Ancillary suppliers ride on Rail Coach Factory's growth

From a modest beginning in 1988-89 with an output of 120 coaches, the Kapurthala-based Rail Coach Factory (or RCF, a production unit of the Railway Ministry) has so for manufactured 23,000 coaches.

This has brought cheer to about 500 ancillaries of the northern region, which supply components to the factory.

These ancillaries are not only expanding their manufacturing capacity to keep up with demand but also equipping themselves with the latest technology.

The establishment of the rail coach factory at Hussainpur (near Kapurthala) in 1987 acted as a trigger for the establishment of several subsidiary units supplying forgings, castings, and furnishings such as seats and berths.

At present about 795 ancillaries across India supply components to the RCF, of which 60 per cent (especially SMEs) are situated in the northern region comprising Punjab, Haryana, Himachal Pradesh and Chandigarh.

“The setting up of RCF at Kapurthala not only attracted ancillaries but also led to rapid growth of SMEs in the region. The best part is that the vendors receive their payments on time,” said a vendor of RCF who also supplies components to tractor manufacturers.

Nitin Peshawaria, proprietor of Alvind Industries, added, “We started with two items in 1989, and now we supply more than 50 items to RCF. The demand for coaches will increase exponentially in the near future, so there are bright prospects for SMEs which supply to RCF. With RCF now focusing more on stainless steel coaches, we also have plans to manufacture stainless steel items. Earlier we were supplying mild steel and carton steel items.”

His company, based at Chandigarh, adds one or two new products to its portfolio every year in order to gain wide exposure to RCF tenders.

RCF produced a record 1,568 coaches in 2009-10. It has set an ambitious target of manufacturing 1,600 coaches in 2010-11, which includes stainless steel coaches for the Rajdhani and Shatabdi Express trains as well as double decker coaches. In the current financial year it has manufactured 675 coaches until August 31.

Speaking to Business Standard, Suresh Jain, a partner in Rail Tech, said, “My company supplies about 400 items like luggage racks, coach chassis (front portion) and end walls to RCF. In order to meet the demand, we have also set up two units in Himachal Pradesh. Further, we are installing laser cutting machines for precision components. Overall, we will invest Rs 4 crore on expansion and technology upgradation.”

Rail Tech also supplies components to the Integral Coach Factory, Perambur (near Chennai) and Bharat Earth Movers Limited, Bangalore. Jain started supplying to RCF in 1991, starting with five items.

Other vendors that supply seats, berths, doors, windows, water tanks and stainless steel components to RCF are also bullish about their prospects. Since the demand for coaches is expected to increase, they expect to grow correspondingly.