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Chennai-based auto components manufacturer Rane Group is planning to invest around Rs 220 crore to expand capacity in the current financial year.
The proposed capital expenditure would mainly go into expanding the capacity at its Haryana plant for manufacture of electric power steerings, and the hydraulics business in Rane Madras facility. The group is also investing in expanding capacity for airbags at Singapermual kovil facility near Chennai, said L Ganesh, chairman of $494-million Rane Group.
He said the proposed capital expenditure would be done through a mix of debt and equity, and expects the group business to grow 8-10 per cent in the current financial year.
In the last fiscal, the group had reported around eight per cent growth in sales, with Rane Steering contributing 60 per cent to the total sales, he said.
During the last two-three years, Ganesh said, the group’s topline growth had been under pressure and the management had decided to control cost pressure through rationalisation of fixed costs, working capital, inventory and interest cost.
Rane had decided to wind up its Velacherry plant near Chennai, and had planned to shift it to Oragadam within a span of three-four months.
Aerospace
The group is betting big on aerospace business. According to Ganesh, in the next five years, aerospace business, is set to account for about 10 per cent of the group's total revenue.
Last year, the group had invested in Bengaluru-based SasMos, which Ganesh said, was doing well.
“We are looking at one or two investments in aerospace segment. The potential size of the acquisition could be Rs 50-100 crore for companies having a turnover of Rs 400-500 crore," said Ganesh.
Exports
Presently, 17 per cent of the group's revenues come from overseas business, and in the next three years, the company expects it to touch 20 per cent. North America and Europe remain its focus market for exports.
Solar energy
The group is planning to acquire around 50 acre in south Tamil Nadu for setting up a solar farm.
In the current fiscal, it is planning to set up a one-Mw capacity solar plant, which could be expanded to 10-Mw in the future.
“It would be for captive consumption and the plant would not be managed by the company," said Ganesh. The group operates 10-Mw wind farm in Tamil Nadu.
The proposed capital expenditure would mainly go into expanding the capacity at its Haryana plant for manufacture of electric power steerings, and the hydraulics business in Rane Madras facility. The group is also investing in expanding capacity for airbags at Singapermual kovil facility near Chennai, said L Ganesh, chairman of $494-million Rane Group.
He said the proposed capital expenditure would be done through a mix of debt and equity, and expects the group business to grow 8-10 per cent in the current financial year.
In the last fiscal, the group had reported around eight per cent growth in sales, with Rane Steering contributing 60 per cent to the total sales, he said.
During the last two-three years, Ganesh said, the group’s topline growth had been under pressure and the management had decided to control cost pressure through rationalisation of fixed costs, working capital, inventory and interest cost.
Rane had decided to wind up its Velacherry plant near Chennai, and had planned to shift it to Oragadam within a span of three-four months.
Aerospace
The group is betting big on aerospace business. According to Ganesh, in the next five years, aerospace business, is set to account for about 10 per cent of the group's total revenue.
Last year, the group had invested in Bengaluru-based SasMos, which Ganesh said, was doing well.
“We are looking at one or two investments in aerospace segment. The potential size of the acquisition could be Rs 50-100 crore for companies having a turnover of Rs 400-500 crore," said Ganesh.
Exports
Presently, 17 per cent of the group's revenues come from overseas business, and in the next three years, the company expects it to touch 20 per cent. North America and Europe remain its focus market for exports.
Solar energy
The group is planning to acquire around 50 acre in south Tamil Nadu for setting up a solar farm.
In the current fiscal, it is planning to set up a one-Mw capacity solar plant, which could be expanded to 10-Mw in the future.
“It would be for captive consumption and the plant would not be managed by the company," said Ganesh. The group operates 10-Mw wind farm in Tamil Nadu.
