Sundaram-Clayton to launch its first overseas plant at a cost of Rs 630 cr

The unit is coming up in the United States and will serve the North American market; operations start in September 2019

Sundaram-Clayton Limited (SCL), the holding company of TVS Motor, inaugurated its first overseas facility the United States, through its subsidiaries. The company plans to serve its customers in North America, its biggest export market. It has invested Rs 630 crore in the plant.

This expansion will establish SCL as a global player from India. The operations will commence by September 2019, said the company.

The US market currently represents about 60 per cent of the company’s exports and 40 per cent of its revenues. 

An on-shore presence will enable SCL to sharply reduce delivery lead times, giving it a competitive advantage in an increasingly demanding market for automotive components.

The facility will produce 1,000 tonnes of castings in the first year of production and will scale the output to 10,000 tonnes in five years. SCL will manufacture a range of high-pressure die-cast and gravity die-cast parts at this facility. 

Lakshmi Venu, Joint Managing Director, Sundaram-Clayton Limited said that the long-term outlook for both the American and the Indian automotive industries is strong. 

In both markets, OEM vehicle makers are focussed on light-weighting and better fuel economy. 

"Our technologies are aimed at supporting this industry trend. Our strategy of expanding in both these markets enables us to support our customers with a more responsive supply chain in an increasingly dynamic world," she said.

Apart from its US facility, SCL has also invested recently in a new plant in Tamil Nadu, India. The company is positive on the long-term strength of its core Indian market as well, and recently opened an additional plant in Oragadam, near Chennai, to service its Indian automotive customers.

SCL is a part of the conglomerate TVS Group, which was established in 1911 in India and has companies worldwide. TVS Group revenue was $8.5 billion in fiscal 2018.

Sundaram-Clayton and its subsidiaries’ revenue stood at Rs 21,575.64 crore in fiscal 2019. This includes India’s third-largest two-wheeler maker TVS Motor Company Limited, its die-casting and plastics divisions. 

Sundaram Clayton Limited has a revenue of Ra 1,932.94 crore and five manufacturing facilities, four in India and one in South Carolina, US. The company has a capacity to produce 74,000 MT/ annum. 

Its die-casting processes include high pressure die-casting, gravity die-casting, low pressure die casting, post casting (shot-blasting, heat treatment) machining and sub-assembly.