Financial Daily from THE HINDU group of publications
Thursday, May 27, 2004
Financial Daily from THE HINDU group of publications Thursday, May 27, 2004 |
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Corporate
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New Projects Schwing Stetter to double capacity N. Ramakrishnan
Chennai , May 26 SCHWING Stetter (India) Pvt Ltd, which produces concrete mixing equipment at its plant at Irungattukottai near here, will invest another Rs 18 crore in doubling its capacity. The company has acquired 10 acres of land just across the road from its present location. ``We will be starting construction work shortly. We are now in the process of evaluating the offers of all the contractors,'' Mr Anand Sundaresan, Managing Director, Schwing Stetter (India) Pvt Ltd, told Business Line. The expansion will see its capacity for making cement mixers double from 60-70 a month now. The target is to finalise all the contracts by second week of June and to start the work immediately. The company hopes to complete the expansion before 2004 end. Schwing Stetter (India) Pvt Ltd, a wholly-owned subsidiary of Schwing Stetter of Germany, makes both fixed and truck-mounted mixing equipment, batching plants and pumps. Its plant at Irungattukottai, about 40 km from here, was set up with an investment of Rs 18 crore. According to Mr Sundaresan, Schwing Stetter (India) consolidated its operations last year, which also helped it realise the capacity constraints it was facing. The company had delivery problems due to the capacity constraint. The consolidation phase included strengthening various departments like quality control, design, purchase and production. ``That is how we could find out that this capacity is not sufficient for us and we decided we must go for an expansion.'' The expansion project will be funded mainly out of internal accruals and through some bank borrowing. The company drew up its expansion plan and the cost of doing it in October-November 2003. Since then steel prices have increased steeply and hence Schwing Stetter (India) is battling to keep the project cost within Rs 18 crore for which it had got its parent's approval. Mr Sundaresan said the company would also go in for increased localisation in its products. The import content ranged from 20 per cent to 60 per cent. Ideally, it would like to bring down the import content completely, but some hydraulic components and the high wear resistant steel were not available in India. The company expected that imported content would remain at about 35 per cent. He feels that with highway projects and various other infrastructure projects in the nuclear power, hydel power, airport and port projects taking off, demand for concrete mixing equipment would go up and hence the expanded capacity would come in handy. Also, readymix concrete was being used not just in the metros but also in the second and third level cities and towns. According to him, Schwing Stetter (India) has an over 70 per cent market share in concrete mixing equipment. Last year, it sold about 500 mixers, 70 batching plants and 200 pumps and achieved a turnover of about Rs 120 crore against Rs 90 crore in the previous year. The market was expected to growth to about 1,000 units this year.
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