Once known for its Padmini cars, Pune-based auto and engineering firm Premier is planning to shore up its presence in the engineering sector with plans to take it overseas.
The company currently sells CNC machines and keys components used in wind energy and infrastructure sectors. It now wants to widen its product portfolio to cater to sectors such as defence and railways.
?Over the next five years, Premier plans to augment its presence in engineering activities. We are at present in a \’holding pattern\’ in terms of capital investment due to the slowdown in the economy,? said Maitreya Doshi, chairman, Premier.
?We are working on widening our product portfolio to cover heavy, complex machines and fabricated parts to areas like defence, railways and other core sector areas as they will always be central to India\’s economic planning and growth,? Doshi added.
Revenues from the engineering segment stood at R51 crore for the quarter ending December 31, 2012 as against R49 crore in the same period last year, a growth of 4%. Automotive segment revenue stood at R20 crore for the December quarter as against R15 crore in the same period last year, a growth of 33%.
Doshi added that the company is looking at ?monitising non-core assets such as land in order to provide resources to grow the company\’s main business,? which is engineering, manufacturing and industrial activity. In January, Premier received R220 crore as part of an agreement it entered with Horizon Projects , part of the Runwal Group for the development of affordable or middle-income housing project on its 150 acres land parcel in Dombivli, Mumbai. In 2005, Premier sold a 36-acre land at Kurla to Kohinoor Constructions, a real estate company promoted by Manohar Joshi, a senior Shiv Sena politician for R110-crore. The proceeds from the Kurla sale were reinvested to create its present plant capacity at Chinchwad, Pune. Moreover, Premier plans to establish a market presence in countries like the US, Brazil, Indonesia and Turkey for its CNC machines in the next three years. ?This may include local distribution, warehousing and technical support for machines made and supplied from India,? said Doshi. A CNC machine is a machine tool that uses programs to automatically execute a series of machining operations. CNC machines offer increased productivity and flexibility. Asked about its plans in the automobile sector, Doshi said that the company would continue to operate in the ?niche segments by being viable at low volumes through a judicious mix of controlled investment and strong outsourcing.? Premier currently sells a compact sports utility vehicle (SUV) Rio and commercial vehicle Roadstar.
?We expect to reach about 85% localisation on Rio in the next 12 months. This will help in bringing down product cost and reduce volatility due to exchange variance,? said Doshi.