The Hindu Business Line : ‘China can be M&M’s sourcing destination’

“We are looking at all three options — a sourcing contract, setting up a subsidiary or the acquisition route,” said Mr Hemant Luthra, President Systems & Technology Sector, M&M.

Talking at the sidelines of Automotive Component Manufacturing Association Convention here, he said that the company was looking at China, Africa and the US to fill in the missing links in its business.

Engineering services

Mr Luthra said, “I would like to make the component division a knowledge processing hub in terms of engineering services for Europe and North American market.”

Declining to give a definite time frame for the company’s plans in the Chinese market, he said, it would take about 12-18 months for any of their plans to materialise.

He said that the company was looking at acquisitions for its forging business. “We are looking at acquiring companies with 4-5 times EBITDA. If a company is asking 7-8-9 times the EBITDA, it is too much to pay.”

Though he declined to give any specific deal size of the company with which they were negotiating, Mr Luthra had told Business Line recently that the size of acquisition would be mainly in the range of $100-200 million, primarily in Germany, Italy, Spain or France.

M&M, auto division had earlier acquired companies like UK’s Stokes Forgings, Germany’s Jeco Holding AG and Schöneweiss GMBH amongst others.

As per the company’s target, it seeks to touch $1 billion turnover by 2010 from its current size of about $800 million.

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