Sundaram Clayton does not see the short supply of iron ore triggering a major shift from iron castings to aluminium castings, given the high cost differential.

“It may happen to some extent, but iron ore shortage will not be the primary driver for increased uptake in aluminium castings, due to the high cost differential (2-2.5 times) between iron and aluminium castings,” said Mr C. N. Prasad, Group President and CEO, Sundaram Clayton, which manufacturers a range of aluminium castings for the auto industry.

Iron ore shortage is a result of the mining ban in Karnataka, following instances of illegal mining in the State.

Replacing cast iron parts with aluminium also means redesigning the vehicle, thus adding to the costs, said Mr Prasad.

Sundaram Clayton sees opportunities in tighter emission norms for passenger cars and trucks. Aluminium castings make the vehicle lighter, leading to lesser fuel consumption.

“After US and Europe, the trend is being seen in India too,” said Mr Prasad, on the sidelines of the company AGM.

The company is eyeing a turnover of Rs 1,000 crore this year (Rs 764.9 crore), despite the slowdown in the auto industry, said Mr Venu Srinivasan, Managing Director. Mr Srinivasan sees investments made in new products producing results going forward.

Sundaram Clayton's new plant in Oragadam, near Chennai, will start trial production in January 2012.

Around Rs 80 crore will be invested in this plant which will cater to export markets.

The company will also pump in Rs 40 crore to expand capacity at its plant in Padi, Chennai.

At the AGM, shareholders approved the appointment of Mr Sudarshan Venu, son of Mr Venu Srinivasan, as a director of the company.

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