The Hindu Business Line : Rising rupee posing a challenge for Alfa Laval: CEO

Alfa Laval India holds a leadership position in the global sourcing of products amongst the Alfa Laval group companies, and the strengthening rupee and rising salaries are posing a challenge as products became less price-competitive.

Calling this the other side of the coin of being a successful economy, Mr Lars Renstrom, President and CEO of the Sweden-based Alfa Laval AB, said that the company, however, would continue volume expansion, introduction of latest technology products and investment in India. He also ruled out any impending change in its 77 per cent holding in the Indian subsidiary.

“India is the only source for some global products,” Mr Renstrom said, adding that during 2007, though in rupee terms their cost remained constant, it rose by 7 per cent for European customers and 13 per cent for those in the US.

Expanding capacities

During 2007, Alfa Laval has invested Rs 50 crore in modernising and expanding capacities at the three facilities Satara, Sarole and Pune that manufacture high speed separators, heat exchangers and flow equipment.

While the manufacture of shell and tube heat exchangers for the refrigeration industry is to start shortly, the company is also putting up a new unit at Sarole to manufacture pumps, valves and fittings for the sanitary industry. This will go on stream by February 2008 and around 50 per cent of the production will be for direct distribution to customers around the world, Mr Remstrom said.

Asserting that Asia accounted for around 30 per cent of the sales revenues of the group globally, he disclosed that the figure reflected in the third quarter order intake had crossed the one-third mark to touch an all-time high of 34 per cent. India currently accounts for 4-5 per cent of the global order intake.

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