Auto component maker Sundram Fasteners plans to invest Rs 100 crore in its defence business vertical in the next two years, company’s chairman Suresh Krishna said on Wednesday. Addressing the shareholders at the company’s 59th Annual General Meeting in Chennai, Krishna stated that he expects the domestic automobile sector to grow in double digits across segments this fiscal after two years of sluggishness, according to a company statement.
The company has been devising plans and broad-basing the product segments to increase its revenues, exports and profits considering the need for faster growth and to ensure consistent performance under economic cycles, he said. “The company is working with the defence establishments to be part of the Atmanirbhar initiatives of the Indian government. It is looking to invest over Rs 100 crore in the next two years to grow this vertical significantly,” he said.
He said Sundram Fasteners is in the process of getting customer validation for various parts and proposes to manufacture and supply value added sub-assemblies. The Chennai-based entity commands a 35-40 per cent market share in fasteners manufacturing in the country, according to Krishna. After two years of sluggishness, India’s automobile sector posted double-digit growth, supported by improving economic growth and personal incomes, Krishna said in his speech, adding, “during FY 2022-23, all segments in the automotive sector are expected to post a double-digit growth.”
“Rupee depreciation is expected to provide further impetus to the growth in exports of the company. The roll-out of financial subsidies under the PLI Scheme augurs well for the automotive sector,” he said. The scheme proposes incentives to attract investments towards creation of large manufacturing capacities in the automotive manufacturing value chain.
The company has planned an investment of Rs 350 crore over a period of five years for manufacturing Advanced Automotive Technology (AAT) Components such as powertrain sub-assemblies for electric vehicles and select IC engine-powered vehicles under the PLI scheme.
“The company has secured firm orders from global OEMs for supply of these components under their EV programmes. The investments proposed to be made in this direction are expected to provide a major thrust to the company’s exports in the years to come,” Krishna said.
There is a significant potential for growth in the wind energy business. To meet the surge in demand, the company plans to make additional investments of Rs 300 crores over the next two years. The company has been awarded contracts worth Rs 150 crore for EV products while its Sricity unit has commenced the supply of products for hybrid / EV applications.
Further, the company also expects to sign contracts worth over Rs 200 crores for new EV product, he stated. The company has expanded its range in the wind segment fasteners and has also started exporting fasteners for the wind segment, he stated.