Financial Daily from THE HINDU group of publications
Friday, Dec 20, 2002
Financial Daily from THE HINDU group of publications Friday, Dec 20, 2002 |
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Corporate
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New Projects MUL to set up foundry for cylinder heads V.K. Varadarajan
GURGAON, Dec. 19 MARUTI Udyog Ltd (MUL), India's largest manufacturers of passenger cars, has decided to set up an aluminium foundry to produce cylinder heads and blocks and transmission cases to reduce the dependence on imports. The company's requirement of these critical components is met through imports for some of its models. The proposed plant, to be located in Manesar in Haryana, will reduce the burden on imports to a great extent. According to Mr I.V. Rao, Chief General Manager (Production and Engineering), the plant is being set up as a joint venture with Suzuki Motor Corporation (SMC), MUL's majority stake holder in the car project. The Rs 120-crore project will achieve its peak production within a year after its slated commissioning in July next. The joint venture will have equity of Rs 25 crore, with Suzuki having a stake of 51 per cent. He said the foundry with a capacity of 5,300 tonnes a year would help MUL localise these critical parts for its Euro II norm engines. It would save Rs 80 - 90 crore worth of foreign exchange incurred on sourcing them for its midsize car Esteem completely and for Zen partially. Both these cars are run with complete aluminium engine blocks. The aluminium foundry would be making cylinder block for Zen (1 litre) and Esteem, Gypsy and Versa (1.3 litre). Maruti 800, Omni, Alto and Wagon R use ferrous blocks. The company would continue to buy the 2v/1c engine cylinder heads from vendors for Maruti 800, Omni and Zen. Mr Rao said the setting up of the foundry was a part of the company's strategy to achieve an overall reduction of production cost by 30 per cent in the next three years.
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