By IANS
Chennai : The Rs.3.5 billion Fenner India Ltd is joining hands with an European company to make engine mounts and vibration dampers in India, which is expected to fuel the company’s growth.
With the passenger car market growing in India, Fenner India sees good potential for it as small-scale units currently make vibration dampers.
Speaking to IANS, V. Abraham, senior vice-president, technology and development, said the European company would provide technology inputs to make hydro dampers and will not partner in the company’s equity.
He, however, declined to name the foreign company as the final agreement is yet to be signed.
“To start with, the foreign partner would buy back the product made in India. Once our products get into overseas car production plants, it will be easy for us to get into the domestic market where most of the foreign car manufacturers have set up production bases,” he said.
The initial buy back order is estimated to be in the region of 800,000 pieces.
Part of the JK Organisation, Fenner India will make the vibration dampers at its Madurai plant in Tamil Nadu.
For a long time, the oil seal, V-belt and power transmission products (pulleys, bushings and couplings) manufacturer Fenner India has been scouting for a suitable auto component buy.
Though some units came to us with a proposal, we found the valuations were on the higher side, Abraham said.
Meanwhile, the company is expanding production of its existing product lines with slight alternation to its earlier announced plans.
According to the official, the new belt factory will come up near Madurai instead of Hyderabad.
“Tamil Nadu is the hub of automotive industry and we found it advantageous to locate the Rs.250-million plant near Madurai,” Abraham said.
The 2.5 million pieces per annum plant will start production this September.
Fenner India intends to double the new plants capacity by 2009 investing an additional amount of Rs.150 million.
Fenner India has also postponed its plans to build an oil seal plant at the northern state of Uttarakhand by a year because it found it difficult to spare hands to build three plants at the same time.
The Uttarakhand plant would supply Hero Honda as well as to the replacement market for oil seals.
In July 2007, the company commenced production at its Rs.250 million, 3.5 million pieces new state-of-the-art oil seal plant at Sriperumbudur near Chennai to supply two-wheeler makers.
Abraham said a research and development centre with 35 engineers have been set up at Sriperumbudur.
Mostly supplying to the auto industry, Fenner India is finding the industrial oil seal market lucrative and has started training its focus on the segment.