The manufacturing plant at Bawal would cater to Hero Honda and Maruti Suzuki.
Ucal Fuel Systems Limited, a Chennai-based manufacturer of carburetors, fuel injection systems and automotive pumps, is setting up an air suction valve and oil pumps manufacturing plant for Hero Honda and Maruti Suzuki at Bawal in Haryana with an investment of Rs 40 crore.
“A majority of this investment is being raised through internal accruals, while we are borrowing the remaining from the Haryana State Industrial and Infrastructure Development Corporation to fund the project. We expect the initial phase of production to start from December 2010,” said PPR Rao, executive director of Ucal Fuel Systems.
Rao was speaking to Business Standard on the sidelines of a national seminar-cum-exposition on new product development organised by the Confederation of Indian Industry here recently. “The capacity of the new plant is yet to be worked out,” he said, adding the company was contemplating adding more products in due course.
Ucal Fuel currently has 10 manufacturing units in India, including three in Chennai and one each in Puducherry and Gurgaon, supplying fuel injection systems for carburetors for two-wheelers and fuel injection parts and pumps for four-wheelers for automobile majors like Bajaj, Hero Honda, TVS, Suzuki and Yamaha.
Stating that the company’s current capacities were increasing as the demand from original equipment manufacturers (OEMs) was picking up, Rao said the company enjoyed a 26 per cent growth this year and was expecting a similar growth next year as well.
Ucal Fuel reported revenues of Rs 400 crore in the last financial year, and expects to cross the Rs 500-crore mark this fiscal on the back of additional supplies to TVS and Hero Honda.
More From This Section
“The revenues were excluding those of our US subsidiary Amtec Precision Products, which we acquired in 2003. With the US automobile industry hit hard by the economic slowdown, Amtec shrunk in size. However, it has started making profits since the last nine months. Its revenues will be slightly better than last year’s $25 million (approximately Rs 117 crore),” Rao said.
Ucal’s scrip ended the trade at Rs 87.50 on the BSE on Friday, down 0.11 per cent, over the previous close of Rs 87.60.