Precision Group acquires 100% stake in JV firm

Precision Group, a manufacturer of camshafts, today, announced the acquisition of the joint venture (JV), Clancey Precision Components Private Limited (CPCPL), which it had with the UK-based company G Clancey Ltd, at a press conference here.

The company earlier held a 49 per cent stake in the joint venture with G Clancey Ltd holding 51 per cent and it has now acquired 100 per cent ownership interest as the UK-based supplier of camshafts got into financial distress and went into an insolvency.

With this move, the company attains the status of a global supplier across India, Europe, Latin America.

Yatin Shah, managing director, Precision Group said, "The JV acquisition is an important step for Precision Group?s long term business strategy as it removes restrictions on direct marketing which hitherto were bound by the JV agreement."

Precision had in the past announced a Rs 100 crore expansion plan for ramping up its production capacity from 3.6 million units of shafts in 2006 to 12 million camshaft units in 2010 and for strengthening its global position.

"The company is now looking at an annual revenue of more than Rs 125 crore for the financial year 2007-08 and achieve the Rs 350 crore mark by 2010. We are planning to increase the head count by over 1,000 people in the next 24 months, and quadrupling of the current facilities," said Shah.

By the beginning of next year it will begin the expansion of current manufacturing facility at Chincholi in Maharashtra.

"We are mulling an investment of Rs 20 crore to set up a machine shop in Chennai to service Hyundai as we are nominated to get a new order worth Rs 35 crore for machined camshafts from them. We would also set up a machine shop in Uttaranchal to cater to the needs of Tata Motors in their upcoming project in the state," he said.

The company has already raised Rs 30 crore through debts which would support our expansion plans till 2007-end. "We are in the process of selecting the right strategic investor for the additional Rs 70 crore funds," said Shah.

At present, the company has a 85 per cent of the domestic market and four per cent of the global top 10 manufacturers market share in the passenger car and multi utility vehicles (MUV) automobile segment. "By 2010 we will cater to 15 per cent of the global requirement for passenger cars and maintain the 85 per cent domestic market share for camshafts," said Shah.

Over the past few months, Precision has added new customers, BMW and Porsche to its clientlist which boasts of clientele like General Motors , Hyundai, Tata Motors and Ford to name a few.

"We have received business of over Rs 15 crore from Porsche to deliver 200,000 camshafts per annum and Rs 10 crore contract from BMW for an order of 2,50,000 camshafts per annum," said Shah adding the potential business opportunity with existing clients like General Motors, Ford and Hyundai is of over Rs 125 crore.