Hit by the global downturn, particularly in Europe and the USA, the Rs 1,000 crore Oeitker Group of Switzerland is increasing its Asia focus. Oetiker, which manufactures a range of automotive clamps, recently inaugurated its second manufacturing facility in the region, at Patalganga in Raigad district of Maharashtra. The company's first Asian facility is in China.
Going forward, Oetiker expects China and especially India to substantially contribute to its global turnover. At present, its Asian operations contribute to 14 per cent of the total Group turnover, compared with 56 per cent from Europe and 30 per cent from the US.
According to Ulrich Meier, CEO, Oetiker Group, “A number of our global clients are already here in India. Also, the automotive market here holds a lot of promise. With this venture we will further strengthen our presence in the APAC region, as well as create long-term relations with local and global customers in the region.”
While Oetiker’s Indian facility will cater to domestic clients initially, exports will happen subsequently. It will also expand its business into other sectors including the chemical, mining and petrochemical, railways, power generation, aerospace and shipbuilding industries. The company is also looking to tap the fast-growing aftermarket industry by the end of this year.
A key advantage of the new facility is the beneficial trickle-down effect to Indian OEMs. Oetiker clients, who were earlier importing a total of 12 million clamps per annum, will now directly source them from here, thereby effecting savings of at least 15 per cent. Oetiker is also optimistic that fresh volumes will also be added.
Catering to auto hubs
The new Rs 60 crore manufacturing facility has a capacity of over 75 million units per annum and will cater to the requirements of companies which are located in and around the automotive hubs in North, West and South India. Oetiker India plans to make around three million units per month and reach full capacity by 2011. The clamp maker expects to break even in two years. The steel required for the clamps is to be sourced from Jindal Steel, which is located alongside the Oetiker plant.
According to Oetiker, an average of around 40-60 clamps go into the making of a single vehicle. With 9.65 million vehicles produced in 2008, and a projectedgrowth of at least three per cent in the current fiscal, Oetiker thinks the future is very much in India.
According to Ashwani G Keswani, country head, Oetiker India, “India is fast emerging as a global automotive manufacturing and sourcing hub. At Oetiker India, we are looking to leverage high-technology manufacturing processes to produce clamps of world-class quality and reliability at economical prices. Our state-of-the-art engineering application centre will further assist us in the endeavour to provide customers with superior technology products. Meanwhile, the centrally located facility in Patalganga will enable us to cater to the key automotive belts in India with ‘just-in-time’ delivery to customers.”
Targetting OEMs
Oetiker India will supply clamps to OEMs for a wide range of products and also to Global Tier I auto component manufacturers like GKN, Rane TRW and Delphi as well as other key Indian component suppliers.
Keswani adds, “There are close to 15 OEMs and component makers who we will supply the clamps to. By the end of the year, at least 25 million clamps will be manufactured in the Indian facility and supplied to our clients. By 2011 we expect to make and supply at least 75 million clamps.”
Oetiker India officials say that the company has already received firm orders to supply clamps which have application in the Tata Nano, Fiat Linea and the recently-launched Maruti Ritz, among others. Company officials claim that almost all Indian cars have a content of at least 15 Oetiker clamps in various applications.
The Indian market clearly holds a lot of potential for Oetiker because the new plant is also equipped to manufacture clamps and rings to fasten hoses, pipes and other parts in addition to automotive sector needs. However, the initial focus is solely automotive.
Oetiker India is also setting up an Engineering Design Centre in the Patalganga facility to assist quicker product development as per customer needs. It will be operational by the end of the year. The company also plans to develop a full fledged in-house steel processing centre in an attempt to enhance quality, ensure cost competitiveness and create superior products.
The company is also putting in place its logistics setup to ensure ‘just-in-time’ deliveries across India. It is at present in talks with a number of logistics service providers for a total solution and is expected to sign a deal soon.