'We expect 35% year-on-year growth over the next five years'

While the global automobile giants are being buffeted by the downturn, Pune-based supplier of conveyor belts and systems to vehicle makers Automag (I) Pvt Ltd is looking at a year-on-year growth of 35 per cent over the next five years. Automag Managing Director Nitin Bhave shares his expansion plans and road map for growth with Kaustubh Kulkarni

While most automakers are reporting declining revenues and auto-component makers dependent on them are crying foul over reduced demand, you have been generating good revenues. How have you managed this?
We are present in a slightly different segment of conveyor belts and systems. Although vehicle sales are falling, major companies have not stopped work at their upcoming manufacturing plants. Right from inception, we have had a tie-up with MKC, Japan, which has helped us draw in a large number of international clients and also maintain high standards of product quality. Although the last year has not been exceptionally good for us, we have India’s biggest car maker Maruti Suzuki as our client and it has been doing very well. Hence, we have performed better even when others have not.

How do you see Automag growing over the next few years? Do you plan to expand manufacturing capacity? Are there plans for equity or private funding?
In 2008-09 we did a turn over of about Rs 70 crore. We expect a year-on-year growth of 35 per cent in terms of revenue for the next five years at least. This will take us to around Rs 300 crore over the next five years. The expansion plans would involve expansion of our manufacturing facility in Pune, which is spread over 3,500 square foot. Also, we are looking at entering non-automobile segments like heavy engineering, white goods and logistics. These industries also need conveyor systems. The funding for this expansion has already been planned.

Despite being a small scale unit, Automag has big names on its client list. How did you achieve this? Can we expect a few additions to this list in the near future?
As of now, we have clients like Maruti Suzuki, Toyota Kirloskar Motors, Honda Siel Cars, Mahindra and Mahindra, Tata Motors, Mercedes Benz and Ford India. We could achieve this because of our extensive focus on training of officials, which happened in collaboration with our Japanese partner MKC. Since inception in 1996, we have maintained very high standards of manufacturing and installation, which has earned us an excellent list of clients. We are looking at other geographies to expand our market.

How have your exports grown over the last few years? Are you keen on pushing exports?
Around 10 per cent of our total revenue comes from exports. However, now we have decided to focus on this segment. Recently, we did installations in Europe, South Africa, Indonesia and Argentina. We are also looking at manufacturing new products like light weight conveyor belts, which will, over the next few years, revolutionise vehicle plants. Indian companies currently make some 15 lakh cars every year. This number is slated to touch 80 lakh per annum by 2020. When this happens, vehicle makers will need better conveyor belts and assembly systems and Automag will then have a greater role to play.