Fenner India plans buyouts

The Chennai-based industrial and automotive V-belts, oilseals and power transmission accessories manufacturer Fenner India Ltd is planning acquisitions to achieve its target of Rs 500 crore turnover by 2008-09.

C Suresh Kumar, vice-president, sales and marketing, Fenner (India) Ltd said, "The board is evaluating plans for acquiring companies operating in the industrial belts and oilseals segment. Three overseas companies and a couple of domestic companies are under consideration. The board is also considering the option of a greenfield project."

The company would execute the plan - acquisition or greenfield project - within the next two years, confirmed Kumar. "We will be expanding in all the segments. The company is eyeing Rs 500 crore turnover by 2008-09 against last year's Rs 285 crore. The industrial belt division is likely to contribute 80 per cent of the targeted turnover," he said.

The company is eyeing 20 per cent growth in its gross profit from last year's figure of Rs 20 crore. Fenner India made a capital investment of Rs 30 crore during the last two years, he noted.

The company would now focus on the power transmission accessories segment. "We have been the market leader in manufacturing belts used in industrial power transmission. We will now be focusing on power transmission accessories. By 2007-08, the company is targeting a Rs 50 crore turnover from power transmission accessories that currently registers Rs 20 crore," he said.

The power transmission accessories market size was around Rs 100 crore, primarily dominated by the unorganised manufacturers, pointed out Kumar.

The company is also planning to foray into the automotive accessories market.

"The company has prominent presence in the automotive belts segment. We are now planning to get into belt-related automotive accessories within the next one year," he said.

Fenner India will also increase its exports significantly within the next few years.

"In 2004-05, the company exported products worth Rs 30 crore. Our target is to increase our export income to Rs 100 crore within the next four years. Australia, South Africa and Latin American countries will be the target countries," Kumar said.

The company would spend around Rs 6 crore for products and brands promotion activities, he added.