The Hindu Business Line : Greaves Cotton setting up engine plant in Chennai

Greenfield plant: (From left) Mr Karan Thapar, Chairman, Greaves Cotton Ltd; Mr P. Sachdev, Managing Director and CEO; and Mr K. Sunil Kumar, Head- Infrastructure Equipment Group; at the inauguration of a new plant at SIPCOT industrial estate, near Chennai on Friday.

Our Bureau

Chennai, April 18 Mumbai-based Greaves Cotton Ltd (GCL) intends to set up a greenfield production centre at Gummidipoondi, 50 km north of Chennai, where it will manufacture petrol/kerosene engines. GCL has another unit to produce such engines at at Thoraipakkam, some 20 km south of Chennai. Over time, this unit will also be shifted into the new unit at Gummidipoondi.

Though the proposed unit will come up on a fresh piece of land, GCL already has four other independent production facilities at Gummidipoondi, where it produces construction equipment. The fourth, set up at a cost of Rs 22 crore, was inaugurated today. The company has one more at Ranipet, some 120 km west of Chennai.

Addressing the media at Gummidipoondi today, the Managing Director and CEO of the company, Mr Praveen Sachdev, said the company has been manufacturing more than 2.5 lakh engines annually supplying to all the OEMs except Bajaj Auto. In the company’s financial year 2006-07, which ended in June, the engines business for GCL accounted for 80 per cent of sales. It has subsequently dropped to 70 per cent due to poor off take from three-wheelers manufacturers.

However, the infrastructure equipment division has been growing at over 60 per cent CAGR for the last four years, contributing to about 30 per cent of the group turnover. This has been possible since GCL is the only company in the country to offer both concreting and compaction equipment, he said.

In addition to inaugurating the plant, the Chairman of GCL, Mr Karan Thapar, also opened a training centre, to support the service engineers of the company, its customers and their operators. The company also announced signing of technical collaboration agreement with Bomag GmbH of Germany to manufacture 19-tonne vibratory soil compactors, used in large projects like airports, dams and irrigation projects.

Mr Sachdev, said the new plant built at a cost of Rs 22 crore would complement the existing units enabling GCL to double its capacity to 1,200 compaction machines per year.

This division already has two plants in Gumidipoondi and one in Tondiarpet in the city manufacturing transit mixers, vibratory compactors, tandem rollers, batching plants and concrete pumps. Shifting of manufacturing compaction machines the adequate space has been created at unit I and this would enable the company to significantly enhance production of concrete pumps, he said.

Interim dividend

After today’s Board meeting today, GCL declared third interim dividend at the rate of Rs 2 per share (cash outgo Rs 11.43 crore).

The company had declared two interim dividends of Rs 2 a share each, taking the total interim dividend to Rs 6 for 2007-08.

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