Chakan to get bulk of Advik Hi-tech’s plants

Pune-based Advik Hi-Tech earmarks Rs 100 crore for capex over three years even as its HMSI-specific Bangalore plant is up and running. Amit Panday reports.

Treading the expansion path, Advik Hi-Tech has many areas to focus upon. The company, which has been the Tier 1 supplier of crucial products such as chain tensioners, oil pumps, drum gear shifters, decompression units and combi-brake systems to two-wheeler OEMs, is in capacity expansion mode. Having recently opened a production facility near Honda Motorcycle & Scooter India’s (HMSI) plant at Narsapura in Karnataka, the company is now planning to drive capacity expansion operations at Chakan. While the mother facility at Chakan is currently running at its full capacity, the company plans to raise another production facility (Chakan area), which will be the largest of all plants that Advik Hi-Tech currently has. The upcoming facility is planned to be operational by 2014-15 when mass production of components is expected to begin. The Pune-based firm has earmarked roughly Rs 100 crore to further its production capacities over a period of three years, of which Rs 40 crore is routed to the Bangalore facility.

AdityaBhartia, managing director, Advik Hi-Tech, says, “We will be investing close to Rs 40 crore in due course of time at our production unit near Bangalore. The plant has just started the commercial operations and all our energies are focused on a smooth start up and stabilising quality production from there first. Fulfilling HMSI’s requirements is our first priority.” Adding one million units to its annual capacity of making oil pump assemblies (earlier 12 million units per annum), the company can now make up to 13 million units per annum. The firm currently is making nearly 12 million units of the same per year. Also, it now makes two million combi-brake units per annum as against 1.5 million units last year.

Maharashtra power

Bhartia feels that factors like good infrastructure and proximity to sea with ports contribute substantially in making Maharashta state an attractive investment destination for automotive and auto ancillary units. However, he believes that though the state’s fiscal policies offer investment- linked incentives, the authorities should step up the offerings to promote businesses with time. “If I look at it from the last 10 years point of view, Maharashtra’s basic infrastructure – power supply and roads – has substantially improved. JNPT port needs improvement on an urgent basis. However, the flip side is the availability of skilled manpower. Finding skilled manpower at all levels is a challenge and this pattern exists throughout the country,” highlights Bhartia.

Order from ZF AG in the pipeline

Late last year, the company had bagged an order to design, develop and manufacture oil pumps for nine-speed transmission systems from ZF Friedrichshafen AG, global supplier of driveline technology. “We have submitted the samples already and they are under various testing processes in Germany at present,” says Bhartia. As soon as the company receives the go-ahead signal from ZF, it plans to begin mass production by the last quarter of 2013, marking its foray into the heavy commercial vehicle space. Valued at a million euros (Rs 7.8 crore), the order included the incorporation of a new design of GE rotors which was developed by Advik’s German technology partner, FMO Technologies. Meanwhile, to ensure that its two-wheeler business grows over time, Bhatia is also busy evaluating and exploring new sustainable business verticals to fuel the company’s organic growth. HMSI, Bajaj Auto, Suzuki Motorcycle India, Yamaha Motor India, Ducati Motor Holding SpAare some of the two-wheeler companies to which Advik Hi-Tech is a direct supplier. Without disclosing the details, Bhartia reveals that “we have got some orders for parts that we don’t currently supply to HMSI. So from a product technology point of view, we are investing time and resources in developing new products and technologies. On the other hand, from a process technology point of view, we always target a 20 percent improvement in the output per man, for any new plant in relative comparison with the existing plant. This helps us push the manufacturing technology bar higher for ourselves.”

Foray into parts for passenger cars likely

Also, in a bid to gear up to develop its strategic capabilities to foray into the passenger car segment as well, Advik Hi-Tech plans to venture into the technologies falling within the gamut of emission norms in the long run. Advik Hi-Tech posted a turnover of nearly Rs 200 crore in 2012-13, marking a growth of close to 15 percent in the slow-moving market. However, Bhartia says that “the overall market is going to be flat during the ongoing fiscal. Hopefully, with a good monsoon, we can expect the market to pick up gradually. We have budgeted for 20 percent growth during 2013-14.”