Financial Daily from THE HINDU group of publications
Saturday, Dec 11, 2004
Marketing - New Products & Services
Greaves Cotton hopes to ride on 3-wheeler makers' orders Rolls out millionth light diesel engine
(From left): Mr Karan Thapar, Chairman, Greaves Cotton Ltd; Mr Praveen Sachdev, Managing Director & CEO; and Mr B.P. Jetty, Vice-President (Manufacturing), Business Group III, at the rollout of the millionth light diesel engine at the company's Ranipet unit. - R. Balaji
Ranipet , Dec. 10
GREAVES Cotton Ltd, part of the B.M. Thapar group, plans to expand its light diesel engine production facilities through an additional investmentof about Rs 100 crore, according to Mr Karan Thapar, its Chairman.
Addressing reporters at the rollout of the millionth light diesel engine at its production unit at Ranipet, about 110 km from Chennai on the Chennai-Bangalore route, he said that as an independent manufacturer of light diesel engine, the company caters to a wide range of industries such as automotive industry, and agriculture, construction and power generating equipment.
The company expects engine supplies to automotive segment - three-wheeler manufacturers - to be a major growth area. This will be the prime driver of growth for the group that has plans to grow to Rs 1,000 crore in the coming years.
Greaves Cotton's Managing Director & CEO, Mr Praveen Sachdev, said that the demand for light diesel engines had caught on in the automotive segment. The company has emerged as a major supplier to three-wheeler manufacturers such as Piaggio, Mahindra & Mahindra, Atul Auto and Suraj Auto. Greaves's light diesel engines command a 60 per cent market share in this segment.
The company hopes to expand production to about 2,50,000 engines a year from 1,50,000 units. The demand for light diesel engines is on the rise. For instance, it took the company nine years to make its first 1,00,000 engines. The last 1,00,000 engines were made in nine months to touch one million.
Of the six manufacturing plants that Greaves Cotton runs, three are in Tamil Nadu at Ranipet, Gummidipoondi and Thoraipakkam. The light diesel engines are manufactured at Ranipet and its other unit at Aurangabad. Most of the additional investments are to be made at Tamil Nadu unit, which is its largest, he said.
Another potential growth area is supplying engines for quadricycles, four-wheeled carriers that would occupy a segment between three-wheelers and light commercial vehicles. But as an independent engine manufacturer, Greaves Cotton's plans are closely linked to that of original equipment manufacturers. The company hopes to start manufacturing the engines in 2006, he said.
The company is also looking at exporting diesel engines to the US and Europe, where they are needed to power construction equipment and gardening equipment.
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