The plant was inaugurated by Alexander M Seitz, corporate executive director, Volkswagen AG of Germany on Friday.
Set up with an investment of Rs 35 crore, the plant will initially cater to Volkswagen group. REVL will supply valves to the Volkswagens 1.6 litre and 2.1 litre state-of-the-art new petrol engines at Germany and also supply to Skodas plant in Czeck Republic, said L Ganesan, chairman, Rane Group.
Addressing a press conference, he said the plant will have an initial capacity of six million units per annum which will be scaled up to 25 million in tranches of three million units per annum within the next three years for which, the company will be investing Rs 75 crore more.
We have started trial production and waiting for statutory approvals from the government. We expect to commence the commercial production from April onwards, he added.
With the fresh capacity, the total engine valves supply to Volkswagen group will go up to 11 million units per annum, he said. The company is already supplying to the German car major from its Hyderabad unit.
We expect Rs 20 crore sales in the first year of operations, he added.
In continuation of our long-term relationships with Hyundai and Deutz of Germany, the company will be adding two more dedicated engine valve lines in this plant to meet the requirement of these two players. We will finalise plans for the same in the next few days, he added.
With this fresh capacity, the total capacity of REVL (across 5 plants) has gone upto 42 million units per annum,.
Currently REVL contributes 20% of the groups total turnover and the same is expected to go up substantially. Of the total production of 42 million units of engine valves, nearly 40% of them are exported while the rest will be sold in domestic market, he said.
Volkswagen bets big on India
Volkswagens corporate executive director Alexander M Seitz, said: We are bullish on this strategic relationship. We expect based on our current global outsourcing plan, sourcing from Rane group will go up to $36 million in the next few years from the current $12 million.
Announcing the global plans, he said that the overall production capacity of the group will go up to 10 million units from six million units by 2010.
The Chakan plant will start production in 2010 and the CKD version of Audi by later 2008 which will have a capacity of 1,00,000 units at Aurangabad. The company is also planning to launch its other cars Skoda Fabia and AG during next year.
We are in talks with various raw material suppliers to make India a major outsourcing hub. We plant to invest 75 million euro towards the outsourcing from India, he added.