Kirloskar capacity expansion on track

The Rs 1,900 crore Kirloskar Oil Engines Ltd (KOEL) was on target with its capacity addition plan at Kolhapur near Pune, scheduled to start commercial production in April 2008.

The plant, with installed capacity of 80,000 engines every year, would cost Rs 500 crore, said Atul Kirloskar, chairman and managing director of KOEL.

This will be its fourth plant after Ahmednagar, Nasik and Pune.

Kirloskar currently produces 180,000 engines per year, and is growing at the rate of 35 per cent in terms of sales for the last two years, and is confident of achieving the same for this year as well.

Its engines were used in land-based applications ranging from tractors to construction equipment.

Western Consolidated Pvt Ltd (WCPL) would be producing generator sets sourcing engines from Kirloskar,and then assembling and marketing the product.

WCPL was upbeat on the growing industrial need for generator sets and had 45 per cent of the total market share in the country, said Vineet Dhingra, managing director of WCPL.

With the boom in the construction sector and the telecom sector also matching the rapid growth rate, the genset manufacturing industry has undergone a revolution, he added.

New customer segments had evolved, including the telecom sector which now requires one genset per telecom tower.

WCPL was an OEM for Kirloskar and looking at a turnover of Rs 100 crore this year from its generator business.

"There are 13 such OEMs who source engines from us", said Kirloskar.

WCPL planned to add a new plant at Sitarganj in Uttaranchal by investing Rs 20 crore including price of land and machinery.

The plant machinery would be imported from Amada of Japan.

This, together with expansion of capacity at the Kolkata unit at Maheshtalla, will take up its capacity from 3,500 gen-sets per year currently to 8000 per year.

The aim was to evolve from a company selling equipment to one delivering customised power solutions, said Dhingra.

"Our revenues are still pitched towards retail over institutional sales, in the ratio of 60:40", he added.

WCPL recently formed a JV with Italian Inter Pump Group (IPG) to manufacture industrial floor cleaners though a joint venture based in Delhi.