The Hindu Business Line : Goetze to foray into bearings manufacture

AUTO ancillaries firm Goetze India Ltd is examining the possibility of diversifying its product portfolio into manufacturing of bearings. The company may set up its bearing unit in Bhiwadi, where it already has a powdered metal unit, at an investment of about Rs 40 crore.

According to Mr Anil Nanda, Chairman & Managing Director, Goetze India Ltd, "We should be able to introduce bearings in about a year's time. Initially, we would be importing 50 per cent of our requirement from our partner Federal Mogul, a global leader in this segment. Setting up a bearings unit would require an investment of about Rs 35-40 crore." The US-based Federal Mogul holds an approximate 25.5 per cent stake in Goetze.

In addition, Goetze is in the process of upgrading its facilities in Patiala and Bangalore to introduce piston and piston rings that meet Euro III and Euro IV norms.

The company had signed a technology agreement with Federal Mogul that allowed it to use latter's technology for manufacture of contemporary pistons.

Market watchers point out that this will give a boost to Goetze's sales in the coming years as automotive majors upgrade to meet newer emission norms.

Euro III norms will be introduced across 11 cities from April. "There is huge potential for growth. We have received a very encouraging response from almost all automobile companies," Mr Nanda said.

Goetze is targeting a 20 per cent growth in net sales this fiscal over Rs 460 crore in the last year, with a sizeable increase in profitability.

Goetze has been making considerable efforts to improve profitability, including a voluntary retirement scheme.

The company has spent about Rs 36 crore over the past couple of years on voluntary retirement schemes.

It is targeting to trim its workforce by about 400-500 people in the current fiscal, and another 200-300 people in the next one.

"We are also in the process of bringing in a third shift at our plants. This would help to increase production by about 25 per cent," Mr Nanda said.

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