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Chennai-based Sundram Fasteners Ltd (SFL), a TVS group company, which opened its offshore facility in Haiyan county of China over a decade ago, is doing well, expanding and has won the confidence of the Chinese OEMs. “I believe China is a big and attractive market for any manufacturing company, but it is a challenging market. To be successful in the market, companies need to keep a longer-term plan and should not expect immediate results. After being there for more than a decade, the Chinese domestic OEMs has finally partnered with us. This shows our quality and commitment,” Suresh Krishna, Chairman, SFL, said.
When SFL entered China in 2003, it was the first Indian engineering industry there. Its Chinese subsidiary, Sundram Fasteners (Zhejiang) Ltd, has recorded a turnover of Rs 250 crore. Last month, the company opened its second 10,000-tonne foundry set up at a cost of Rs100 crore. The new foundry is a backward integration unit to cater to the rising demand for machine castings in China. “We are now recognised as a credible supplier of auto components especially among MNCs. The time has come for the Chinese companies to join them as they are also upgrading themselves and coming out with new products. This is one of the main reason to set up a foundry unit at the world’s largest automobile market,” Krishna said.
In China the company manufactures products like high-tensile fasteners, powder metal components, cold extruded parts, hot forged components, radiators caps, automotive pumps, gear shifters, gear and coupling, hub and shafts, tappets and iron power. Over the years, SFL has gained technological competence in forging, metal forming, close-tolerance machining, heat treatment and surface finishing.
Arathi Krishna, Managing Director, SFL said, “After gaining expertise over the years, we hope to grow in double digits in the next 2-3 years. We have been investing Rs 200-300 crore over the past few years and plan to invest Rs 350 crore in FY 2019. We are keeping pace with the customer requirements and moving geographically closer to them. We could potentially look for 1 or 2 more plants, depending on the expansion of OEMs, whether in Gujarat or Andhra Pradesh.” The company has 27 facilities across the world, including the one in China.
Exports contribute 30%, of which 80% is to the US, to SFL turnover. It is looking at new markets and customers to raise the share of exports to 50% in the next 5-6 years.
Plans on EVs
About electric vehicles (EVs), Arathi said, “If EV is happening tomorrow, around 30% of our portfolio can cater to it. Besides, we have formed a taskforce internally to adopt and strengthen our capabilities. We are looking at the design houses which can help us crash the product to the market when EVs come into play. We need to enhance our capabilities in this area to bring in outside capabilities or buy into some design house.”
In FY2018, SFL recorded a total turnover of Rs 3,425 crore, growing by over 15% YoY. While domestic sales stood at Rs 2,146 crore (+16.9%), because of strong demand from manufacturers of passenger cars, UVs, light commercial vehicles and twowheelers, the company’s exports accounted for Rs 1,144 crore (+9.6%).