• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Port Info

• Ships in Ports
  
  

Archives

• Yesterday
• Datewise
• Resources

Group Sites

• The Hindu
• Business Line
• The Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

M. Ramesh

Chennai , Feb. 24

SUNDARAM-Clayton's (SCL) recently-set up subsidiary, Auto India Engineering Ltd, will focus exclusively on exports to SCL's collaborator, WABCO.

SCL produces air brake systems in collaboration with WABCO of the US, and aluminium die-casting. Senior officials of SCL told Business Line that exports to WABCO would go up to Rs 100 crore within three years.

The company's annual report for 2003-04 refers to this in passing thus: "Product development is also being undertaken for the export market for catering to the global requirement of our collaborator."

The company decided that it would be better to ring-fence the WABCO-related operations, so as to give the buyer a better comfort level.

Alongside, Sundaram-Clayton, which has been investing heavily in expansion of its aluminium die-casting foundry, expects exports of foundry products also to go up. In the current year, exports are estimated around Rs 85 crore, which will increase to Rs 120 crore in 2005-06 and to Rs 160 crore in the following year.

SCL will be investing Rs 100 crore in foundry expansion in the current year and another Rs 60 crore next year, official sources said.

Meanwhile, the company expects its sales to go up by Rs 50 crore by a quirk of VAT. At present, Sundaram-Clayton's sales to its subsidiary, TVS Motor Company , comes from the job work it does, with material provided by the latter. TVS Motor Company could buy foundry products from SCL, but there would be an incidence of excise duty. When VAT comes, with excise set off available, TVS Motor could ask SCL to sell products, rather than do a job work.

"If this practice is changed to sale basis instead of job work, there will be increase in turnover to the extent of Rs 50 crore at current level of operations," a senior official of SCL said.

SCL's turnover from TVS Motor business in 2004-05 is expected to be Rs 55 crore, without material cost as the material is supplied by TVS Motor Company.

SCL is mulling a restructure programme. The company's two divisions — air brakes and die-casting — could be put into two separate companies and the collaborator may pick up a majority stake in the company that produces braking products. SCL expects to make an announcement on this shortly.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Toyota rolls out `Innova'

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line