The Hindu Business Line : To derive cost advantages — Bosch relocates products to MICO

IT'S not just software and BPO work that is getting shifted to India. The German industrial technology giant, Bosch, has moved the manufacturing of a number of its products to Motor Industries Co Ltd (MICO), its Indian subsidiary, to derive better cost advantages.

The relocation of these products would not only help MICO boost its export revenues, but also keep its four factories in full operation. The company is hopeful of earning 20 per cent of its turnover from exports by 2004 as against 16 per cent now. The products that have been shifted to MICO from other Bosch plants include mono-block pumps from the Czech Republic, multi-cylinder pumps from Austria, KCA injectors and DN nozzles from France, 3-cylinder VE distributor pumps from Germany and regulators from the Cardiff plant, according to an internal publication of the company.

Some of the equipment needed to manufacture these products was relocated to MICO's plants in Bangalore, at Naganathapura, Nashik and Jaipur, a company official told Business Line. "Today, MICO is the global sourcing centre for Bosch for indirect diesel injection," he said. MICO is rapidly integrating itself with Bosch in areas such as product development, quality testing and validation.

The manufacture of mono-block pumps - the PF33 and PDM - was relocated from the Czech plant to Bangalore as MICO had reached good volumes and global quality standards. Now, the Bangalore plant is expecting that volumes of these pumps in a year would be three-four lakh units as against the two-three lakh units planned earlier. The PF33 and PDM pumps would also rake in an additional revenue of Rs 44 crore when production reaches its peak.

In addition to this, the Bangalore plant has also secured the transfer of eight, nine and 12 cylinder multi-cylinder pumps from Bosch's Hallein plant in Austria. At the Nashik plant, where MICO was contemplating downsizing capacity in the past, the KCA injectors and DN nozzles are manufactured after MICO convinced the Bosch DS Division to stop production of these products at its plants in France, Turkey and Brazil and shift them to India.

In 2002, exports from this plant have grown to Rs 36 crore from about Rs 11 crore in 1999 and by end of the current year; exports are expected to reach Rs 70-75 crore.

Now the Pintle-type nozzle was also being relocated to the Nashik plant as Bosch was consolidating the production of this item. The Nashik plant would be the global manufacturing centre for such products, the official said.

The increase in overall exports has started to tell on MICO's bottomline. In the first half of 2002, the net profit of the company stood at Rs 114 crore as against Rs 66.1 crore achieved in the same period last year.

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