After catering for the requirements of large export houses, Amritsar-based Raj Cycles (India) Private Ltd, manufacturers of bicycle air hand pumps, foot pumps etc, is planning to enter the global market. |
The company is eyeing Dubai and other parts of West Asia, and South East Asia for export. Moreover, the company is planning to foray into making bicycle parts like cycle rim and pedals and also to double its present manufacturing capacity. It will invest Rs 1 crore in the next six months in expansion. |
The company is engaged in manufacturing bicycle pumps, foot pumps and LD (low density) polyethylene hoses. The manufacturing capacity of the plant is about 1,000 pumps per day. Also, the company has a network of 1,200 dealers in the country. |
Talking to Business Standard, Managing Director Naresh Babbar said, "With an investment of Rs 1 crore, we would like to foray into cycle parts like cycle rims, pedals and rubber parts and also double the production capacity of pumps." |
Commenting upon demand in the domestic market, he said, "The demand is stagnant here; however, it is increasing in the Middle East, South East Asia. So, we would like to our presence in overseas market. Already, talks are at final stages to export pumps to Dubai." |
"We are also planning to foray into making rubber hoses because they are in great demand in overseas markets." The company manufactures LD (low density) polyethylene hoses for the domestic market. |
Also, the company is eyeing Pakistan for exports. He said, "Once the Pakistan government allows the import of bicycle pumps, foot pumps and spares parts, it would lead to manifold rise in exports, as these items are on the negative list." |
In 2005-06, the turnover of the company was Rs 4 crore and with increased production and with the launch of new product, the company is hopeful to achieve a two-fold increase in the turnover in 2006-07. |
Commenting upon the bottlenecks, he added," The government is in process of introducing 16 per cent excise duty on cycle parts, once it is introduced, bicycle parts will be costlier by 10 per cent. That is likely to hamper the sales in domestic market. Moreover, 4 per cent VAT and 2 per cent Octroi on bicycle parts has already broken our backbone. Also, the state government has not distributed capital subsidy." |
Adding further, he said, "Presently, Amritsar, has 10-12 units engaged in production of bicycle pumps and constitute 90 per cent of the total bicycle hand air pumps and foot pumps production in India. So far, the total industry size is concerned, it is around Rs. 10 crore." |
"If the state government, fail to redress their problems, they are likely to migrate to neighboring states like Himachal Pradesh," he cautioned. |