Amara Raja to invest Rs 130 cr on expansion by Sep 2011

Amara Raja Batteries will invest nearly Rs 130 crore by September next year to hike production capacity in a phased manner and on other capital expenditures.

The company, which is aiming to become a global brand also said it is considering the possibility of setting up a manufacturing unit overseas, preferably in Southeast Asia and Africa.

According to the company's Managing Director Jayadev Galla, the company is expanding capacity at its facility at Tirupati in Andhra Pradesh in order to meet the growing demand of the Indian automotive market.
    
For the ongoing fiscal, the firm will invest Rs 22 crore on increasing four-wheeler battery production to 5.05 million units per annum from the present 4.2 million.
    
It will invest another Rs 35 crore to hike two-wheeler battery production to 3.6 million units per annum from the current 1.8 million units, which will be completed by March next year.
    
The company has earmarked Rs 23 crore to be utilised on on IT and other capex this fiscal.
    
In the second phase of expansion, which will be completed by August-September next year, the firm will invest Rs 47 crore to take the four-wheeler battery production capacity to six million units annually and that of two-wheeeler to five million units.
    
Commenting on the company's overseas expansion plans, Galla said: "We would be looking to become a global company. In the last couple of years we have been studying to set up manufacturing locations overseas as exporting to far off markets is commercially unviable."
    
He, however, said no plan has been finalised yet although "Southeast Asia and Africa seem the most attractive to us".
    
Amara Raja Batteries currently exports 10-15 per cent of its total volume of sales to countries like China, Japan, Australia and other markets in the Middle East, Southeast Asia and Africa.
    
The company, a joint venture between Amara Raja group and US based Johnson Controls Inc, had posted a net sales of Rs 391 crore in the second quarter ended September, while in the last fiscal it had a net sales of Rs 1,465.2 crore.