The Hindu Business Line : Kinetic Engineering bags engine export orders

Mumbai April 6 Kinetic Engineering Ltd (KEL), the automotive company of the Kinetic group, is set to design and develop motorcycle engines for exports.

The company has acquired orders from major two-wheeler players such as MV Agusta, Italy and Tomos, Slovakia for 125cc and 50cc engines respectively, said Ms Sulajja Firodia Motwani, Joint Managing Director, Kinetic Engineering.

Ms Motwani told Business Line that in all, 30,000 engines and frame parts would be shipped to the two companies.

Shipments are likely to begin by year-end and the company hopes to export engines worth at least Rs 20 crore in the current year. In 2008, exports may go up to Rs 50-55 crore.

KEL has been exporting various automotive components to international players like Bombardier Recreational Products, Carraro, Visteon, GKN Rockford, Piaggio and Electrolux.

The company expects to generate a turnover of Rs 160 crore from the newly restructured automotive business in 2007 and is targeting a turnover of Rs 500 crore for 2009.

Kinetic has recently completed a comprehensive financial and business restructuring of its auto component business to get a good part of the total auto component business expected to be worth $33-40 billion by 2015. KEL will focus exclusively on auto-component manufacturing and all two-wheeler manufacturing will be governed by Kinetic Motor Company Ltd (KMCL).

Kinetic Engineering's rejigging includes a one-time settlement to lenders, a VRS settlement at its plant, fresh investments by Reliance Capital (purchase of 7,15,000 warrants) and Clearwater Capital Partners (purchase of 7,00,000 warrants) apart from transfer of the two-wheeler activities to KMCL. The company has offered a VRS scheme to 300-odd workers (total workforce 1,736) and an additional 100 were transferred to KMCL. They now have 1,085 people on the rolls and should lead to an annual savings of Rs 4.2 crore.

KEL will now focus on products like small engines up to 500 cc ideal for two-wheelers and recreational products such as ATVs or jet-skies, complete gearboxes for automobiles, earth moving equipment, and commercial vehicles; and a wide array of precision components.

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