The Hindu Business Line : HMT Machine to focus on high-end products

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Bangalore, Feb. 5 HMT Machine Tools Ltd would be investing Rs 180 crore of the total package of Rs 723 crore given by the Centre for its revival and aim to double its turnover to Rs 500 in the next five years.

The company's optimism stems from the prospect of accessing working capital freely after setting off its debts and reducing costs through a fresh voluntary retirement scheme and increased production and productivity from the replacement of its over four-decades-old plant that would be in place soon.

The revival package has infused new life into the ailing HMT, which once guided the prospects of the manufacturing sector through its indigenous machine tools.

For the long term, HMT Machine Tools would be seeking joint venture partners.

Sharing the roadmap of the company's growth, the newly appointed Chairman and Managing Director of HMT Ltd, Mr A.V. Kamat, told Business Line that the immediate goal was to regain its old glory through an initial sustained growth to achieve a topline of Rs 320 crore next fiscal.

Its turnover in fiscal 2005-06 was Rs 220 crore. The efforts to increase the turnover would be accelerated in the next two years by firming up joint ventures after coming out of the red to target niche products with higher value.

Mr Kamat added the company hoped to rationalise the number of products and focus on only high tech and high value to derive higher margins.

He said the assistance from the Centre would help in repaying Rs 255 crore of VRS related loan, a long term outstanding loan of Rs 138 crore and interest liabilities of Rs 50 crore.

Mr Kamat said reducing the staff strength by 1,000 from the present level of 4,300 and freeing itself from the huge annual debt servicing through a Rs 90-crore interest burden would put HMT Machine Tools back on its keel soon.

With its edge in the strategic sectors like defence and nuclear, HMT Machines would be eyeing the mass market for components for the automotive sector and the CNC systems.