SAURASHTRA IRON FORGING PLANS RS 250-CRORE EXPANSION
By ceoaisra, Section AISRA NEWS
Posted on Thu Jul 03, 2008 at 02:58:09 AM EST
RAJKOT-BAS ED Saurashtra Iron Forging Private Limited (SIP), a manufacturer and supplier of bearing rings, has chalked out a Rs 250-crore expansion plan of its existing facilities. The expansion, fuelled by the growing demand for bearing rings, will be completed in three phases by the end of financial year 2010-11, official sources in the company said. Elaborating on The long-term plans of the firm, the SIF MD Amubhai Bharadia told that the first expansion would be funded through a combination of private equity placement and bank loans. "We plan to offload 30% stake in the company, which will bring in around Rs 25 -40 crore. Approximately Rs 50 a ore will be funded through bank loans," he added. The company is already in talks with consultants and PB funds for private equity placements. The deal is expected to be dosed by September, In addition to the funds from private equity, SIF may come up with an IPO for second phase of its expansion and diversification. The expansion plans also include diversification into manufacturing of auto components. In the first phase, starting 2008-09, STF plans to invest Rs 150 crore. This will go into acquiring 10 acres ol land and setting up new manufacturing facility at Pipaliya village. The completion of first phase would more than double the company's production capacity and take it to 1,500 tonne per month from present 600 tonne, said officials of the company. The second phase of expansion will begin in 2010-11. During this the company will pump in Rs 100 a ore to increase the production capacity to 2,500 tonne per month. The second phase will be followed by the diversification in to auto-parts manufacturing. Thus taking the company's production capacity to 5,000 tonne per month by 2015. SIF is targeting to achieve a turnover of Rs 1,000 crore by 2015. Explaining the fundamentals behind the expansion drive, the company's MD said that the demand for bearing rings is on the rise. "The bearing ring is the basic requirement for all types of industries. Moreover. European countries are closing down their units and are slowly diverting the bearing manufacturing to Asian countries like China and India," he said. SIF is currently engaged in manufacturing of bearing rings and is a supplier to the companies like SKF India, TATA bearings, Kansara Bearings limited, Austin Engineering Company Limited and FAG Bearing India Limited.
"At present we have exported around 30% of the total production in 2007-08 to the countries like Germany. France. Brazil and USA. Now, looking at the higher demand from European countries, we have set a target of 60% exports in 2008-09," SIF executive director Rajesh Bharadia told.
