The Hindu Business Line : Caparo Group keen on more investments in TN

The Caparo Group, which has begun construction work on a 125-acre site at Sriperumbudur near Chennai for producing auto components, is interested in more investments in Tamil Nadu. This was conveyed to the State Government on Saturday when Mr Angad Paul, Chief Executive Officer, Caparo Plc, called on the Tamil Nadu Chief Minister, Mr M. Karunanidhi, at the Secretariat.

During the interaction, the Caparo Group indicated to the State Government that it is looking at a further investment of about Rs 300 crore in facilities such as a convention centre, an engineering college and in high technology industries, for which it sought the Government's assistance.

The Caparo Group is likely to invest Rs 300-400 crore in the "near-term phase" at the Sriperumbudur facility, Mr Paul told Business Line. Construction work on the plant began on Thursday and Mr Paul hoped that production would begin in six to seven months. Once fully operational, the units together would employ more than 1,000 persons.

At that facility, Caparo will have a forging unit, a tooling unit, a stamping unit, an aluminium casting unit, and a consolidated research and development centre. The components made at this integrated complex would be supplied to automobile manufacturers such as Ford India, Ashok Leyland and Volvo.

Mr Paul described the Chennai operations as a major branching out for the Caparo Group, which had so far concentrated on sheet metal components, pressing and welding. The fasteners business, with a unit in Rajasthan, was the first branching out for the Group in the country but the Chennai operations would be the "biggest branching out," he said.

India operations

The UK-based Caparo Group has a joint venture with Maruti Udyog with manufacturing facilities in Gurgaon and Bawal in Haryana and Halol in Gujarat. Besides, the Group has a fully owned subsidiary, Caparo Engineering India (P) Ltd, with plants in Pithampur (Madhya Pradesh), Greater Noida (Uttar Pradesh) and Chopanki (Rajasthan).

According to Mr Paul, the India operations of the Group expect to end 2006 with a turnover of about Rs 400 crore and his mid-term goal is for this to grow to more than Rs 1,000 crore. He was confident that the Group would be able to achieve this figure in 2008 itself, once the Chennai operations and other plans that the Group has materialise. The Indian operations constitute less than 10 per cent of the Group's engineering business globally.

Mr Paul said the Group's strategy in India would be to have a geographical spread and be present in the regions where vehicle manufacturing took place. It would have to look at eastern region too, as a number of vehicle manufacturers were putting up plants there.

The South, he said, had a few advantages in certain fields, especially in design engineering. The Group would leverage this strength in the region from its proposed R&D centre at Sriperumbudur.

He said that the Caparo Group has acquired a company called AP Braking in the UK and would use this to have a braking system unit in India. Caparo AP Braking Ltd, as that company is now known, provides specialised braking solutions to major vehicle manufacturers.

Globally, Mr Paul said, the engineering business of Caparo was expected to end 2006 with a turnover of £ 725 million, up from about £600 million in 2005. A bulk of the sales came from the US and the UK.

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