Grundfos Pumps plans SEZ

Grundfos Pumps India, one of the 71 companies of the Danish firm Grundfos Group, which claims to be the world's second largest pump manufacturer, is planning to set up a Special Economic Zone (SEZ) in India to export pumps.

The company has zeroed in on Gujarat or Rajasthan to set up the SEZ. However, the company does not want to rush in on the project and planned to observe the performance of the existing SEZs before it comes out with one of its own.

The company, which is presently spending 10 per cent of its annual sale in importing components from China, is also looking at giving that business to Rajkot-based component manufacturing industry.

However, the company finds the quality of the Rajkot component manufacturers not as good as that made by the Chinese.

Rangnath N K, CEO, Grundfos Pumps India, told Business Standard, "We are looking at setting up an SEZ either in Gujarat or in Rajasthan to develop a major assembly facility and also to produce and export components as well as the assembled pumps."

On the locations, Ranganath said, "We will either set up the SEZ in Gujarat or in Rajasthan depending on the availability of land. However, with Gujarat offering port facilities, it is our first preference. The project is likely to include an assembly line and also we will look at manufacturing of pump components."

However, the company is not rushing into the project as it wants to observe the performance of the existing SEZs in the country and the policy level decisions.

"The SEZ is certainly on our minds but we are not rushing into the project. We have no hurry for the project. We will observe the performance of the existing SEZs in the country and observe the policy level decisions and then go in for the project," Rangnath said. Grundfos India also supplies its products to neighbouring countries like Bhutan, Bangladesh and Maldives.

The company is also looking at providing business to the Rajkot-based component manufacturing industry.

At present the business goes to China. "We are negotiating with some Rajkot-based component manufacturers for manufacturing our components especially cast dyes. At present we import these components from China. We look at Rajko-based industry as a strong option to the China provided they give better or as good quality as the Chinese."

"China, in many ways, is ahead of the Rajkot-based industry including quality of products and pricing. In pricing Rajkot is much nearer to the Chinese manufacturers though they need to improve on the quality. We are in negotiations with a few manufacturers in Rajkot," he said.

Ranganath added that Grundfos India spends 10 per cent of its total annual sales in imports of components from China. The company has registered a 20 times growth in the last seven years. "In 1999, our annual sales were worth Rs 5 crore which grew up to Rs 110.4 crore in 2006.

Grundfos group produces over 10 million pumps per annum. Its product range includes circulator pumps, submersible pumps and centrifugal pumps. The company claims to be the world's largest manufacturer of circulator pumps, covering approximately 50 per cent of the world market for these pumps.

In addition to pumps, Grundfos manufactures electric motors for the pumps and has a considerable production of electric motors for separate merchandising.