Pennar Industries has set a target of netting 10% of income from exports over the next five years when it plans to hit the Rs 5,000-crore revenue mark on the back of diversification into hydraulics and infrastructure sectors.
"Currently, our exports are negligible. But with our strategy to diversify our portfolio by entering sectors like hydraulic and infrastructure, we expect to garner nearly 10% of our revenue from the exports over the next five years. We have also set a target of Rs 5,000 crore revenue by then," its president and CEO Suhas Baxi told PTI.
The engineering steel equipment-manufacturer recently made a foray into the hydraulic equipment market by acquiring the assets of hydraulic cylinder manufacturer Wayne-Burt PetroChemicals for Rs 15 crore.
"From being a steel products manufacturer, we now want to upgrade ourselves to become a complete engineering solutions provider. We will continue to focus on new customers and new products to compensate for lower demand from key segments of automobiles and railway," he said.
Currently, the infrastructure business contributes to 40% of its revenues, while railway and automobiles which were the major contributors so far have shown a decline to 13% and 22%, respectively.
Under its infrastructure segment, the Hyderabad-based Pennar manufactures road safety solutions, electrostatic precipitator electrodes, fabricated products and pre-engineered building solutions including modular steel constructions of open-span built-up sections, purlins, girts, roofing and wall panels.
"There is a significant demand for these products in the international market. We plan to set up sales offices in East Africa and West Asia for catering to these markets.Besides, through the recent acquisition, we will get access to the North American market where Wayne-Burt supplies its hydraulic cylinders," Baxi added.
Wayne-Burt has a manufacturing facility in Chennai with a capacity of 2.25 lakh cylinders per annum.
"We will continue to manufacture the cylinders in Wayne-Burt's current facility in Chennai. But later, may be after six months, we will shift the facility to our existing factory in Chennai for integrating our manufacturing capacities," he said, adding Pennar will also invest another Rs 15 crore to gain scale and competitive advantage in manufacturing.
Baxi further said the company will continue to invest up to Rs 100 crore every year for the next five years for introducing new products.
