The Hindu Business Line : Grundfos Pumps posts 47% growth in turnover

Chennai, Jan. 24 Grundfos Pumps India, in the words of its CEO Mr Ranganath N.K., grew more than it had expected in 2007 over the previous year, despite more global pump manufacturers selling their products in the country.

“We find that our growth is getting better with more competition coming in,” he says and feels that it is “perhaps (because) customers have an opportunity to compare similar products” and come to a conclusion.

Last year (January-December), Grundfos Pumps India Pvt Ltd, a wholly-owned subsidiary of Grundfos of Denmark, reported a turnover of Rs 166 crore compared to Rs 113 crore the previous year, a 47 per cent growth when the company had estimated a 25 per cent increase, Mr Ranganath told Business Line on Wednesday.

This growth has come despite global manufacturers such as Wilo AG of Germany, KSB, DP and a host of Chinese products being available in the market.

To cater to the growth, Grundfos Pumps India is adding another assembly plant and warehouse space at its existing facility in Chennai at a cost of about Rs 10 crore. The company already has an assembly plant at the location. The expansion will be completed in the third quarter of 2008 .

Grundfos Pumps India assembles and sells large capacity pumps used in a range of applications — industrial, wastewater, commercial buildings, IT parks, hotels, hospitals and government buildings. It is also finding a good growth in the residential sector, with buyers prepared to pay the higher cost for the better efficiencies that Grundfos’ pumps offer, according to Mr Ranganath.

The company plans to shift its assembling operations to another site in Tamil Nadu by 2010 and set up a research and development centre at its present premises, which is a Gold-rated Green building. The R&D centre will focus on products for the domestic market. The company estimates that it will require 15-20 acres of land for the proposed plant.

In the second phase, Grundfos plans to establish a larger plant in preferably a “rural area” along a national highway on about 100 acres. Mr Ranganath said the company had been working on developing local vendors for its pumps.

It required mainly castings and forgings and at present these units were working to full capacity to supply to the automobile sector.

Grundfos Pumps India recently shipped two batches of bronze castings sourced from a firm in Pune to Grundfos in China.

It is in discussion with a handful of firms in Coimbatore and other places to get them to supply to Grundfos. Mr Ranganath estimates that the bronze castings components for Grundfos’ requirement in India, China and Hungary worked out to $1 million a year. The company hoped to make India the base for those components and as it developed, make the country the sole supply base for Grundfos’ global requirement of bronze castings.

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