Delhi-based auto component major Shriram Pistons & Rings Ltd will invest close to Rs 700 crore in the next five years. The entire amount would be raised through a mix of internal accruals and debt. This is part of the company?s plans of clocking a turnover of Rs 1,000 crore by 2012.
The company will invest Rs 200 crore in the first phase at its manufacturing facility at Pathredi in Rajasthan. ?Our new plant in Rajasthan would be catering to all OEMs and we would be manufacturing pistons and rings,? Ashok Taneja MD and CEO of the company told FE.
Over the next five years, the company will look to invest roughly Rs 100 crore annually for capacity building. ?Starting January 2011, we are looking to invest close to Rs 100 crore every year for the next five years,? Taneja said.
The facility on a 25-acre land in Pathredi is the company?s second production unit. The company set up its first plant in Ghaziabad. Taneja said that the plans of expanding its production capacity were fuelled by optimism in the domestic auto market and export potentials. ?The domestic demand is very good and there is a lot of potential for exports as well,? Taneja said.
Currently, the company manufactures 5.5 million rings and 1.2 million pistons per month at its Ghaziabad plant. ?We have plans of upgrading our Rajasthan unit to the Ghaziabad plant level in coming years,? he said, adding that ?initially the Rajasthan plant would be hitting one-fourth of the capacity of its Ghaziabad plant.?
Sensing the buoyancy in the domestic market, many auto ancillaries are expanding after a lull year. On Tuesday, the Munjals-promoted Hero Motors announced a joint venture with the German firm ZF-Lemforder to expand its presence in chassis and axle systems for small cars.
Commenting on the February auto sales figures, Taneja said that consumers sensed that the government would be looking to withdraw the stimulus measures it had announced. Hence, they made the purchases earlier.