The Tube Investments of India Ltd (TII), part of the $3.03 billion Murugappa group, is planning greenfield facilities to manufacture bicycles, tubes and chains. The company has said it would invest around Rs 600 crore to set up these facilities. Besides, as part of the company’s diversification plan, TII is eyeing metro rail business.
L Ramkumar, managing director, TII, said in 2010-11 the company has reached almost full capacity across all the businesses including bicycles, tubes and chains. The company is planning to increase its capacity by 30-35 per cent, across the segments, in the present fiscal. It will be a combination of both green and brownfield expansions with an investment of around Rs 500-600 crore.
The proposed expansions will be completed and will come into operation by end of the present fiscal and the expansions will be funded through internal accruals and debt.
The Rs 3,130 crore TII consists of the TI Cycles of India, Tube Products of India, TI Metal Forming (including Chains). In bicycles, TII is the second largest manufacturer with popular brands — Hercules, BSA and Philips. TII is the market leader in precision steel tubes and roll-formed car doorframes in India. Also, being the second largest motorcycle chain manufacturer in India, TII is a major supplier to the Indian auto / auto-component industry. In recent times, the company has ntroduced e-scooters.
As part of diversification plan, TII is planning to looking for a partner to manufacture side panels and bodies for metro coaches, said Ramkumar.
TII has reported a turnover of Rs 3,130 crore in 2010-11, a growth of 27 per cent over the previous year. “This was a year of landmarks with good performances from all business segments. Despite capacity constraints in two of our businesses, the company did well to improve its operating profit through a focus on product mix, higher asset and people productivity and benefits of new product introductions,” said Ramkumar.
All the business segments performed well. The good performance in the Engineering and Metal Formed Products businesses was on the backdrop of a strong growth of 26 per cent in the auto industry, he said.