The Hindu Business Line : Bosch relocates manufacture of key products to MICO plants here

AUTO parts maker Robert Bosch of Germany has relocated manufacture of certain key products from some of its locations in Europe to MICO, India as part of its strategy to reduce costs.

A spokesperson for MICO told Business Line that Bosch's relocation strategy will lead to additional cost savings while at the same time the Indian subsidiary will make gains through higher export turnover, profitability and employment generation.

The product transfers include single cylinder pumps from the Czech Republic, multi-pumps from Austria, and KCA injectors from France to MICO's Bangalore plant.

Also, injectors and nozzles from Europe have been relocated to Nashik, regulators from the UK to the Nagnathapura plant, and Cylinder VE distributor pumps from Germany to the Jaipur plant.

MICO will now become the worldwide supply base for these products.

The spokesperson said that these product transfers involve additional investments at the four plants of MICO.

"However, the outgo will be kept under tight control by way of negotiations to acquire the complete production lines or certain important machinery on competitive valuation basis."

The spokesperson said every project is evaluated on a stand-alone basis on criteria like exports turnover, profitability and employment generation.

For instance, the transfer of single cylinder pumps from the Czech Republic to the Bangalore plant involved an investment of Rs 20 crore.

While the project generated about 180 jobs at different levels in MICO, the export turnover from this project alone is expected to be around Rs 60 crore during 2004.

Because of the relocation strategy, MICO's exports, according to analysts, is expected to grow at 30 per cent CAGR till 2006 (calendar year) while the export contribution to total sales is expected to improve from the current levels of 15 per cent to almost 20 per cent by 2006. According to an auto component analyst, the Bosch's relocation strategy demonstrates its faith in MICO's ability to deliver international quality products at competitive prices.

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