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Wednesday, July 11, 2001

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Cummins looking at global synergies

Our Bureau

KOLKATA, July 10

CUMMINS India Ltd's customers will be able to access the complete product range available globally from various Cummins entities. Also, according to company sources, a better integration with its world-wide product range has been identified as a ``key ch allenge''.

The ``management discussion and analysis report'' (MDA), incorporated in the Rs 860-crore turnover company's latest annual report, as well as information otherwise provided to shareholders, outline Cummins India's plan to find points of synergy on the in ternational front.

The company has also hinted at undertaking joint marketing efforts with global Cummins entities. The meltdown in the IT and Internet sectors and slowdown in the global economy have placed certain issues before the company's export business. Improved inte gration with the global product range is one such issue.

Cummins India, in recent times, has extended sales of certain varieties of high horse power engines for the European and Asian markets. In the current year, Cummins India has proposed to introduce new models for power generation, industrial and construct ion segments in the 200-400 horse power category.

In an effort to increase after-market revenues, the company has launched an engine census; this would focus on tracking all equipment powered by Cummins. While market conditions and lower investments were dampeners for the overall demand for its products , stronger demand is expected in the latter half of the year, the MDA has stated.

The report has also listed key opportunities and threats. The former include the growth in demand for power in India which has been put at around 5-7 per cent per annum.

The key threats are: Low economic growth and declining investments in manufacturing capacity in 2002; shift from diesel to alternative fuels (such as heavy furnace oil) among users; and the slow pace of de-regulation in the mining sector.

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