Amara Raja to invest Rs 88cr in expansion

Backed by good demand, Amara Raja Batteries will be expanding its automotive batteries capacity by 50 per cent to 5.4 million at an investment Rs 88.2 crore.

A company press statement said that the the board of directors of Amara Raja Batteries had approved the expansion. The ramping of the capacity to 5.4 million batteries from 3.6 million batteries is expected to be completed by the second quarter of financial year 2008.

Gopal Mahadevan, chief financial officer, Amara Raja, said, "Our forecasts indicate a very strong demand for our products in the coming years and we need to be geared up to meet it. In addition to internal accruals, we plan to leverage our zero debt status to fund the expansion."

Jayadev Galla, managing director, said, "We have been experiencing high growth in our automotive battery business. We have been extremely successful in expanding original equipment business, aftermarket replacement and automotive exports. We have been consistently scaling up capacity to gear ourselves to tap the growth we foresaw a few quarters back."

"We need this expansion to meet market requirements in the next financial year. Once this expansion is completed, the turnover of our company should exceed Rs 1,000 crore," he added.

Ramachandra N Galla, chairman, said that the company had been growing significantly and the one million automotive battery facility commissioned in September 2001 would now grow to 5.4 million units by the middle of next financial year.