The Hindu Business Line : Bharat Forge chalks out global strategy

KEEPING up with the globalisation strategy, Bharat Forge Ltd brought in E J Makay, a Chinese consulting firm based out of Shanghai, to conduct a study on market and interest strategy.

The study, which is on for the past 10 months, is expected to be completed by October. It would examine how and what should be on offer to the Chinese market and whether it should take the route of a joint venture or greenfield project or any other method. This was stated here on Tuesday by Mr Baba N. Kalyani, Chairman and Managing Director, Bharat Forge Ltd, while talking to presspersons after the company's annual general meeting.

Mr Kalyani said the global strategy of the company was to have a footprint in Europe, North America and Asia. Currently, the company has a footprint in Europe with its acquisition in the last fiscal of Carl Dan Peddinghaus, a German company. He said it was hoping to have a presence in the North American markets also. He said after five years, the company would be looking at the European and North American markets as technologically-oriented while India and other Asian markets would serve as the manufacturing back-end.

Mr Kalyani said, with an upsurge in the domestic demand coupled with the buoyant exports, the company was in an expansion mode and had taken up a Rs 350-crore expansion programme. This expansion is proposed to be financed by a combination of issue of equity shares/warrants on rights basis and debt. The company's rights issue to part fund the expansion programme is slated to open in the second week of August. He said as part of this expansion programme, the company which has, two 6,000 tonne pressline for the passenger car category, would setup two more new press line in the 5,000 and 5,500 tonne range, including one automated transfer pressline. Out of the two, one is expected to be operational in October 2004 and the other in the last quarter of this fiscal. He said the serial production and supplies for passenger car crankshafts had begun and would be ramped up in the coming months. He said, to augment the capacity for large forging, BFL was investing in a heavy-forging press line, which was expected to be commissioned during the first quarter of the next fiscal. With this, it would become the only company in the globe to have three heavy-forging presslines. Mr Kalyani said it was also expanding its crankshaft machining capacity by two lakh numbers per annum for which it was setting up three lines. This capacity would primarily help address the global market. Of the three lines, two are expected to be commissioned in 2004-05 and the third in 2005-06. Through these expansions, its forging capacity would increase to over two lakh tonnes and its machining capacity would increase to over 6,00,000 crankshafts per annum. He said the company was setting up in-house product testing and validation facilities in Pune, which are expected to beoperational in the next three months.

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