Carraro Group to hike production capacity

Tractors and transmission manufacturer Carraro Group plans to expand its production capacity in India. The ¤ 668-million (Rs 3,874 crore) company will also use India as a base for its high-design development projects.

Carraro Group Chairman Mario Carraro told mediapersons on Tuesday that the company would invest ¤ 15 million (about Rs 8 crore) to expand the capacity of its transmissions manufacturing from 20,000 now to 35,000 in the next couple of years.

Some of the products planned to be manufactured at the expanded facility are being relocated to India from the company's locations elsewhere in the world, Carraro said.

"We will continue to invest strongly in India because of the high quality of production to make India the hub to service the company's markets in the Asia Pacific region," he said, adding that the company also considered India as a market that is growing at a high pace.

Carraro India Limited was started in 1999 as a joint venture between Carraro and Escorts Limited of Rajan Nanda Group.

The company manufactures axles and drivelines for tractor and farm equipment and transmissions for industrial applications. The Carraro Group has since taken over the Nanda's stake in the company and runs the operation as its Indian arm.

The group has also set up Turbo Gears India Limited that manufactures gears for diverse applications.

About 70 per cent of the group's production in the two Indian units is exported to global customers such as Deere & Company, USA, and Caterpillar or Volvo.

The company is also an OEM supplier to many Indian tractor manufacturers including Mahindra & Mahindra, TAFE, New Holland and Escorts.

Earlier in the day, the engineering design unit of the group, Carraro Engineering Technologies India Limited, was inaugurated.

This global design centre - set up with an investment of about Rs 6 crore - will be devoted to research and development of high-end futuristic products for the world market.

The company has five such design units including three in Italy and one each in Germany and Argentina.

Marco Teccio, vice-president (engineering) at Carraro, said the Indian engineering centre would collaborate with the company's other centres in the development of new generation applications intended to save on cost and fuel consumption.

"The research in India will be in mechatronics and even hybrid technology development for the company's global research programme," he said.

Mario said the group expected its Indian operations to grow substantially in the next three years, and the revenues are expected to nearly double over the period from Rs 266 crore to Rs 570 crore in 2009.