The Hindu Business Line : Mahindra Systech to invest Rs 800 cr on expansion

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Mumbai, March 2 After a series of foreign acquisitions, Mahindra Systems and Technologies (Mahindra Systech) is set to invest Rs 800 crore for expansion of its casting and forging plants.

Mahindra Systech (one of the six business units of Mahindra & Mahindra) comprising Mahindra Engineering Services, the strategic outsourcing and components division, plans to double capacities at its existing casting and forging plants.

The existing production capacity of all forging plants (domestic and international) is 2.75 lakh tonnes per annum.

To double local capacity, we are investing Rs 200 crore in forging plants, Rs 200 crore in casting plants and adding a new casting plant for the upcoming Mahindra Renault plant at a cost of Rs 200 crore, said Mr Hemant Luthra, President, Mahindra Systems and Technologies. MUSCO Steel expansion would envisage an investment of Rs 100 crore and stampings would add another Rs 50-100 crore, making a total investment of Rs 800 crore in the coming two-three years, he said .

The investment will be funded through a mix of debt and equity in equal proportions.

Focus on forging

The company's focus on the forging industry is quite evident considering the 25 per cent CAGR growth in production on an annual basis and an Automobile Component Manufacturers Association report stating that forging exports are to touch $3 billion by 2015.

Foreign acquisitions led to easy access to the overseas market, implying that the company has the necessary quality and manufacturing processes.

So, in order to arrive at the lowest cost, find the best company that gives you access to the customer; after that you have to bring offshore work as much as possible, said Mr Luthra.

The company has a vision to become the second largest automotive company in India by 2010 and be in the top 10 in the world by 2015.

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