Suprajit Engg to rely less on 2-wheelers

Bangalore-based Suprajit Engineering Limited, one of the most dynamic SMEs in the auto components field, is seeking to beat the present slowdown in the sector by diversifying from its main line of cables for two-wheelers to passenger cars.

It will reduce its reliance on two-wheelers to 40 per cent of its sales from the present 60 per cent in three years, with the reverse "� 40 per cent to 60 per cent "� happening to its revenue from passenger cars.

The Rs 206-crore company, which has already bagged an order from Tata Motors to supply automotive components like parking brake, clutch and throttle cables for their Rs 1-lakh car project, is pitching for an order to supply of gear shifters also.

According to Ajith Kumar Rai, managing director, Suprajit Engineering, the company has acquired the necessary know-how for gear shifters for passenger cars through a technical tie-up with Korea's Michang Cables.

"We have been diversifying from automotive cables to various automotive components over the last two years as a growth strategy. Apart from Tata's Rs 1-lakh car project, we are also bidding for an order from Mahindra & Mahindra for one of their future products," Rai told Business Standard.

The auto sector slowdown means Suprajit Engg plans to grow its topline in the present year by only 10 per cent compared to last year's 49 per cent.

It is setting up a plant at Singur, which will play host to the Tata Motor plant to manufacture the Rs 1-lakh car. The plant will see an investment of Rs 15 crore.

The Tatas' initial order is worth Rs 40 crore. The plant will manufacture a range of components like parking brakes, clutches, boot release cables and choke cables for the Tata's Rs 1-lakh car, which is expected to hit the market late next year.

Rai said the company was also diversifying into manufacture of cables for non-automotive applications like washing machines, marine applications, textiles and dental equipment. The company has bagged orders from Whirlpool, Godrej and IFB for washing machines, JCB and Escorts for excavators, and Eicher and TAFE for their tractors.

In a parallel move, Suprajit Engineering, which recently signed a joint venture for a presence in China, has said this will go on-stream in the next nine months. The 70:30 JV in favour of Suprajit with Yenfon Machine Company will set up a new assembly plant at Gyangin, about 200 km from Shanghai.

The company will invest $1 million in this JV to begin with. Suprajit will manufacture a wide range of automotive cables in China like door cables, seat cables, brake cables among others for passenger cars. It will service its existing clients in North America including General Motors, Ford and Jaguar.

"This plant will be a base for our exports to Europe and North America. Initially, we will import parts made in China to India and re-export them to our existing clients in North America and Europe. Later, we will directly export from China to these countries," Rai said.