Ennore Foundries has been quietly expanding its auto castings. V Jagannathan reports

Chennai: Fifty eight year old V Mahadevan, managing director of Ennore Foundries Limited and vice president of the Institute of Indian Foundrymen has his hands full these days. For the castings company, one of the largest for the auto sector, is not only expanding capacities and modernising its existing units at Hyderabad and Ennore (outlay Rs45 crore) but also setting up a Rs144-crore greenfield unit at Sriperumbudur, near Chennai.

"The machinery installation is under progress. Post expansion the annual capacity at Ennore will be 60,000 tonnes and at Ductron Castings unit (DCU), Hyderabad will be 36,000 tonnes," he explains.

Similarly, the progress in respect of the new 50,000-tonne per annum plant to manufacture grey and S G Iron castings is also progressing well with the company meeting the deadlines. Nearly forty per cent of the production can be dedicated for exports.

Ennore Foundries is also in the advanced stages of acquiring additional 40 acres to build machining facilities, LPDC line for cylinder heads and HPDC line for blocks. "The new plant is scheduled to commence commercial production during the second quarter of the next fiscal."

According to him there are plans to set up windmills for power generation for the new plant.

The company also realigned production focussing on profitable product lines like cylinder heads and engine blocks while drastically cutting down on the brake drums.

"The percentage of production of these cored jobs will be on the increase," Mahadevan adds. He is also confident that his customers will be happy absorb the cost increases without any problems. Excerpts

How do you see the year ahead for Ennore Foundries? For the current financial year, we have projected a growth of around 20 per cent over the previous year. The figure seems to be well within reach.

Are you happy with ennore''s performance till date? Is it in line with your projections? The increased production levels envisaged in the wage agreement has been achieved now and stabilised during the past one month. We will achieve an increase of around 20 per cent in production levels, which will be sufficient to meet the demands of the auto sector clients. We are projecting an export turnover of $2 million this financial year. We have started exports of tractor components to US and Italy.

We were able to achieve a marginal increase in the second quarter profit before tax (PBT) as compared to same period last year. There was a shortfall in our performance as compared to our projections for the first half of the current year due to the gestation time required for stabilising the increased production levels. Now that the increased operations are set, we are hopeful of achieving the projections.

Could you elaborate the segment wise market trend? And how Ennore Foundries is taking advantage of that? Ennore Foundries is predominantly an automotive sector focused casting manufacturing company. We have been increasing our supplies to passenger cars and tractor manufacturers over the past three years. We have now started supplies to a large domestic car manufacturer.

All the segments of the auto industry, be it commercial vehicles, passenger cars or tractor are experiencing unprecedented growth. Going by the macro economic indicators this growth will continue for the next 7 to 10 years. Ennore Foundries has put in place expansion and modernisation plans to take advantage of the market conditions.

On the steps taken to increase your process efficiency and the benefits derived? By installing semi automatic machinery and by adoption of implementing various measures, we have increased our process efficiency. With the same men, the production levels have been increased to 180 tonne/day from 142 tonne/day last year.

Is the any change is realisation per tonne? In addition to the increased realisation by moving towards high end products considering the market situation, we have preferred a 4 - 5 per cent price increase claims with all our customers. The significant price increases are passed on to the customers, as our pricing policy is highly transparent.