The Hindu Business Line : Saint-Gobain plans Rs 175-cr expansion

"We had created a capacity of 0.5 million windshields and 1 million sets of door glasses between 2003 and `05 with an option of scalability by marginal investments."

Hyderabad , Aug. 3

Saint-Gobain Glass India (SGGI), a subsidiary of the French major Saint-Gobain France, has now decided to embark upon its second phase of India strategy of scaling up capacities in its automotive glass division to tap the emerging opportunities in the Indian automobile space.

Disclosing this at the Indian School of Business (ISB) here on Thursday, the SGGI Managing Director, Mr B. Santhanam, said, "The company had already over invested on the infrastructure with high estimations on the emerging opportunities.

"We had created a capacity of 0.5 million windshields and 1 million sets of door glasses with an investment of Rs 170 crore between 2003 and `05 with an option of scalability by marginal investments."

According to him, in the first phase of its India strategy, the company had also developed local sources for key inputs such as raw materials and also over invested on inward and outward logistics by bringing in knowledge from the existing facilities across the globe.

With the help of effective strategy of a combination of own staff and outsourcing, the company could bring down the labour cost to one-tenth of the cost in Europe.

The India strategy of Saint-Gobain consists of three phases - building the base, scaling up and innovation, with each phase lasting typically 3-4 years.

Each of these phases demands specific approach on strategy, structure, systems, staff and skills. The company is currently in its second phase of strategy.

Mr Santhanam said, "Infrastructure constraints are the most difficult to correct at a later stage during scale-up. By over investing on infrastructure we had already addressed this. We are now planning to invest Rs 175-crore during 2007-09 for creating a capacity of 1.5 million windshields, 1 million sets of door glass and 1 million back glasses by mid-2008. We have also decided to automate and integrate lines for increased capacities with upgraded equipments to handle higher volumes."

Further, as a part of the third stage of India strategy, Saint-Gobain has also decided to encourage technical know-how development in tool design, simulation, automation, where Indian IT expertise can be leveraged. The company proposes to initiate 4-5 projects with IITs and other research organisations such as IISc on appropriate technical areas.

"In the third-phase of strategy, we are aiming at bringing in technology that is relevant, appropriate, scalable, flexible and addresses the variability that is unique to India. Towards this, we would aim to build strong networks with research organisations and suppliers of machines and systems for automation and integration," Mr Santhanam said.