of turnover next year.

Unlike other multinationals that have their corporate offices in the metors, Gates India Limited has its corporate office in Lalru, a small town near Chandigarh. The unit is spread over an area of 35 acres and has a covered area of 2 lakh square feet.

According to Malhotra, about 230 people are employed in the unit and most of them are skilled labourers.

He apprised that rubber and steel are the main inputs for hydraulic hose and escalating steel prices in the past have put pressure on profit margins.

"The inadequate and erratic supply of power is a cause of concern for the industry in Punjab," said Malhotra. The company has a centralised research and developement centre at its headquarters in Denver, Colorodo, USA.