| Firm targets global leadership in two years.
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| Pune-based Bharat Forge (BFL) has set a target to become the global leader in its business by 2008, for which it is open to more acquisitions to complement organic growth.
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| However, according to BFL chairman and managing director Baba Kalyani, it does not make a business case for Indian auto component companies to acquire the assets of troubled US automotive component giant Delphi.
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| “We want to achieve global leadership by 2008. Part of that will be organic growth and some inorganic,” Kalyani told Business Standard.
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| In December last year, Bharat Forge, India’s largest auto-components company, gained control of its counterpart in China, a division of First Automobile Works, the country’s largest vehicle manufacturer.
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| The deal with FAW Forging boosted BFL’s capacity by 1,00,000 tonne, taking the total to about 6,00,000 tonne, second only to Germany’s Thyssen Krupp.
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| After the acquisition – Bharat Forge’s sixth in four countries in the past two years – Kalyani said that his company’s global strategy was complete, creating the widespread impression that its appetite had been satiated.
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| Far from it. “Our strategy is complete in the sense that we are now present in all the important markets of the world: North America, Europe and China. In each market, we now need to consolidate and grow,” clarified Kalyani.
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| However, Delphi, in whose assets numerous Indian companies have shown interest, is nowhere on Kalyani’s wish list.
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| “It does not make sense. Delphi will only sell where there is maximum legacy cost (high wages, healthcare and pension costs),” said Kalyani.
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| Moreover, he pointed out, Delphi won’t sell businesses with a future, which have technology and innovation capabilities. “Why buy?” he asked.
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| BFL’s acquisition strategy is guided by garnering customers and getting closer to its big markets. Besides, the outfit being acquired must have enough high technology to complement BFL’s low-cost production base.
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| Besides, Kalyani does not see the not-so-good going by General Motors, one of BFL’s clients, as a business risk. “Cars being made by GM will not disappear. Somebody will make them. We respect GM as a client. Our only concern is that we need to be careful,” he said. |
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