Super Auto Forge Pvt. Ltd., (SAF), among the largest manufacturers of cold and warm forged steel and aluminum parts in India, plans to re-enter the defence sector soon, said top officials.
“The opening up of the sector provides a huge opportunity and we are planning to make a re-entry into it,” Chairman S. Seetharaman said in an interaction.
“We were supplying shells to ordnance factories till the Kargil war,” noted MD S. Muralishankar. “Later, we discontinued. We are making a re-entry bid as there is transparency in bidding and procurement process,” he said.
SAF is setting up a ₹500-crore greenfield unit at Oragadam to cater to the needs of auto component and electrical transmission makers, besides the defence sector.
Opportunity to invest
“Every slowdown is a good opportunity to invest. Like we used the 2008 global recession to restructure our business model, this time, we are setting up a greenfield project and have started the civil works.
“It would become operational by end of FY21 or first quarter of FY22,” said Mr. Muralishankar.
SAF has units in five locations in Chennai and an assembly unit inAndhra Pradesh. The new plant is being built with a view to bring all its assembly lines under one roof and make products for the defence sector, according to Mr. Muralishankar.
Currently, 95% of the output is for auto component makers and 5% for power transmission. Over 70% of products are exported to the U.S. and the Europe.
“Currently, we make products and supply to OEMs. They again do some fine tuning at their end. Instead, we have decided to do some value addition so that the product becomes ready to assemble,” he said.
Stating that SAF had returned to about 80% of last year’s production in August, Mr. Muralishankar said the firm ended FY20 with sales of ₹700 crore and plans to take it to ₹1,200 crore in the next couple of years.
Overall, SAF employs about 1,500 people and the new unit will provide direct employment to 500 people.
