Ennore Foundries eyes 40% growth in exports

Post the ongoing Rs 350-crore capacity expansion, engine blocks and heads manufacturer Ennore Foundries, part of the Hinduja Group, aims to become one of the top global players with a total capacity of about 2.35-lakh tonne a year, besides having a significant presence in the export market by 2010-11.

At present, the export share of the total production is minuscule. The company, however, is looking at exporting 20-25 per cent of its total production over the next two to three years, V Mahadevan, managing director of Ennore Foundries, said.

Ennore Foundries has a 66,000-tonne unit at Ennore and a 36,000-tonne facility in Hyderabad. It had also set up a greenfield foundry at Sriperumbudur near Chennai with an initial capacity of 50,000 tonne, involving an investment of Rs 200 crore.

The Sriperumbudur facility, which has come up on a 40-acre site, has stabilised production from the first week of January and will formally be inaugurated in a couple of weeks' time. About 40 per cent of the production from this unit will be exported and the capacity will be scaled up to 72,000 tonne by 2008-09 through additional investments.

The facility comprises a pattern and tool shop, design centre with CAD/CAM machines and related software, making it a one-stop-shop for supply of castings, besides enabling the company to shorten the leadtime to 5-6 months from 12 months for product development, Mahadevan added.

Ennore Foundries is making further investments of Rs 350 crore, spread over two years, to establish a new SG iron castings unit in Hyderabad with a capacity of 48,000 tonne a year and a low pressure die casting (LPDC) line for aluminium with a capacity of 15,000 tonne a year, apart from setting up machining and auto core-making facilities at Sriperumbudur.

The company will raise up to Rs 100 crore through issue of GDRs to fund its expansion. The remaining portion will be funded through a mix of equity, debt and internal accruals, said V Sankar, CFO, Ennore Foundries.

For the for the nine-month period ended December 31, 2007, Ennore Foundries posted net sales of Rs 321.51 crore, up 12 per cent over Rs 286.02 crore during the same period previous year.