SKF India eyes Rs 3,000 cr business

SKF India, the country's leading supplier of bearings for industrial and automotive applications, is aiming to double its revenues in the next four years with the company aggressively pursuing its expansion strategies in the country.

The company is targetting a business of Rs 3,000 crore with a growth of more than 20 per cent every year. The last financial year ended December 31, 2006, the company recorded sales of Rs 1,342 crore, a growth of 59 per cent over the previous years sales revenues of Rs 781 crore.

Rakesh Makhija, managing director, SKF India, said, "We are prepared to make further investments into our Indian operations to expand our presence, this is especially to keep up with the automobile and industrial boom in India."

"In the last four years, we have grown at a steady pace of about 20 per cent a year and we will continue to excel at the same pace," he added.

SKF India will invest Rs 270 crore to set up a large size industrial bearings plant in Ahmedabad for domestic and global markets, while capex of Rs 500 crore is envisaged over the next two years. Production activities are due to begin by the first quarter of 2009.

"We are extremely confident of our growth prospects in the country. We see strong opportunity for us in growing sectors such as wind energy, oil and gas, power, and other infrastructure areas," said Tom Johnstone, president and chief executive officer of the parent company, AB SKF.

Meanwhile, to diversify its business initiative, the company is looking to reduce its focus on the bearing segments and will channelise its more investments on other areas such as housing/sleeves and accessories, seals, greases, spherical plain bearings, maintenance products, condition monitoring equipment, linear motion products, special steel and a comprehensive range of their hi-tech industrial components.

Currently, about 90 per cent of the company's total revenues arises out of the bearing business. SKF India is planning to expand its seals, lubricants, services and mechatronics business and is focusing more to make it constitute to about 20 per cent of its total revenues by 2011.

"We are currently in the number one position in the bearing segment in the country but we don't want to depend only on it. We would be expanding in other areas of our existing business portfolio also," said Makhija.

AB SKF, Sweden-based parent company, which holds 46.72 per cent of SKF India on the Bombay Stock Exchange is hoping to double its revenues from India from 4 per cent currently.

Earlier this year, the company invested Rs 150 crore to set up a greenfield plant in the state of Uttarakhand to cater to the automobile industry.

The new bearing factory may increase the existing ball bearing capacity by more than 1/3rd, fuelling the growing demand in the booming automotive and other key manufacturing sectors. The plant will be operational in March 2008.