Chennai: The Chennai-based, manufacturer of manual steering columns and ball joints Rane (Madras) Limited is headed for major expansion.
While inaugurating a new ball joints plant for exports near Chennai on 24th October 2006, the Rs276.3-crore turnover company, is simultaneously putting up a new manual steering plant in Uttaranchal, to cater to the needs of Tata Motors Limited and Mahindra and Mahindra. This plant is expected to go on stream next April.
"The new plant near Chennai was needed as space became a constraint in the existing facility in the city," explains S Parthasarathy, president, Rane (Madras) Limited.
An exporter of ball joints from its Velachery plant in Chennai to TRW Automotive in the US, Rane Madras had been facing space constraints in view of its growing as exports. Therefore, the company decided to set up a new Rs24-crore facility to manufacture an additional 5.65-million pieces, with adequate room for further expansion up to 10 million pieces annually.
"The investment on the building and the new machinery will be around Rs14 crore. We have shifted Rs10-crore worth of machinery from our Velachery factory to the new location," said Parthasarathy.
According to him, the new factory does not have the traditional factory look. "The factory has a modern elevation. The high roof facilitates natural light and also provides the needed cooling effect." The shop floor is designed as a single piece flow system.
The company plans to increase the exports contribution from the present 18 per cent to 25 per cent. Rane Madras will also expand its product range by including hydrostatic steering gear for farm tractors ad rack & pinion steering gear for electric power steering.
The construction of the company's two-phased Uttaranchal plant is progressing well. The first phase of the project would involve an investment of Rs6 crore and the second phase Rs9 crore.
Speaking about the market trend, Parthasarathy said, except for the utility vehicles segment, all others logged impressive growth. Speaking on the future of manual steering systems when hydraulic power steering is replacing it, he said, "It is true that manual steering will decline initially. But with the advent of electric power assisted steering, the demand for manual steering columns will actually increase."
In addition he also said that lower end small cars and farm tractors would continue to have manual steering.
Meanwhile, some more Rane group units are expanding their operations. Rane NSK Steering Systems Limited, which manufactures energy absorbing steering columns is setting up a production facility in Uttaranchal. Similarly Rane Brake Linings Limited and Rane Engine Valves Limited are also contemplating building a new plant in Tamil Nadu.
The group expects the total turnover to increase by Rs200 crore to Rs1,500 crore this fiscal.