Bharat Forge sets aside Rs 400 cr for expansion plan

8th AUTO EXPO 2006

Bharat Forge plans to invest over Rs 400 crore for setting up a greenfield facility in India and set up development centres in foreign locations for product design and development.

"We will be completing our current phase of expansion by March 2006 and will go for a greenfield facility, which will involve investment of over Rs 400 crore, about an year after that," Bharat Forge Executive Director Amit B Kalyani said at the Auto Expo.

He said the new facility would be for larger products, sub-assemblies and value-added products.

The company is currently doubling the forging capacity at its Pune unit to 2,50,000 tonne. This is likely to be completed by March 2006. "We have invested about Rs 600 crore at Pune," Bharat Forge Chairman Baba Kalyani said.

The company, which has facilities in Europe, North America and China, expects to have a capacity of 6,00,000 tonne after the expansion.

The chairman said Bharat Forge was moving up the value chain. "We are making attempts to move from contract manufacturing to a full-fledged supplier of services. We are getting into co-development with our customers and do testing of prototypes including fatigue testing," Kalyani said.

The company's engineering development centre in India has around 50 engineers and it is opening such centres at off-shore locations as well. "We plan to have development centres in Germany, Sweden, North America and China," he said, adding that the China unit would be equal in size to the Indian centre.

Asked if Bharat Forge was looking at further acquisitions in line with its plans to become the largest forging company in the world, Kalyani said there were "no immediate plans".

The last acquisition by the company was in December last year when it signed a joint venture contract with China's Faw Group to acquire its forging business.

The company is today the second-largest forging company in the world with manufacturing facilities across nine locations "" two in India, three in Germany and one each in Sweden, Scotland, and North America.

To facilitate its global expansion plans, the company had raised 100 million dollars through GDR and 120 million dollars through FCCBs in April last year.

Revenues in fiscal year 2004-05 stood at Rs 2001 crore while consolidated PAT was at Rs 201 crore.