More Pune companies join MNC club

If the software entrepreneurs are the poster boys of Indian exports, the steady growth in the manufacturing sector in the past couple of years has encouraged quite a few players from the sector to look for greener pastures overseas.

Importantly, these players are looking beyond the presence in foreign countries in the form of a marketing company or a representative office, to actually establish their own manufacturing facilities or take over existing ones.

Leading the pack is the world's second largest forgings manufacturer Bharat Forge Limited. The company has, over the past couple of years, acquired businesses overseas to create a chain of companies in three continents; Europe, America and Asia.

The company has established it presence in China in the form of a joint venture the country's largest automotive group FAW Corporation where it holds a majority 52 per cent stake.

"One feels proud to see the Indian tricolour in a country like Germany or U.K.," says Bharat Forge chairman Baba Kalyani. And the numbers his company has turned out bear this pride out. The consolidated revenues of the company in the financial year 2005-06 comprised Indian revenues of Rs 2,109 crore whereas the revenues outside the country amounted to Rs 3,085 crore, nearly 50 per cent more than the home revenues.

Kalyani is itching for more, yet would like to play the waiting game as he feels the major restructuring of the automotives sector in the United States will throw up interesting opportunities for acquisition. "The automakers in the US have shown some signs of a change in their vendor development approach and we, with our size, stand a good chance to work with them," Kalyani points out.

He adds that the company will soon shift one of its Germany-based plants to the US. Among the positive fallout of the strategy is the advancement of Kalyani's target of becoming the number one forgings company in the world.

Also on the MNC trail is two-wheeler major Bajaj Auto Limited which has recently set up a joint venture in Indonesia to make two and three wheelers.

In fact Pte Bajaj Auto Indonesia, where Bajaj Auto holds 95 per cent equity stake(the rest is with a management consultancy organisation), has already started importing CNG three wheelers.

According to Bajaj Auto executive director Sanjeev Bajaj, the company will soon set up an assembly unit in Indonesia and import complete knocked down kits of three wheelers from the Indian parent and eventually start manufacturing the units, barring some critical components. Nigeria and Columbia are on Bajaj's cards too.

Energy and environment engineering firm Thermax Limited already has quite a few subsidiaries overseas, but is seriously considering to expand its presence in the Europe and West Asia markets. Chairpereson Meher Pudumjee recently told the company's shareholders in the annual general meeting that Thermax is now prepared to explore the opportunities in the hitherto uncharted areas.

"We will expand the offices in the Middle East to have a fuillfledged sales and marketing team there," she had said. The company is also eying the OEM market in the Unites States and plans acquiring an existing brand to make an entry there.

Another player on the acquisition bandwagon is ethanol technology major Praj Industries. After vindicating its technological capability through a Rs 2 crore order from a US ethanol maker to supply technology as well as plant, the company is training its guns on a 'suitable' unit to acquire in the US market.

Of course Praj too has set up companies abroad but the breakthrough in the US markets is what has sent chairman Pramod Chaudhari on a high.

"The US is a major ethanol opportunity and having a foothold there will spell huge possibilities for Praj," says Chaudhari, who is waiting with a Rs 170 crore kitty thanks to investments coming from venture capitalist and ethenol evangellist Vinod Khosala and Japan's Marubeni Corporation.

MNC dreams is, however, not the prerogative of the big alone, as the city-based Uma Precision Limited too is looking at acquiring businesses in the US.

Rajendra Kankaria, managing director of the Rs 90 crore auto components company, says, "We have established ourselves as manufacturers of world class components and would be keen on picking up businesses in America which we can turn around, while benefiting from the advanced technology they have."

And if global funding organisations like the International Finance Corporation has invested in Bharat Forge or Bajaj Auto, Uma Precision has garnered equity funding from India China Pre-IPO Equity (Mauritius) Limited and H&M Global Selection Pte Ltd, an investment arm of the Kurahara business family in Japan.

With the strength of Pune as a manufacturing hub fast regains its recognition, the city based businesses seem to be responding to the call and striving to keep the country's flag flying high in the countries of the world.