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Our Bureau

Chennai , July 3

MADRAS Engineering Industries Pvt Ltd, which makes a brake system component for commercial vehicles, is setting up a production unit for automatic slack adjusters at the Mahindra World City, a special economic zone near Chennai.

According to Madras Engineering's Managing Director, Mr E.K. Parthasarathy, the company will invest over Rs 40 crore in expanding its production facilities to make automatic slack adjusters. The company will initially invest Rs 12 crore in the new facility, which is expected to start production by October 2006.

The balance investment would be made next year either at the SEZ unit or in its two export-oriented units at Maraimalai Nagar and Ambattur. Slack adjusters are used in commercial vehicles' brakes to prevent brake fade. The company is among the largest manufacturers of manual slack adjusters with a production of about a million pieces a year at the unit in Ambattur, mostly for the domestic market, he said.

The automobile industry world over is shifting to automatic slack adjusters, and India too will make it mandatory for commercial vehicles from October 2006. In keeping with this trend the company is expanding its production capacity, and over the coming years will move out of making manual slack adjusters.

The Maraimalai Nagar unit makes automatic slack adjusters for the export market. This production will be shifted to the new unit coming up at the SEZ, where it will have a capacity to produce about 35,000 pieces a month. The Maraimalai Nagar unit will continue producing for the domestic market.

Mr Parthasarathy said the global demand for automatic slack adjusters is estimated at about 1,20,000 pieces a month and Madras Engineering hopes to meet the demand for at least 50 per cent of the market.

In 2004-05, the company's turnover was Rs 65 crore, of which Rs 48 crore came from exports. This year, the company expects its turnover to touch Rs 100 crore with Rs 70 crore from exports.

In 2007-08, when it will produce 70,000 pieces of automatic slack adjusters a month, the company expects its turnover to touch about Rs 250 crore, of which 50 per cent will be from exports, according to Mr Parthasarathy. The company is also expanding its product range. It acquired a German company, Dewe, about a year-and-a-half ago. Madras Engineering supplies slack adjusters to the European market under the Dewe brand, he said. The company has gone further to develop developed self-setting automatic slack adjusters, which it is in the process of patenting. John Bruce UK Ltd, which holds 24 per cent stake in Madras Engineering, is it's worldwide marketing partner.

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