The Hindu Business Line : SAR Silicon to join EaglePicher to enter auto battery sector

SAR Silicon Systems, a manufacturer of UPS systems and inverter batteries familiar with the Luminous brand, has sewn up plans to foray into automotive batteries in partnership with the US-based $685-million EaglePicher Inc, to be produced in the new manufacturing base set to come up in Himachal Pradesh this year.

The company expansion and diversifications plans include the rollout of a wider range of general purpose batteries and automotive batteries and related products in partnership with EaglePicher. It had recently lined up home appliances leveraging its brand equity in the inverter and domestic power appliances market through the Luminous brand of products. These cover LPG water heaters, room-coolers and heating systems.

The Managing Director SAR Silicon Systems, Mr Rakesh Malhotra, told Business Line that the company has drawn up plans to establish a new manufacturing base at Baddi in HP, which will see overall investment of about Rs 30 crore. The company plans to roll out both automotive and VRLA (Value Regulated Lead Acid) battery range. The Baddi facility, to be taken up in phases, will have a capacity to churn out one million units per month. "We chose HP to take advantage of the tax concessions there and the phase one will be commissioned by third quarter," he said.

These automotive batteries will be marketed under the co-brand of Luminous EaglePicher. The company is at present focusing primarily on the replacement market for automobile batteries, a segment as large as 3.5-4 million units a year.

With revenues of Rs 200 crore, the company plans to step up sales by about 40-50 per cent to reach Rs 280 crore in fiscal 2005. The expansion is to be part-funded through internal accruals and debt.

With the launch of a wider range of batteries targeting the replacement market, Mr Malhotra said: "We will be able to garner a larger chunk of the growing business. The battery market is estimated at Rs 4,000 crore now and is growing by over 25 per cent per annum."

EaglePicher Inc, founded in 1843 and headquartered in Phoenix, Arizona, is a diversified manufacturer of industrial products for space, defence, automobiles etc. Currently, the company has more than 30 plants in the US, Canada, Mexico, the United Kingdom and Germany.

SAR Silicon Systems markets its power products and domestic appliances under the brand name of Luminous and Tez in India and abroad.

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