Bharat Forge eyes 40% revenue from non-auto parts

Bharat Forge is targeting 40 per cent of its total revenue from non-automotive components in the next three-four years, Chairman and Managing Director Baba Kalyani said.

Currently, the company derives around 18 per cent of its revenue from this segment.

"We aim to be the global leader in non-automotive components business in the next five-seven years," Kalyani said.

He was speaking after signing a pact with the Maharashtra government for investing up to Rs 500 crore in a forging unit in Baramati.

The company has already committed Rs 350 crore to the project and will invest Rs 150 crore more by the year- end, Kalyani said.

This will be the company's 13th unit and will have a capacity of 30,000 MT per annum.

"Operations in Baramati unit will start in June and we will ramp up the production to 100 per cent by June 2009," Kalyani said adding at full utilisation the plant will employ 1,200 workers.

The non-automotive-component-making unit, to be spread over 100 acres, will manufacture safety components for aerospace, marine, rail, power, energy, mining and construction equipment.

Bharat Forge, based in Pune, already has manufacturing operations across 12 locations in six countries""four in India, three in Germany, and one each in Sweden, Scotland, the US, and two in China.

On February 27, the Kalyani group company's board approved raising Rs 300 crore through issue of convertible warrants to promoters, and up to Rs 400 crore via external commercial borrowing.

The company has no further plans to raise funds and will finance growth plans in the medium term through internal accruals, Kalyani said.

In February, Bharat Forge formed a joint venture with NTPC for power equipment manufacturing.

The company has formed a special group to study the project after which the company's board will decide on location of the unit and investment in the next two months, Kalyani said.

"Location near port will be good but is not necessary, as most existing power equipment plants are situated on mainland," he said.

The Cabinet Committee on Economic Affairs today removed the investment ceiling of Rs 1000 crore for NTPC in new JVs or overseas subsidiaries for setting up power projects.

Bharat Forge holds 51 per cent in this power equipment manufacturing joint venture.