The Hindu Business Line : Bharat Forge plans foray into aerospace, shipping products

Pune April 11 Bharat Forge Ltd (BFL) is making its maiden foray into manufacturing components for aerospace applications and marine engines and is investing Rs 300 crore "as a first step" in a greenfield project at Baramati.

It is also putting up a new plant at Mundhwa, Pune at a cost of Rs 140 crore to manufacture large forgings for the capital goods sector.

The projects are part of its efforts to focus on new sectors. The Baramati plant will cater mostly to the export market — especially North America and Europe, where the aerospace and shipping industry has a large presence.

Mr Baba Kalyani, Chairman, BFL, told Business Line that the company had identified three sectors, namely energy, aerospace and capital goods as the thrust areas. Stating that its non-auto forgings business currently accounted for 17 per cent of the company's sales, he said, "We want to up this to 25 per cent by next year, and 40 per cent in the long term."

The wholly owned subsidiary at Baramati, which will be called `Bharat Forge Ltd Centre for Advanced Manufacturing', would take care of forgings for the aerospace and marine engine applications.

The new plant coming up near its existing facility at Pune will manufacture forgings for use in capital sectors like steel and mining, Mr Kalyani said. The Baramati venture, located on 100 acres of MIDC land, envisages an initial investment of Rs 300 crore, Mr Kalyani said.

Added investment

He added that more investment could be made in the future depending on how the market developed, as the installed capacity would take care of requirements for the "next two or three years". The Union Minister for Agriculture, Mr Sharad Pawar, is to lay the foundation stone for the new project on May 1. Production will start in the first quarter of 2008.

The plant will manufacture large components for power generators, locomotives, marine engines, on-highway vehicles, and also forgings for aerospace and general engineering applications, Mr Kalyani said. Their customers will be manufacturers of heavy-duty diesel engines, earth moving equipment, railway locomotives and aerospace system suppliers, he added.

Elaborating on the business plan, Mr Kalyani said that the initial capacity of the plant will be 30,000 tonnes of forgings and one lakh machined crankshafts per annum. The turnover expected with the current investment is Rs 350 crore.

Incidentally, the 5,000-acre SEZ that Bharat Forge is promoting at Khed falls under the six that have been sanctioned after the February 2006 cut-off date. When asked how recent developments on the issue would affect the project Mr Kalyani said, "Recent developments have impacted all SEZ projects. We expect the Government will issue official guidelines/clarifications in about a fortnight. We would have to study these to generate an appropriate response." He added that the process of land acquisition for the SEZ was on.

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