TII plans Rs 600 cr capacity expansion

Tube Investments of India Ltd (TII), part of $3-billion Murugappa group, is planning to set up green field facilities to manufacture bicycles, tubes and chains. The company has said it would invest around Rs 600 crore in these facilities.

L Ramkumar, managing director, TII, said that in the year 2010-11, the company has reached almost full capacity across all the businesses including bicycles, tubes and chains. The company is planning to increase its capacity by 30-35 per cent, across the segments, in the current fiscal. It will be a combination of both green and brownfield expansions with an investment of around Rs 500-600 crore.

The proposed expansion, to be funded through internal accruals and debt, will be completed and will come into operation by the end of the current fiscal.

The Rs 3,130-crore TII consists of TI Cycles of India, Tube Products of India, TI Metal Forming (including Chains). In bicycles, TII is the second largest manufacturer with well-known brands - Hercules, BSA and Philips.  

As part of its diversification plan, TII is looking for a partner to manufacture side panels and bodies for metro coaches, said Ramkumar.

The company has reported a turnover of Rs 3,130 crore in 2010-11, a growth of 27 per cent over the previous year. “This was year of landmarks with good performances from all business segments. Despite capacity constraints in two of our businesses, the company did well to improve its operating profit through a focus on product mix, higher asset and people productivity and benefits of new product introductions,” said Ramkumar.

"All the business segments performed well. The good performance in the Engineering and Metal Formed Products businesses was on the backdrop of a strong growth of 26 per cent in the auto industry," he said.