Auto parts manufacturer Rane expects its loss-making aluminium diecast subsidiary to turn around this year.
Rane Diecast Ltd was set up in 2006 to cater to American partner TRW’s global requirements of machined aluminium die-castings. The subsidiary has an integrated plant in Hyderabad.
For the fiscal year 2011, Rane Diecast recorded a turnover of Rs 43 crore (at a 29 per cent growth over last year) and a net loss of Rs 4.6 crore (loss of Rs 2.9 crore in FY 2010). “The first project we bagged was that of Chrysler which eventually went into bankruptcy. Orders dried up thereafter,” said Mr L. Ganesh, Chairman, Rane group.
Despite improvement in sales, the capacity utilisation in 2010 – 2011 was only 67 per cent. For nearly 7-8 months, the plant was running idle, said Mr Ganesh. Higher power, fuel, repairs and maintenance, premium freight expenses dented the company’s profitability during the current year.
But the subsidiary will turnaround this year as the order book looks good, said Mr Ganesh. Rane Diecast has bagged orders from Ford and Volkswagen. “The plant will run full capacity this year at Rs 5-6 crore per month,” said Mr Ganesh.
The medium term vision for Rane is to make its diecast business a profitable Rs 100 crore company by 2015.