 "We are looking to achieve Rs 500-cr turnover in 2-3 yrs: Viraj Kalyani")
Pune-based Kalyani family maybe fighting a court battle for family assets, but the younger generation is equally focused on business growth. The 25-year-old executive director of Kalyani Forge (KFL) Viraj Kalyani – brother of Sheetal Kalyani, who has filed a civil suit against uncle Baba Kalyani, chairman and managing director of Bharat Forge – is busy shaping expansion plans for his company. Kalyani, who joined the company as executive vice-president in 2012, refrained from commenting on the feud. In an interview, he tells Hrishikesh Joshi about KFL’s growth strategy. Edited excerpts:
A lot has been talked about Kalyani Forge (KFL)'s transformation in the past three years, could you elaborate on this?
There is a strong need for transformation because of changing market conditions at the global level and in India as well. And we have consistently managed to be a globally-competitive company taking a lead in quality and technology. But, at the same time, we don't want KFL to be a mass producer of components or just a supplier company.
We are setting up new benchmarks for quality of products. We are looking to achieve a turnover of Rs 500 crore through organic growth in the next two to three years, from the current Rs 250 crore, by entering into new product ranges. We are expanding our machined components capacity by 25 per cent, apart from concentrating on process improvements and removal of non-value adding activities through Lean Management Systems as a strategy to grow aggressively.
You were planning to invest Rs 200 for expansion, what is the status?
We have already invested around Rs 25-30 crore in the first phase. This is mainly for the modernisation of our manufacturing facilities in Pune. We are focusing on organisation architecture, system enhancement, culture development, strategic decision-making and customer orientation. We have a very low debt-equity ratio and have improved cash flow significantly.
Bharat Forge has been diversifying into other sectors, would KFL also diversify into non-automotive sectors?
We are not going to follow this trend. Diversifying the business is definitely a part of the strategy. We see lot of strength in automotive sector. Different markets will behave differently. It does not mean that we will swing from one to another. At the same time, we continue to leverage our expertise and experience in the auto sector as it has tremendous long-term potential in India and lots of headroom for growth, notwithstanding the current slowdown.
At the same time, we are exploring new emerging sectors of our economy such as mining, construction, infrastructure and railways.
How much does the automotive sector contribute to your business? What about exports?
More than 70 per cent of our business comes from the automobile sector. We are also growing the industrial segment. We have had a presence in the railways sector for the past 15 years and have been supplying components for metro rail projects around the world. As of now, we are not very keen on the defence sector. At present, exports are 25 per cent of the total business.
What is your strategy for international markets?
We are setting up a new company called Kalyani Europe in Germany to cater to the European market. Currently, KFL has a marginal presence there, but with this new entity, we will be putting more efforts for overseas markets. Our effort is to improve export contribution in future.
A lot has been talked about Kalyani Forge (KFL)'s transformation in the past three years, could you elaborate on this?
There is a strong need for transformation because of changing market conditions at the global level and in India as well. And we have consistently managed to be a globally-competitive company taking a lead in quality and technology. But, at the same time, we don't want KFL to be a mass producer of components or just a supplier company.
We are setting up new benchmarks for quality of products. We are looking to achieve a turnover of Rs 500 crore through organic growth in the next two to three years, from the current Rs 250 crore, by entering into new product ranges. We are expanding our machined components capacity by 25 per cent, apart from concentrating on process improvements and removal of non-value adding activities through Lean Management Systems as a strategy to grow aggressively.
You were planning to invest Rs 200 for expansion, what is the status?
We have already invested around Rs 25-30 crore in the first phase. This is mainly for the modernisation of our manufacturing facilities in Pune. We are focusing on organisation architecture, system enhancement, culture development, strategic decision-making and customer orientation. We have a very low debt-equity ratio and have improved cash flow significantly.
Bharat Forge has been diversifying into other sectors, would KFL also diversify into non-automotive sectors?
We are not going to follow this trend. Diversifying the business is definitely a part of the strategy. We see lot of strength in automotive sector. Different markets will behave differently. It does not mean that we will swing from one to another. At the same time, we continue to leverage our expertise and experience in the auto sector as it has tremendous long-term potential in India and lots of headroom for growth, notwithstanding the current slowdown.
At the same time, we are exploring new emerging sectors of our economy such as mining, construction, infrastructure and railways.
How much does the automotive sector contribute to your business? What about exports?
More than 70 per cent of our business comes from the automobile sector. We are also growing the industrial segment. We have had a presence in the railways sector for the past 15 years and have been supplying components for metro rail projects around the world. As of now, we are not very keen on the defence sector. At present, exports are 25 per cent of the total business.
What is your strategy for international markets?
We are setting up a new company called Kalyani Europe in Germany to cater to the European market. Currently, KFL has a marginal presence there, but with this new entity, we will be putting more efforts for overseas markets. Our effort is to improve export contribution in future.