Sundram Fasteners to invest ₹750 crore in capacity ramp-up of emerging businesses

G Balachandar | | Updated on: Jun 29, 2022
Suresh Krishna, Chairman, Sundaram Fasteners

Suresh Krishna, Chairman, Sundaram Fasteners | Photo Credit: JOTHI RAMALINGAM B

The company plans to make additional investments of ₹300 crore over the next two years in ramping up capacity in wind energy business

Leading auto parts maker Sundram Fasteners is proposing to invest ₹750 crore, including investments under the PLI scheme, over the next 2–5 years in creating capacity for defence and wind energy parts businesses as well as developing components in emerging technology segments.

Many new products introduced by the company have started growing well, and Sundram Fasteners is no longer a “fastener company, but an “engineering” company as we keep adding engineering products, Suresh Krishna, Chairman of Sundram Fasteners, said while addressing the 59 th annual general meeting of the company virtually.

EV business

He said the EV market was growing in a start-stop kind of mode. It seems like it is growing and suddenly there is a break. The EV infrastructure-related concerns are also impacting the sales of EVs. While there are still a lot of questions about the EV market, a lot of companies are also working on solutions such as hybrid engines, hydrogen, etc. “We still don’t know what will emerge as a final solution, but we are definitely concentrating on EVs. We have the ability to diversify our engineering expertise,” he added.

Sundram Fasteners already has orders worth ₹150 crore for electric vehicle products, and it expects orders more than ₹200 crore for new EV products. The Sri City factory to make products for hybrid and EV vehicles is expected to provide a boost to its EV business.

To focus on diversified products

Arathi Krishna, Managing Director of the company, had indicated that going forward the company would focus on a diversified product range from EVs to non-autos, including aerospace, defence, wind, solar, etc., given growing business opportunities in these non-auto parts.

As a result of the strategy, the company sees significant potential in the wind energy business and plans to make additional investments of ₹300 crore over the next two years in ramping up capacity. It has expanded its range of fasteners in the wind energy segment and has also started exporting them.

Export opportunities

Exports (including subsidiary operations) bring about 35 per cent to the overall revenue of the company. “Export markets have been a great boon for enhancing our topline,” said Suresh Krishna.

As the Atma Nirbhar initiatives of the government provide opportunities for the private players, Sundram Fasteners is working with the defence establishments and is in the process of getting customer validation for various parts. It plans to produce and supply value-added sub-assemblies. To grow this business, the company is planning to invest more than ₹100 crore in the next two years.

The ₹4,198 crore company is proposing an investment of ₹350 crore under the PLI scheme for the manufacture of Advanced Automotive Technology (AAT) components such as powertrain sub-assemblies for electric vehicles and select Internal Combustion Engine (ICE) vehicles. It has secured firm orders from global OEMs for the supply of components under their EV programmes. The company has already got approval from the government for its PLI investment.

Published on June 29, 2022
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