The Hindu Business Line : Sakthi Auto Components set to double export shipments

SAKTHI Auto Components Ltd (SACL), a subsidiary of Sakthi Sugars that is engaged in production of safety critical items for the automotive segment, is set to double its shipment from six container loads to 12 from November.

The company, located at Mukasi Pallagoundenpalayam in Erode district, has been despatching 7,500 sets (15,000 pieces) of brake discs and steering knuckles every month to Delphi in the US and Mexico for the last two-and-a-half years. It is now gearing up to double the supplies.

SACL has invested Rs 10 crore and created a separate line for Delphi. The company is planning to invest another Rs 35 crore to put up new lines to take care of Ford, Toyota, and General Motors automotive component requirements.

"The negotiation process for supply of the brake drum, knuckle, rotor, and engine mounting brackets with these three major players is on. Once we strike a deal, we may have to pump in some money. But we are looking at this investment plan only in January 2007," the SACL Vice-President, Mr S. Rathinasamy, told Business Line.

The investment proposal details are being worked out.

Besides the US and Mexico, SACL is contemplating export to European countries as well. This is expected to take off within the next six months. Discussions with a Swedish company and with Ford (European operations) are said to be under way.

According to Mr Rathinasamy, the company is aiming to achieve an export turnover of Rs 5-6 crore a month, which would be 40 per cent of its sales volume against 30 per cent currently.

The quantum of exports per month ranges between 250 tonnes and 500 tonnes. "It is likely to go up to 1,000 tonnes in near future," he said.

The company has upped its business volume target to reach Rs 15 crore a month within the next one year. It is now doing Rs 10 crore a month.

To cater to the burgeoning demand for auto components, both in the domestic and overseas markets, SACL has started to look at the inorganic route to ramp up capacities and grow fast. The company is close to clinching a deal with another foundry in this region.

This deal is expected to ramp up the foundry capacity by another 900 tonnes.

SACL's installed capacity is 3,600 tonnes of castings a year.

The company, which has been producing 1,600 tonnes of castings per month, has in the last 18 months improved its operating efficiency by improving its processes.

"Our production capabilities have improved by 350 tonnes. This can further be enhanced by another 150 tonnes, taking our production capacity to 2,100 tonnes," he said, adding that the foundry was equipped with disamatic (vertical) lines, which helped improve production.

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