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Home arrow News arrow Auto component arrow Sundaram Fasteners Ltd plans Rs. 150 crore capex for FY 2012
Sundaram Fasteners Ltd plans Rs. 150 crore capex for FY 2012 Print E-mail
Written by Krishna Kumar   
Saturday, 20 August 2011
Chennai: Sundaram Fasteners Ltd has drawn out capex plans of Rs. 150 crore for FY 2011-12. The company plans to expand its existing capacities for hubs, shafts, sintered metal products and fasteners, in addition to setting up a manufacturing facility for fasteners of wind power generators. The company is also planning to acquire a domestic auto component manufacturer.

Sundaram Fasteners is setting up a plant to manufacture fasteners for wind power generators at Mittamandagapet(near Puducherry), Tamil Nadu with an initial investment of Rs. 30 crore. This facility is expected to commence operations by October 2011.

The company has has 24 factories and 11 subsidiaries, including one in China, Germany and United Kingdom. Its subsidiaries in China and U.K. have reported higher net profit on y-o-y basis while the German subsidiary reduced loss substantially and reported a cash profit in the six months ended June 2011. The German subsidiary caters 40-50% to the auto industry (primarily medium & heavy commercial vehicles) and 50% to others. Arathi Krishna, joint managing director, Sundaram Fasteners Ltd said that the German plant has excellent technology for wind energy.

Sundaram Fasteners will also invest Rs 25 crore to manufacture sprockets at its Maralaimalai Nagar factory.

Suresh Krishna, chairman and managing director, Sundaram Fasteners Ltd, said that the company also proposes to add secondary capacities to develop new products for its customers and expand wherever necessary to meet customer requirements. He said that the company expects to improve overall performance through development of new products for existing customers and by winning new customers besides increased exports.

The company has commenced supply of shimless tappets to Maruti-Suzuki India for its K-series engines. Its subsidiary Autolec have received patents for manufacturing oil pumps and water pumps in one unit. Sundram Fasteners's R&D facilities at Padi, Chennai and Hosur have been recognized by Department of Scientific and Industrial Research, making it eligible for the weighed deduction under Section 35 (2AB) of the Income tax Act.

The company expects the exports to improve going forward. Its exports grew by 45% to Rs. 480 crore in FY 11. The contribution of exports to the total turn over of the company increased to 28.6 per cent during the first quarter of 2012 as compared to 25.4 per cent during the same period last year. Sundaram Fasteners' export customers include General Motors, Cummins, Honeywell, Caterpillar, Ford, Chrysler etc.

For the quarter June 2011, the company's standalone net profit grew by 55% to Rs. 34.93 crore and total sales rose by 28 per cent to Rs 521 crore.

Sundaram Fasteners current total capacity utilization is over 85%. With the planned investments, it is expected to go up 10-15 per cent in some factories. The proposed investments will be mostly made on machines.

Sundaram Fasteners capex plans this year are 11 percent higher than last year.

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