I N D I A ’ S N O . 1 M A G A Z I N E F O R A U T O M O T I V E N E W S , V I E W S & A N A LY S I S
Auto Monitor ns Tur w No
ly k e We
Vol. 12 No. 17
18 June 2012
w w w.am o n l i n e.i n
24 Pages
FOCUS
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CORPORATE LOGISTICS – TOP OF THE AGENDA FOR CEOS
NEW MATERIALS Pg 9
Pg 8
Alicon Castalloy may expand capacity with higher revenue share from non auto business Abhishek Parekh Mumbai
F
ew castings suppliers can continue to sustain their business topline after losing revenue from key product to a plastic based substitute. Pune based Alicon Castalloy (formerly Enkei Castalloy) is one such aluminium castings supplier that derived a major proportion of its revenues from four wheeler and two wheeler segment a few years back and is now looking to emerge as a major aluminium castings supplier for auto and non- auto segments. “We acquired Illichmann Castalloy’s operations in Austria and Slovakia to gain access to technology and customers. Moreover, this company operated in a niche space in the non auto or industrial space and has been
instrumental in getting us additional business and expertise in non-automotive segment,” said Group Chief Executive Officer, Alicon Castalloy, Rajiv Sikand. He added that Alicon Group is currently in the process of evaluation regarding which manufacturing unit should be the key manufacturing base and which ones should play a supporting role in the group’s growth agenda. By the end of the year, it is looking to shift most European operations to Slovakia as well as shift significant quantum of plant and machinery from Slovakia to Indian units. One of the major issues that the company, and other castings suppliers, are dealing with is increasing preference of car manufacturers to opt for plastics based components for weight reduction and cost efficiency. For instance, the company
A key issue for castings makers is peference of car makers for plastics based components for weight reduction & cost efficiency lost a major product segment – intake manifold accounting for around 55 to 60 percent of its volumes mainly for Maruti Suzuki- to plastics technology few years ago. It continues to supply cylinder heads to the four wheeler segment but is counting sustained growth in two wheelers sales for garnering additional business in the automotive sector. It is evaluating on setting up another facility to increase its capacity further and Pantnagar
may be one of the likely location for the new facility. Currently it is exporting around 10 percent of its production from Indian facilities located at Pune and Binola. The company acquired Illichmann Castalloy, with operations in Austria and Slovakia, in order to diversify its revenue and customers base. Though operations in Austria continue to be a drag on the company’s consolidated performance, the facility in Slovakia has enabled the company to evolve as a major player in the non-auto space. These operations had an established and diversified customer base in Europe. The company is looking to reduce its operations in Austria from around 50 employees to six and shift major part of the operations to its more cost efficient Slovakian facility. Sikand also points out to the process
SMIPL merges with MSIL to bring better synergy Nabeel A Khan New Delhi
M
aruti Suzuki India Limited (MSIL) recently approved a proposal to merge Suzuki Powertrain India Limited (SPIL) with itself. With merg-
DATA MONITOR Top 5 Car Makers Company
May-11
May-12
Change
Maruti
93,519
89,478
-4.32%
Hyundai
31,123
32,010
2.85%
TML
22,718
25,623
12.79%
M&M
17,966
23,478
30.68%
7,470
15,501
107.51%
TKM
Top 5 Car Exporters Company
May-11
May-12
Change
Hyundai
16,643
23,659
42.16%
Maruti
10,554
9,406
-10.88%
Nissan
3,937
8,157
107.19%
Ford
2011
1693
-15.81%
Toyota
-
1,693
#DIV/0!
* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL
er, Suzuki Motor Corporation’s (SMC) holding in MSIL will go up from 54.2 percent to 56.2 per cent. SPIL, which supplies diesel engines as well as transmissions for vehicles to MSIL, is a subsidiary of Suzuki Motor Corporation (SMC), Japan with Maruti Suzuki holding around 30 percent stake. “With this there will be lot of synergy and will help us in being able to enhance diesel engines development. It should also give some advantage in terms of cost effectiveness.” Managing Executive Officer (Engineering), Maruti Suzuki India, IV Rao told Auto Monitor. With the merger, MSIL will be able to bring its entire diesel engine capacity under a single management control. All key initiatives to strengthen the business, including sourcing localisation, production planning manufacturing flexibility and cost reduction can be controlled, monitored and improved by the MSIL management, according to a company statement. The proposed merger also promises benefits for the combined entity through synergies
technology related learnings for Alicon Group in the non auto related castings products. “We are in the process of absorbing and migrating to process excellence as practiced by Illichmann that is enabling us to change our dies every third or fourth day. We can provide precision aluminium based castings in very high as well as low quantity for variety of applications in the automotive and industrial space. Very few castings manufacturers globally can claim to possess this capability of manufacturing components in high and low volumes based on customer specifications,” he said. The company’s total revenues for the year ending March 2012 stood at `380.82 crore as compared to `256.67 crore in the previous year. The net profit stood at `22 crore (`14.63 crore) in the last fiscal.
Prasad Kanuri takes over COO at Jaya Hind Our Bureau Mumbai
J
aya Hind Industries Ltd appointed Prasad Kanuri as its Chief Operating Officer. He has over three decades of experience in auto components and engineering industry. He has diverse experience in auto component industr y including mergers,
Shinzo Nakanishi, MD and CEO, Maruti Suzuki
in areas like finance, capital structuring and administration and consequent reduction of transaction costs. There will be no cash outflow from MSIL. The swap ratio has been fixed at 1:70. SMC will receive one share of MSIL (of `5 each) for every 70 shares (or `10 each) it holds in SPIL. MSIL proposes to make a fresh issue of
13.17 million shares to SMC in lieu of SMC’s 70 percent holding in SPIL. It is expected that the necessary regulatory approvals and legal requirements for the merger may be completed by end December 2012. Once the merger is approved, the books of accounts of SPIL will be merged with MSIL with effect from April, 2012.
acquisitions and alliances, business development, sales and marketing, and operations management and quality control. He joins Jaya Hind Industries Ltd., from his previous position as Chief Operating Officer at Sandhar Technologies.