The Chennai-based Sundram Fasteners Ltd, part of the TVS Group, is for the first time entering a venture outside the automotive sector. The company is setting up a plant at an investment of Rs 50 crore to manufacture special fasteners for the wind energy sector, the company's Chairman and Managing Director, Mr Suresh Krishna, told Business Line today.
The plant will come up near Pondicherry (but in the State of Tamil Nadu). The wind energy sector in India is booming and there is a market waiting to be tapped, worth at least Rs 300 crore, on rough calculations. Over time, the plant would also export its products.
Technology for producing the fasteners used in wind turbines and towers comes from a German company — Peiner Umformtechnik — which Sundram Fasteners acquired in December 2005 .
Sundram Fasteners is also investing another Rs 20 crore for the expansion of its hot forgings plant at Pondicherry. The expanded facility will be to make bevel gears — gears with sloping sides. Again, the technology for bevel gears comes from Cramlington Precision Forge, a British company that Sundram Fasteners acquired in 2003.
Sundram Fasteners began supplying bevel gears to Ford India three years ago, and later got orders from Tata Motors for the commercial vehicle ACE and the Nano car. An official of Sundram Fasteners explained that most car manufacturers produced bevel gears in-house, but now that the car market is buoyant, their in-house capacities are fully used and are hence buying the products. This is the market that Sundram Fasteners wants to address.
Mr Krishna said all the three overseas subsidiaries — Sundram Fasteners (Zheziang) Ltd of China, Peiner and Cramlington Super Forge — were performing better. Peiner is at the break-even level, while the other two are profitable.
Profits
In 2010-11, for the first time, Sundram Fasteners' consolidated profits will be higher than the standalone profits, an official of the company told Business Line .
The company achieved a turnover of Rs 1,090 crore in 2009-10 and made a net profit of Rs 75 crore. In the first nine months of the current year, the turnover was almost as much and the profit, Rs 81 crore.
On the BSE today, Sundram Fasteners share (of face value of Re 1) closed at Rs 59.