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Thursday, Jun 09, 2005

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Sona Group on an expansion spree

Neha Kaushik

New Delhi , June 8

THE Rs 660-crore Sona Group has charted out aggressive growth plans for two of its key group companies — Sona Okegawa and Mahindra Sona — and invest upwards of Rs 80 crore in the two firms over the next couple of years.

The auto components manufacturing Group plans to double production of bevel gears at the facility of Sona Okegawa, a 60:40 joint venture with Mitsubishi Materials Corporation (Japan), to six million units.

"Apart from expanding capacity at the Gurgaon unit, we are also setting up a unit at Pune. We are looking to replicate our Gurgaon unit in the western region, in order to cater to customers in the South and the West as well as overseas customers.

We would be investing about Rs 40 crore for the same," the Sona Group Chairman and Managing Director, Dr Surinder Kapur, said.

The Rs 80-crore Sona Okegawa's exports too are expected to account for about 35-40 per cent of sales in the next three years, up from the current 12 per cent.

"We may also look at roping in a private equity investor in the next couple of years to help fund the company's expansion plans," Dr Kapur said.

The Sona Group is also looking at backward integration at the Rs 120-crore Mahindra Sona, a joint venture with Mahindra & Mahindra, and is planning to set up a unit to make precision forgings.

This would provide a thrust to the company's exports, which are expected to cross the Rs 100-crore level in the next couple of years compared to the current Rs 53 crore.

"We are also at present examining the possibility of setting up an assembling line under Mahindra Sona in the US, and are in discussions for the same with one of our customers", Dr Kapur said.

Mahindra Sona, is a joint venture between the Sona Group and Mahindra and Mahindra, with both partners holding a 37.5 per cent stake each, and the balance 25 per cent being held by private equity investors.

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