Steelbird in expansion mode, to invest Rs 40 crore

Steelbird, one of the largest companies selling branded helmets in India, is preparing to go ahead with the second phase of its expansion at Baddi in Himachal Pradesh.

The first phase of the plant, completed with an investment of Rs 13 crore, can produce 9,000 helmets a day. After the completion of the second and final phase, the production of the unit will double to 18,000 units.

According to company sources, Rs 40 crore has been earmarked for this expansion project and this is going to be the biggest helmet-manufacturing plant in the world.

Talking to Business Standard in Chandigarh, the managing director of the company, Rajeev Kapoor, said the market for branded helmets had been overshadowed by un-branded ones.

However, he maintained Steelbird was the market leader in the branded segment but the market share of the ISI-marked helmets was only 20 per cent of the total market size.

Kapoor said of late, the ministry of shipping, road transport, and highways had issued a regulation, according to which at the time of the purchase of two-wheelers, the manufacturer of the two-wheeler would supply a protective headgear/helmet, conforming to specifications prescribed by the Bureau of Indian Standards.

Moreover, the government is losing substantial revenue as excise duty and VAT are charged only on manufacturers in the organised sector, according to him.

Kapoor said the company sold about 200,000 helmets in 2004-05 and about 144,000 helmets in the first quarter of this financial year.

"Our helmets cost between Rs 399 and Rs 10,000, but those that cost around Rs 600 sell the most," he said.

According to Kapoor, the company will be able to save about 25 per cent of cost on account of tax incentives offered in the hilly states and the same would be passed on to the consumers.

He said Chandigarh had a large number of two-wheeler riders. But sales here were lagging behind because ISI-marked helmets were not mandatory over here, he said.

The company posted 400 per cent growth in 2004-05 and expects to grow at 1,000 per cent if the new regulation is implemented in the current financial year. Steelbird has a technology tie-up with Bieffe of Italy. Kapoor said the export turnover of the company was about Rs 8 crore in 2004-05.

"Europe is the most lucrative market for us, and so we do most of our business there. But creating a brand name in Europe is a very expensive proposition so we supply to their own (European) brands," he said.