The Hindu Business Line : 'Rising domestic prices'

THE Rane group has contracted for "a substantial quantity" of steel from China. It is also looking at some options of importing the commodity from some CIS countries.

This will help the group companies to bring down the cost of steel, Rane's Chairman, Mr L. Lakshman, said today.

The group mainly produces steering columns and components and engine parts — all of which are steel-intensive.

The rising prices of steel were a cause for concern, but the group is confident that auto component producers would get price increases from the vehicle manufacturers. "If they do not, then we will be hit very badly," he said.

At a press conference here, Mr Lakshman said that the group's sales would have increased by about 25 per cent last year (accounts are being finalised). The group expects total net sales to be in the region of Rs 800 crore.

Of this, about Rs 80 crore would be from exports, he said. The group expects export to contribute 25 per cent of the turnover in about 3-4 years.

In an informal chat, the group's Vice-Chairman, Mr L. Ganesh, told Business Line that the FTA with Thailand would not be an issue.

`Engine components', which Rane Engine Valves Ltd produces, are among the 84 items identified for gradual tariff elimination.

"It (the FTA) closes some business opportunities — for example, Toyota will never manufacture engines in India and therefore will not buy components from us," Mr Ganesh said. "But our exports are growing and we are able to compete with the Thais," he said.

He, however, stressed that the `rules of origin' would be an important issue. That is, if some products are made elsewhere (say, China) and only some cursory value addition (like packing) takes place in Thailand, it would be a problem competing with such products.

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