Chennai, Sep 29 (IANS) Brakes India Ltd, a leading manufacturer of braking systems and ductile castings, will invest $16 million to expand the production capacity of its foundry facility in Oman, a top official said.
'We intend to double the capacity to 36,000 tonnes per annum (tpa) at an outlay of $16 million to be funded with a mix of debt and internal accruals,' Brakes India executive director V. Narasimhan told IANS.
According to him, the expansion is warranted as the plant that started commercial production this April is already working at 70 percent capacity.
'We have to expand capacity if we have to stay at the same place given the high input prices. The first phase will break even in 2009 and the second phase the next year,' Narasimhan said.
The Rs.6 billion foundry division, which has an 80,000-tonne-per-annum facility at Sholinghur near Chennai, has ventured to Oman to reach its high value products - common rail direct injection pumps and turbo charger castings - faster and cheaper to customers like TRW, Volvo, Akebono, Robert Bosch and others.
Apart from normal castings, the Oman plant also makes high heat resistant vermicular high silicon molybdenum castings.
'Nowadays the size of automobile engine is coming down. As a result, the casting weight has to come down while the heat resistance has to go up,' Narasimhan said.
The entry into high-value or breakthrough technology products is a logical step for the division, which won the Deming medal in 2003 for diversifying its client and sector concentration risk.
'At present 87 percent of the production goes to the automobile sector and the balance to the refrigeration sector. Now we are looking at adding valve and earthmoving equipment industries,' Narasimhan said.
The division is hoping to start supplies of turbo chargers to industrial conglomerate Honeywell.
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