Financial Daily from THE HINDU group of publications
Thursday, Jan 10, 2002
Financial Daily from THE HINDU group of publications Thursday, Jan 10, 2002 |
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Corporate
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Alliances & Joint Ventures Bharat Forge in supply pact with Dana Corp Our Bureau
PUNE, Jan. 9 BHARAT Forge Ltd, the flagship company of the Pune-based Kalyani group of industries, said on Wednesday it has entered into an agreement with Dana Corporation, whereby it will supply forgings to the customers of the former's Kirkstall, Leeds-based forgings business. The company also said it was in discussion with at least one Chinese forgings company for a strategic alliance to tap the market for high-quality forgings for the latter's large automobile industry. Dana Corporation is one of the world's largest suppliers of components, modules and complete systems to global vehicle manufacturers and their after-markets. The agreement will give the company access to newer markets, especially in the non-automotive sector which was cyclical in nature, Mr Baba N. Kalyani, Chairman and Managing Director, said. He added the agreement envisaged the supply of forgings to the oil and gas sector and the off-highway equipment. ``The signing of the agreement will give a quantum boost to our exports to Europe and the US and also give us access to at least six new major customers including DaimlerChrysler, Volvo and Renault,'' Mr Kalyani said. The seven-year contract for the supply of forgings would see the company acquiring Kirkstall's forgings business and investing in acquiring its existing dies, designs and tools with a view to cutting lead time in deliveries, Mr Kalyani said. ``The new agreement will start yielding results in the form of enhanced exports beginning first quarter of 2002-03. While we expect exports to increase by at least thirty per cent next year, we are fairly confident of doubling it in two years,'' he added. The company's exports last fiscal totalled Rs 85 crore. The new agreement will help the company, which has been affected by the slump in the domestic automotive sector, to utilise excess capacities. The company is currently running at a capacity utilisation of fifty per cent owing to the fact that the domestic and US market slumped almost immediately after the company invested in fiscal 2000 in a new, large capacity press line. The supplies under the new contract will be made by Bharat Forge from its manufacturing facilities at Mundhwa, Pune. Meanwhile, Mr Kalyani said the company was now in talks with a Chinese company manufacturing crankshafts for a possible strategic alliance to supply the large Chinese automotive sector. ``While China has a large automotive and commercial vehicle industry, it does not have high-quality forgings to supply to the industry,'' he said.
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