Mazda, US firm in outsourcing pact

Mazda Ltd has entered into an alliance with its former collaborator Croll-Reynolds of the United States.

The facilities of the city-based company will be used by Croll-Reynolds as a full fledged design and manufacturing base for equipment supplied all over the world, officials said.

"The strategic tie-up with Croll-Reynolds will go a long way in increasing our revenues. We expect to post revenues of over Rs 20 crore by the end of this fiscal and aim to double our turnover by the end of 2004-05," said S R Mody, managing director of Mazda.

The company posted a turnover of Rs 15.72 crore in 2002-03.

Mazda recorded sales worth Rs 9.82 crore in the first half of the current financial year and has an order book position of Rs 11 crore.

The value of equipment supplied by Mazda to Croll-Reynolds is about Rs 2.30 crore per annum.

Due to the cost advantage for Croll-Reynolds, it has decided to outsource a majority of the equipment from Mazda, while concentrating on marketing these products worldwide.

"We expect to provide over 70 per cent of all equipment that Croll-Reynolds will market across the globe," Mody said.

He added that, with this alliance in place, Mazda will get additional business to the tune of between Rs 18 and 23 crore over the next few years.

Mazda is into manufacturing of critical control valves for power plants, refineries, other heavy duty machinery, boilers, condensers, cooling towers, recovery systems and large capacity pumps.

It is perhaps the only company in Asia which produces critical control valves for refineries and nuclear power plants, the company officials said.

Formerly known as Mazda Controls Ltd, the company went public in 1993 and has been paying dividends regularly, the company officials said.

It just completed a 10 per cent buyback of equity shares in July last year.

The net worth (capital and reserves) of the company stands at over Rs 7 crore.

"Funding is really not a problem and there is no point in going for raising funds through an issue," S RMody said.

The company also has a tie-up with Kauer Engineering, Germany, for manufacturing speciality valves for power plants.

Only three or four companies globally have the technology and precision for manufacturing hypercritical valves in power plants, even nuclear power plants, the company said.

Mazda pays a royalty of five per cent to Kauer for all domestic sales and and eight per cent export royalty.