Sundaram Fasteners looks overseas

Kolkata: In a bid to enhance its global focus, Sundaram Fasteners Limited(SFL), a flagship company of the $3 billion TVS Group, has announced that it would acquire a North America-based automotive component manufaucturing company.

'We have decided to acquire a company, possibly close to Detroit with the objective of establishing our base in US. Our company already has the requisite customer base in the region and we are hopeful of completing the acquisition process next year', Sampath Kumar Moorthy, president of SFL said.

SFL's latest manufacturing facility was commissioned recently in Rudrapur in Uttarakhand and this plant would manufacture all the products in the company's portfolio.

Moorthy denied that his company was planning to set up a manufacturing base in Singur, West Bengal, adding that SFL would supply the auto components to Tata Motors for their Rs 1 lakh car project from its Rudrapur plant.

He was also bullish on the sales of the automotive products despite the slowdown in the auto industry.

He did not comment on the investment figure for the overseas deal, but hinted that the acquisition cost would be around 50 million euro, with the acquisition being funded through debt.

SFL's would provide prompt delivery of equipment to all clients and manufacture all products locally using technical expertise acquired, Moorthy told mediapersons on the sidelines of the 34th national management convention, organised by the All India Management Association. The company expected share of overseas revenues to go up from the existing 42 per cent to 50 per cent in the next two years.

On a long-term basis, SFL expected the overseas revenue share to reach 75 per cent.

He assured that the domestic operations would not be diluted.

Last year, the company posted revenue of $394 million, of which $84 million came from overseas operations. SFL was streamlining operations and changing the product portfolio and the product applications. The company's consolidated turnover for 2006-07 stood at Rs 1600 crore with year-on-on growth of around 15 per cent.

As of now, SFL's overaseas subsidiaries included Cramlingtin Precision in UK, Piener Umformtechnik in Germany, Sundram Fasteners Zhejiang Ltd in China and Sundram Bleistahl and Sundram RBI Sdn Bhd in Malaysia.

SFL's product portfolio comprises high tensile fasteners, cold extruded parts, powder metal parts, iron powder, radiator caps, gear shifters, hot forged parts, precision forged differential gears, and water pumps to name a few.