Pragati Automation to enter Chinese market

Bangalore-based Pragati Automation Pvt Ltd (PAL), an Ace Group company engaged in the manufacture of servo drives and motors, is foraying into Chinese market with the setting up of its assembly plant in Shanghai. The company is also expanding its capacities in Bangalore, Belgaum and Kolhapur in Maharashtra. It has drawn up a capital expenditure plan of Rs 50 crore for expansion, a top company official said.

“The demand for machine tools in China is over 50 times than that of India and there is a huge potential for us to manufacture and sell in that country. We have acquired 2 acres land in Shanghai and would start building our factory next month at an initial investment of Rs 15 crore. We will further expand depending on the market demand for our products,” Ashok V Sathe, chairman, PAL said.

 

It manufactures tool turrets, tool discs and automatic tool changers for machining centres under the brand name ‘Pragati’. Turrets are specialised sub units for CNC lathes. The company would also expand capacities in all its three plants in Bangalore, Belgaum and Kolhapur to cater to the growing demands for its products. Currently, Pragati manufactures 500 turrets and 200 automatic tool changers per month and post expansion the capacity would double for each product, he said.

In China, the company would buy castings from the local manufacturers and use it for its products. It will source some of the components from India to manufacture the end products for the Chinese market. “By setting up of a plant in China we want to leverage the low cost advantage for both the Chinese market and Indian operations,” Sathe said.

Currently, Pragati exports 40 per cent of its production all over the world, mainly to Poland, Germany and other European countries.

PAL’s in-house R&D division is currently developing CNC controllers, which are imported by Indian industry. The product would be launched by next year, he said. Apart from building a new manufacturing facility in China, Pragati is also setting up a new factory in Belgaum at a four-acre plot on the city outskirts.

The total investment would be in the order of Rs 50 crore for all expansion works, Sathe added. The company, which reported a turnover of Rs 40 crore in 2009-10, is likely to register Rs 90 crore by March 2011, showing a growth of 125 per cent over the last fiscal.