Sundaram Clayton Ltd, part of the TVS Group and holding company of the country’s third largest two-wheeler company, TVS Motor, plans to invest around Rs 100 crore. The investment includes the cost of setting up a greenfield facility at Oragadam, for an outlay of Rs 40 crore.
The facility will manufacture heavy truck parts and other automotive components including pipes, brackets and aluminium die-casting.
Speaking to Business Standard on the sidelines of company’s Annual General Meeting, held in Chennai, company’s chairman Venu Srinivasan said the investment will spread over for the next two years.
The company has secured orders from customers including Daimler India, Daimler EU and Nokia Siemens during the year. New orders from existing customers — Cummins, Volvo, TVSM, Wabco-TVS, Hyundai, Honda and Ford -- were also obtained in 2009-10.
“These orders are expected to carry a cumulative potential of Rs 375 crore in the next five years,” he said.
To cater to the demand, the company is planning to set up a greenfield facility at Oragadam, an automobile hub of Tamil Nadu located 45 kms from Chennai. The facility will manufacture heavy truck parts and other automotive components including pipes, brackets and aluminum die-casting.
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He added, the company has set a target of Rs 725 crore for the present fiscal and Rs 1,000 crore turnover in the next two years. The company’s sales remained stagnant at Rs 492.67 crore in 2009-10 as against Rs 492.36 crore, a year ago.
Srinivasan said, the demand for commercial vehicles in the US and Europe continued to be depressed.
North American class eight trucks market witnessed a negative growth of 42 per cent, clause 5-7 trucks dropped 38 per cent. European medium and heavy trucks also reported a 60 per cent drop.
“This had resulted in the company reporting a 12 per cent drop during the fiscal to Rs 172.72 crore.
During the present fiscal the company has set itself a target to increase exports to Rs 200 crore from Rs 172.72 crore.
“Key export markets of the company (the US and Europe) are expected to grow moderately during 2010,” he said.