Business Daily from THE HINDU group of publications
Wednesday, Jul 23, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Wednesday, Jul 23, 2008 ePaper | Mobile/PDA Version | Audio |
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Corporate
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Outlook Chinese biz: Bharat Forge takes a cautious approach “Analysts predict a slowdown post the August 2008 Olympics. From India, we will continue to address business opportunities in forging but are cautious in committing machining capacities for China,” it has said. Our Bureau Chennai, July 22 Bharat Forge Ltd has said that it will continue to address business opportunities in China but will be cautious in committing capacities to the Chinese market. The Chinese market, it has said in its 2007-08 annual report, continues to be strong but volatile. “Analysts predict a slowdown post the August 2008 Olympics. From India, we will continue to address business opportunities in forging but are cautious in committing machining capacities for China,” it has said. Volatile marketBharat Forge has initiated discussions with large original equipment manufacturers in China and their needs for localisation of components are being addressed jointly with FAW Bharat Forge (Changchun) Company Ltd, a 52:48 joint venture between itself and First Auto Works Corporation of China. According to the annual report, the company expects the spurt in automobile growth in China to continue in the long-term. However, the Chinese market continues to be volatile. A new 12,500-tonne press has been installed at FAW-BF, taking its capacity to 135,000 tonnes. There has been an improvement in FAW-BF’s overall production, which has translated into an improvement at the EBIDTA (earnings before interest, depreciation, tax and amortisation) level but has not yet started reflecting in the bottomline. FAW Bharat Forge is one of the 12 subsidiaries of Bharat Forge – seven of which are in Germany, one each in Sweden, Scotland, Hong Kong and the US. Bharat Forge has said that a significant portion of the consolidated revenues is generated by the subsidiary companies. Global vehicle marketAccording to the annual report, the commercial vehicle market in the US, which is Bharat Forge’s largest export market, fell by 40 per cent in 2007-08. The company countered this with a 61 per cent increase in sales to the passenger vehicles and non-automotive sectors. Europe accounted for 49 per cent of the company’s business, India 26 per cent, North America 17 per cent and Asia Pacific eight per cent. Bharat Forge expects its non-automotive business – it is setting up manufacturing facilities for producing components for the energy sector, hydrocarbon exploration, wind turbine components and transportation sector – to contribute 40 per cent of its consolidated sales by 2011-12 against 20 per cent now (consolidated sales of Rs 4,752 crore in 2007-08). These plants in Maharashtra are scheduled to start production from the second quarter of this financial year. More Stories on : Outlook | Automobile Components
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