Global acquisition is the logical route to make its entry into exports market
On an expansion mode, the CK Birla Group firm, National Engineering Industries (NEI), on Tuesday, said it would set up a new plant in Gujarat and acquire firms abroad to make its entry in the global market. India's largest bearing-maker is also focussing on the export market.
Rs.1,100 cr investment
“We have decided to invest up to Rs.1,100 crore in the next five years to double our production capacity. We are setting up a new plant in Gujarat…we are also looking at companies in Europe and the U.S. for acquisition on which we will spend Rs.500 crore this year,” NEI President and CEO Rohit Saboo told The Hindu.
Stating that global acquisition was the logical route to make the NEI's entry into exports market, Mr. Saboo said once the company acquire a firm abroad, it would then go in for its capacity expansion to strengthen its international presence.
“We are looking at companies in the U.S. and Europe with an annual turnover of Rs.100-500 crore as we have many clients in these two territories,” he said.
“Today, exports comprise about 7 per cent of our total turnover…we expect this to double in the next three years,” Mr Saboo said.
NEI crossed the Rs.1,000 crore turnover mark last fiscal and in 2011-12 it was likely to clock Rs.1,200 crore.
“In the next three to four years, we hope to cross Rs.2,000 crore turnover as we consolidate our leadership position in the Indian market and explore international markets,” he added.
To double capacity
NEI, which today enjoys 25 per cent market share and has clients such as Maruti Suzuki, Tata Motors, Daimler (Germany), Hero MotoCorp and Bajaj Auto, will double its capacity in the next five years to 160 million bearings from 80 million bearings annually.