Liners India woos German firm for tie-up

Company advances revamp plans

City-based Liners India Limited, a Rs 33-crore manufacturer of engine cylinder liners, is in talks with a German engine component manufacturing company for a strategic alliance.

The company, which has marquee customers like Ashok Leyland, Mahindra, Tatas, Simpson and Company and Eicher, is also participating in a tender called by the General Motor (GM), USA, for supply of liners.

Liners India Limited managing director S Ganesh told Business Standard that the company had also decided to ramp up production capacity this year itself instead of in the year 2005, as was originally envisaged. Ganesh had earlier in April this year announced that the company would increase its production capacity by setting up a new plant in Chennai in 2005.

"The capacity expansion ahead of schedule became necessary to cope up with unprecedented increase in demand from customers for supply of products. This apart some of our customers also wanted to advance the dates of delivery of products," Ganesh said.

"We took it as a challenge and decided to expand our production capacity of the Vijayawada plant on a war footing at a cost of Rs 3 crore, instead of in Chennai. Work had already begun in the Vijayawada plant and the unit would begin additional production in November or December this year," he said. The new plant in Chennai would be commissioned in the middle of next year.

The Vijayawada plant, he said, would additionally produce 300 million tonnes (mt) of molten metal and 800 mt of Liners products, to be supplied to foreign customers and domestic vehicle manufacturers.

Liners India's order book position was full, the company has received orders 30 per cent over and above its existing production capacity, and it stopped taking fresh orders from February.

The company, which produces two million cylinder liners, was negotiating a strategic alliance with a giant German engine component manufacturing company, he said.

"The company is also participating in a tender called by the General Motor (GM), USA, for supply of liners for a new engine. The GM Technical Committee would consider its bid in a couple of days. If the company gets that tender, it means mopping up of a massive and additional investment of $2.5 million to meet GM demand."

He said the company achieved a turnover of Rs 33 crore, including exports to Europe, during 2003-04. It recently won a prestigious award from the Federal Mogal Corporation.