Bharat Forge on consolidation drive

Bharat Forge, the flagship company of the US$1.5 billion Kalyani Group, is expected to take a breather from its global acquisitions and concentrate on setting up development centres in Germany, Sweden, North America and China. The company is, however, planning a green-field facility in India as its Pune plant is operating at maximum capacity.

“We already have a development centre in India which we are expanding. In Germany we will have around eight engineers. China will be similar to India with around 50 engineers,” said Baba Kalyani, chairman, Kalyani Group and Bharat Forge. Kalyani is also betting big on his company’s dual-shore manufacturing capability. This refers to its ability to manufacture the same component at two different locations; one at a low-cost location like India or China and one close to the customer wherever he may be.

After acquisitions Bharat Forge now has 37 customers, and includes all the OEMs in the world. There are five main commercial vehicle groups in Europe — DaimlerChrysler, Volvo-Renault, Iveco, Scania and MAN, and Bharat Forge supplies to all of them.

“Dual shoring minimises the risk of doing business and it is very important as a strategy. We leave it to the customers to decide what they want to do. My gut feeling is that they will not disturb the process today but as we move into the future and as our business grows, we will see more and more products coming into India and China,” said Baba Kalyani. He said that worldwide acquisitions are part of Bharat Forge's strategy to become the biggest forging company in the world by 2008.