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M. Ramesh

Chennai , March 18

Ucal Fuel Systems Ltd intends to pump in $2 million (Rs 9 crore) into its US subsidiary, Amtec Precision Products, to help the company turnaround.

The Managing Director, Mr K. Jayakar, expressed confidence that the $75-million Amtec would start making cash profits by December.

"Our fundamental strategy is to grow Amtec in the US," he said, stressing that the idea behind the Rs 125-crore takeover last year was not to shift the operations to India.

However, having a beachhead in the US will help Ucal raise exports to the US, which would touch Rs 100 crore in three years, he said.

Export avenues

Sensing export opportunities, Ucal intends to set up a production facility exclusively for exports and has bought 10 acres of land in the Mahindra Industrial City near Chennai, for that purpose.

The takeover of Amtec, which makes a variety of auto components such as high pressure pump heads, rocker arm assemblies and injectors, also symbolises the transformation of Ucal from a commonplace carburettor manufacturer to a technology-driven company.

Image-spin-offs

The Rs 275-crore Ucal Fuel expects image-spin-offs from two happenings in the company — one the takeover of Amtec and the other, the coming of age of its R&D centre in Chennai, created two years ago at a cost of Rs 20 crore.

Amtec, which is also into plastic injection moulding, will give Ucal a foothold in the automotive plastics too.

R&D centre

The R&D centre in Ambattur, Chennai, has two tasks — to develop new products "from first principles" and work for Ucal Fuel's Japanese collaborator, Mikuni.

With 70 engineers ("we want to hire 25 more"), the centre is working on "a dozen projects" in the fuel and engine management systems area for both diesel and petrol cars.

Mr Jayakar did not want to elaborate on this, but said that the centre is also developing capabilities in machine building. In fact, a few "special purpose machines" have been sent from Ucal to Amtec.

More Stories on : Overseas Investments | Automobile Components

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