To scale down investment in Punjab facility
Murugappa group company Tube Investments of India is looking to scale down investments in Punjab owing to sluggish market conditions.
The company is setting up a tube manufacturing facility in Punjab, as part of its expansion strategy in the North. It had earlier proposed an investment of Rs 200 crore on this plant. “This will be downscaled now,” said L. Ramkumar, Managing Director. Investment could instead happen in phases, he added, on the sidelines of the company AGM on Monday.
The economy is in a state of volatility and turbulence which impacted first quarter profits, said Ramkumar. The current year will be a tough one with either marginal or flat growth, he said.
Ramkumar said: “Two-wheelers will see moderate growth this year, while car sales will grow in single digits, about 4 per cent. Light commercial vehicles will do well. Other segments will see slow growth.”
The company expects the after-sales market to correct itself in the next few months. New products will also be a significant growth driver in the future.
TI inaugurated a new facility for stainless steel products and it expects volumes to pick up slowly. It also hopes casings for motors and products for the agri sector make significant progress this year. The company expects to tap into industrial applications of power, infrastructure and engineering sectors through Shanthi Gears, which it has recently acquired.
Exports could see a dip in the second quarter of the year. “We see a slowdown in Europe. Big (ticket) exports will take time. America is better; we could export more tubes and chains to the US. The Far East could also see prospects in tubes for the two-wheeler industry.”
The company is setting up an aluminium frame bicycle facility at its existing plant in Ambattur, Chennai. While the focus will initially be on the domestic market, substantial volumes in exports may come in next year, mainly to Europe, said Ramkumar. “A few overseas customers have approached us for samples,” he said.