A little over two years after it first announced an investment plan for its first overseas plant, TVS Group company Sundaram-Clayton Ltd (SCL) has inaugurated its first overseas facility in South Carolina, USA, through its subsidiaries, to significantly enhance its ability to serve its customers in North America, its biggest export market. This expansion will establish SCL as a global player from India. The operations will commence by September 2019.
The US market currently represents about 60 percent of the company’s exports and 40 percent of its revenues. An onshore presence will enable SCL to sharply reduce delivery lead times, giving it a competitive advantage in an increasingly demanding market for automotive components.
The US facility has been built with a project investment of $90 million (Rs 630 crore). It will produce 1,000 tonnes of castings in the first year of production and in five years, will scale output to 10,000 tonnes. SCL will manufacture a range of high-pressure die-cast and gravity die-cast parts in this facility. The US Department of Commerce and its trade promotion arm, the US Commercial Services in Chennai, played a key role in facilitating this project.
L-R: Ms Mallika Srinivasan, chairman & CEO, TAFE; Srikanth Padmanabhan, president - Engine Business, Cummins; Venu Srinivasan, CMD, Sundaram-Clayton; Henry McMaster, governor of South Carolina; Dr Lakshmi Venu, joint MD, Sundaram-Clayton; Asim Kumar, Acting Consul General, Indian Embassy at US (Atlanta); and Brian Walter, COO, Sundaram Clayton USA.
Detailing the company strategy for setting up the new plant, Dr Lakshmi Venu, joint managing director, SCL, said, “The long-term outlook for both the American and the Indian automotive industries is strong. In both markets, OEM vehicle makers are focussed on lightweighting and better fuel economy. Our technologies are aimed at supporting this industry trend. Our strategy of expanding in both these markets enables us to support our customers with a more responsive supply chain in an increasingly dynamic world.”
South Carolina is among the fastest growing automotive and manufacturing hubs in the United States. SCL’s overseas facility is built on 50 acres of land in Dorchester County in the Ridgeville Industrial Park, South Carolina.
The governor of South Carolina Henry McMaster, who inaugurated the SCL plant, said, “Our state is leading the way in economic development, and the fact that Sundaram-Clayton is already announcing additional jobs is another testament to that. This is a big win for Dorchester County and the entire state, and we’re excited to see what the future has in store for this great company, and we wish them years of continued success.”
Apart from its US facility, SCL has also invested recently in a new plant in Tamil Nadu, India. The company is positive on the long-term strength of its core Indian market as well, and recently opened an additional plant in Oragadam, near Chennai, to service its Indian automotive customers.
Well poised for global growth
In FY2019, SCL's and its subsidiaries’ revenue stood at Rs 21,575.64 crore in fiscal 2019. This includes India’s third-largest two-wheeler maker TVS Motor Company, its die-casting and plastics divisions. SCL supplies auto-components for vehicles ranging from two-wheelers to large heavy trucks to major global players in the auto industry.
Sundaram-Clayton has five manufacturing facilities, with four in India and one plant in South Carolina, USA. The company has a capacity to produce 74,000 MT/ annum. Its die-casting processes include high pressure die-casting, gravity die-casting, low pressure die-casting, post casting (shot-blasting, heat treatment) machining and sub-assembly.
SCL manufactures aluminium pressure die castings for heavy commercial vehicles, passenger cars and two-wheelers. The product range includes flywheel housing, gear housing, clutch housing, filter heads, air connectors, lube oil cooler cover assembly, filtration module casting, turbo charger, compressor cover assembly, charge air pipe, intake manifold, cover coolant duct for the truck segment.
For passenger cars, it makes cylinder head, case transaxle assembly, oil pan, chain case, cylinder head cover, adaptor oil filter, fuel pump housing, fork gear shift, starter housing, and AC compressor housing. Also, crankcase, cylinder head, cylinder barrel, wheel hub for powered two-wheelers and brake equipment valve bodies.