Financial Daily from THE HINDU group of publications
Sunday, Jul 04, 2004
Financial Daily from THE HINDU group of publications Sunday, Jul 04, 2004 |
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Corporate
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Outlook SKF sees growth in bearings demand — Ties up with Texmo to increase rural presence R.Y. Narayanan
Coimbatore , July 3 SKF India Ltd (SKFIL), a major manufacturer of bearings and oil seals, riding on the boom witnessed by the automobile and manufacturing industries, looks for a better performance during the current year than the previous year's 19 per cent growth. It is also trying to extend its reach in the rural markets and has tied up with a Coimbatore- based pump manufacturer Texmo Industries to meet the needs of the replacement market in rural areas through the latter's retail distribution channels and is open to more such alliances. The company is also trying to enlarge its activities, from being a product manufacturer to a provider of solutions and services since it provided a higher margin. Mr Rakesh Makhija, Managing Director, SKFIL, Mumbai, told Business Line here that automobile and industrial customers in both OEM segment and replacement market provided equal business to it. The buoyancy witnessed by these sectors had helped the company post robust growth in the past two years-by 19 per cent in 2003 (calendar year) and by 15 per cent in 2002. In the first quarter of current year (January-March 2004), the sales income went up to about Rs 130 crore (Rs 106 crore), a 24.1 per cent growth and net profit improved to around Rs 13 crore compared to Rs 4.9 crore during the same period last year. He said the company's area (of focus) also was changing - from that of a product manufacturer to that of a provider of solutions, more of customisation, more of services, applications etc and such activities have been helping the growth of the company substantially. The company acquired the business of Chennai-based Vibration Engineers and Consultants (VEC), which was a small company but in the strategic area of services that SKFIL wanted to focus. He said VEC has an order backlog of about Rs 10 crore and in the next two years, this would go up to Rs 25-30 crore following its take over by SKFIL. Service income provided high margins and it helped the company to position itself with the customers more effectively. Mr Makhija said the Indian bearings market was worth about Rs 3,400 crore annually with the share of the organised sector being around Rs 2,500 crore and rest accounted for by the unorganised sector. The industry was clocking an annual growth rate of 7-8 per cent in line with the industrial growth on which it was dependent. But SKFIL has stayed ahead of the market by posting a higher growth and part of the reason for it was the desire of the industries to go up the quality chain using genuine, high quality products.
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