Suprajit looks at Indonesia, China to expand

Suprajit Engineering, the Bangalore-based manufacturer of automotive cables, has initiated market surveys to assess the feasibility of setting up manufacturing facilities in Indonesia and China to cater to Indian companies and also tap the South East Asian market.

Ajit Kumar Rai, managing director of the company, said, "With Bajaj and TVS keen on setting up facilities in Indonesia, Suprajit Engineering is preparing to invest there as it is the sole supplier of cables to the companies."

The company is also pursuing the Indonesian project to tap the ASEAN region, he added.

China is yet another significant opportunity with a low cost manufacturing base. "Presently, Suprajit imports certain parts from China for cost competitiveness. The initial work of assessing the feasibility of setting up a plant in China is also being undertaken," said Rai.

Suprajit Engineering's joint venture with Carclo is commencing production this month. The capacity of the plant is estimated to be around 10 million automotive cables per year.

The plant is valued at 1.5 million pound ($2.7 million). The joint project is expected to yield a business of 5 million pound within the first three years of commercial production.

CTP Gills Cables, a Carclo subsidiary, has shifted its cables production from Birmingham in the UK to India. Suprajit Engineering already supplies to CTP and companies like Rover, General Motor and Ford.

"New contracts are being bagged from major European Union customers through joint venture with CTP Gills, which is our techno-commercial front-end and the joint venture is being projected as a low cost manufacturing base," said Rai.

Exports also continue to be a growth area of the company.

"In the last year the company has taken many initiatives. The recent breakthrough with Textron, USA and Piaggio, Italy is an indication of our ability to get new customers," said Rai.

"The company's marketing alliance partner in the US is expected to bag significant amount of new businesses. This may necessitate setting up an exclusive plant for the export of cables to the North American market. The company has taken steps to acquire additional land in Bangalore to meet such business opportunities," he added.

In 2005-06, the company plans to raise export revenue by 20 per cent over the Rs 7.5 crore registered in 2004-05.

The company for the Q2 FY 2005-06 achieved a 35 per cent growth in revenues as compared to the same period of FY 2004-05 at Rs 28.5 crore. For whole of FY 2004-05, the company's sales turnover was Rs 109 crore.