Bangalore, Sept. 4
TITAN Industries is giving a thrust to its precision engineering business and expects to invest in scaling the Rs 20-crore business to Rs 400 crore in the next 4-5 years, on the back of strong customer demand for contract manufacturing of precision components and assemblies.
Mr Bhaskar Bhat, Managing Director, told Business Line that although the business was doubling, albeit on a small base, the opportunity was huge and it was a Rs 1,25,000-crore market.
"It is poised to be a Rs 400-crore business in the next 4-5 years, mostly through exports but also catering to global corporations with Indian sourcing outfits," Mr Bhat said.
Global auto and aerospace majors are developing their sourcing strategies from India and Titan is focussed on these sectors while also planning to enter the medical implants/instruments industry. Investments in the division could be about Rs 60-70 crore over the next three years both from the money raised through the rights issue as well as through internal accruals.
"These orders are long-term - over 5-7 years - and give stability to our revenues and even out the fluctuations in our other businesses,'' he said.The company which approved the issue of partly convertible debentures for Rs 126.83 crore, expects to invest in the precision engineering business, use the funds towards working capital of its jewellery division as well as to IT enable the time products business and in retailing. Titan plans to retire some of its high cost debt of Rs 350 crore through about Rs 51-52 crore of the debt component in the debenture issue, but the full-year effect would be seen only next fiscal as the issue might happen only in January, he said.
Titan Industries had announced its strategy to grow the business through making single components for global customers followed by tie-ups with technology providers to move up the value-chain.
Mr Bhat says the company has plans to offer automation equipment to customers with line automation as a service and the equipment as a product. The company supplies high precision (medium to small) parts and systems and components to Ford in Europe, Eton Corporation and United Tech, in the aerospace sector.