Su-Kam lines up Rs 75 cr for Baddi battery unit

Su-Kam Power Systems Ltd, a young player in the power back-up industry, is set to invest Rs 75 crore in its upcoming SMF (sealed maintenance free) batteries unit in Baddi.

Construction is on and the facility will be operational by the end of this year. The state-of-the-art machinery for the plant has been imported from the US. The unit will come up in an area of 5 acres (one acre is 43,560 square feet) and produce 400,000 batteries per annum.

The company has joined hands with Reliance India Power Fund (a private equity fund sponsored by the Anil Dhirubhai Ambani Group) and Temasek Holdings (Temasek), a Singapore headquartered investment company, and raised Rs 45 crore from the two companies for the current expansion.

The company is already running three plants in Baddi. The new set-up will provide direct employment to 200 people. As Himachal law makes recruitment of 70 per cent Himachalis in a unit mandatory, the company is running training programmes and the HRD is working aggressively to train the local manpower before the commissioning of plant. The CEO of Su-Kam Kunwar Sachdev told Business Standard that he was contemplating of having a vertically integrated facility at by consolidating all his operations located in Baddi under one roof. This would help him in cutting costs to large extend and he has applied for a suitable location to the Himachal Government.

"The company clocked in a turnover of Rs 200 crore this year and has set a target of Rs 500 crore for the year 2006-07," said company CEO Kunwar Sachdev. He indicated that the company had been growing at a rate of 100 per cent for the past few years. The availability of the private equity would act as a catalyst for the expansion so the company would grow at a higher rate now, added Sachdev.

He informed that the domestic market has the immense potential and he expected to generate Rs 450 crore from the domestic market next year.

North and West of India face frequent power cuts and the people have the purchasing power to buy inverters. In order to spruce up its operations in the domestic market, the company has decided to double its dealer network from 4,500 to 9,000 in the next year.

Su-Kam registered an export turnover of Rs 10 crore this year that is expected to double in the next year. The increment in the exports would mainly come from the new markets explored by the company.

According to Sachdev he surveyed a huge potential for his products in the North American states. Due to snow and hurricane some of the states face a four hour power cut twice a year.

As the handling of generator is cumbersome people prefer to buy an invertor. "Since Su-Kam has SMF battery with 10 year life there is a big potential for his product in that region".

Another advantage of selling in USA is the subsidy on the solar compatible equipment and his inverters fall in the same category.