Uma Precision finds electrical engg safe bet

Engineering components manufacturer, Uma Precision Ltd, has planned a Rs 90 crore capital expenditure for both forward and backward integration of its business.

The Rs 120 crore Uma Group, which supplies components to auto majors like Tata Motors, Bajaj Auto or Holden (of the General Motors Group) and engineering giants like Siemens plans to focus equally between automotive and electrical engineering industries as part of its strategy to derisk its business.

Uma Precision Managing Director Rajendra Zankharia told reporters that the company will set up a bright bars manufacturing plant to create a dependable source of raw material for itself.

He said that forward integration would be a Delta surface components coating plant being set up with technology from Dorken M K S Systems GmbH, Germany.

"The coating plant will not only ensure higher realisations for the components we make, but also open up new segments for us," Zankharia said, adding that the company has been in talks with wind energy equipment manufacturer Suzlon for the supply of parts for the latter's windmills.

The company has plants at Chinchwad, Koregaon Bhima and Supe in Pune district of Maharashtra and also in Hosur and Uttarakhand.

The company supplies 1,200 different components to clients and is a sole supplier of 400 components to Bajaj Auto, Zankharia said.

Being a directly-online (DOL) vendor to Tata Motors, the company has been allotted land in the Tata Motors Vendor Park in Uttarakhand, from where it will also cater to Bajaj Auto's Pant Nagar plant, Zankharia said.

He explained that the company is also looking at the non-auto segments and will become known as a supplier of engineering components to any industry. The proportion of sales to non-auto segments is expected to rise to 50 per cent from the present 28 per cent of the turnover, he said.

The company has completed the installation of 45 multi-spindle milling machines it acquired from Australia and UK last year, and expects to commence the supply of components to the Australian company¿s customers soon, he informed.

In order to finance the expansion, Uma Precision will raise about Rs 90 crore from issue of shares to public later this month or early next month, Zankharia said.