The company is into manufacturing power steering gears for light, medium and heavy vehicles in collaboration with ZF Friedrichshafen, Germany and has made Rs 40-crore investments. The ZF plant in Shirur district, near Pune, has the capacity to manufacture 60,000 numbers. The company has a 60 per cent share in the power steering for the heavy and medium commercial vehicle segment. ZF supplies to various Tata vehicles, Tempo Traveller and Excel, M&M, Punjab Tractors and mostrecently to Volvo.

This year, the company wants to consolidate position in this market and hopes to go nearer to the Rs 50 crore turnover mark. The company had a good year during 1998-99 when net profit went up by 113 per cent from Rs 79.51 lakh to Rs 1.69 crore. Sales turnover went up from Rs 39.92 crore to Rs 42.38 crore. Dividend was hiked from previous years 10 per cent to 15 per cent for 1998-99.

Despite the slow growth in turnover, the company was able to achieve higher profitability by improving operations and increasing productivity. The company concentrated on reducing important content and bringing down costs considerably. ``We have not raised the prices of our products for the last four years and have consistently passed on the cost benefits to our customers,'' says Munot.

The company has indegenised to the maximum extent possible in power steering. Initially the product came with 60 per cent import content now it is down to 15 per cent import content. ``If we have volumes we can indegenisefurther,'' says Munot. As the demand for power steering in the medium and heavy commercial sector has not matured, the company had made successful inroads into manual steering which was developed totally by the Indian plant. Good business from the tractor segment also helped improve the bottomline.

Two years ago, ZF employed 750 persons which has come down to 415 without any drop in production. The company introduced multi-machine operations, changed layout, improved material movement which lowered rejection levels.

The company is also banking on some buy-back arrangement for components from the parent company. ``We are exploring possibilities of exporting components for trucks and buses. A few orders have come in for components and this would increase utilisation of capacity and enable production at lower costs,'' says Munot.

Investments to the tune of around Rs 4 crore has been planned by end of the year for improving productivity. ``These investments will come handy when volumes increase,'' saysMunot who expects the company to grow at least by 10 per cent during 1999-2000.