Jamna Auto Industries (JAI), which is already among the leading names globally in the manufacture of leaf and parabolic springs, is striving for growth and thinking big, according to chief executive officer Randeep Jauhar. Keen to take the company to greater heights, Jauhar has ambitious plans towards that end.
JAI manufactures multi-leaf and parabolic leaf springs for automobiles, which it supplies to leading customers including Tata Motors, Ashok Leyland and Eicher. Around 42 percent of its output goes to Tata, 38 percent to Ashok Leyland while nearly 20 percent is for Eicher. It also has the ability to design and manufacture customised leaf and parabolic springs for its OE customers. The company has five manufacturing plants around India and ranks as the fourth largest manufacturer of leaf and parabolic springs in the world.
However, with the advent of new-generation vehicles, there is greater scope for companies like Jamna. “In the commercial vehicle market, several new-generation vehicles have been launched. We are fortunate to be part of several of these projects from design to implementation,” says Jauhar.
Its leaf springs are beams having a cantilever design that help to absorb deflection under load. Mostly used in passenger and commercial vehicles as part of the suspension that connects the vehicle’s wheelbase and chassis, it is critical to the safety of the vehicle. Parabolic springs are a modified version of leaf springs which have better load-carrying capacity with reduced weight.
The company’s main plant is at Gwalior while it has a newer facility at Chennai. There is another one in Haryana at Yamuna Nagar and the company is setting up a greenfield unit in Pant Nagar. It has also recently acquired the Tata Motors spring plant at Jamshedpur. The Chennai plant, constructed in 1999, is very modern technically and is one of the leading plants in the world, with most of its products going to Ashok Leyland.
Talking about the company’s expansion plans, Jauhar says that “today our capacity is 120,000 tonnes annually. There are plans to double this in the next 18 months. So, we are expanding in Chennai and there are efforts to put up a new plant in Jamshedpur. The capacity of the Gwalior plant is also set to be increased.” He adds that the expansion projects should be completed in about two years at a cost of Rs 120-150 crore and the aim is to reach a capacity of 200,000 tonnes.
At present, the company does not export its products, says Jauhar but adds that JAI is keen to do so very soon. “Ideally, I would be happy if 20 percent of our products were exported. If one exports, it also helps upgrade technology as the customers abroad are particular about quality.”
Regarding the increase in steel prices, he says, “It is too early to say what the impact is going to be, but it is not going to be good for the auto component industry,”
Jauhar sounds an optimistic note when he says, “the commercial vehicles industry is directly co-related with GDP growth and I think it will keep growing in the future.”
Jamna Auto supplies around 94 percent of Ashok Leyland’s requirements presently and is also working with Nissan in its foray into the Indian commercial vehicle market. In this regard, Jamna had bought a stake in a Japanese company NHK, one of the largest spring companies globally and a supplier to Nissan worldwide. With regard to Ashok Leyland’s new plant in Uttaranchal, Jauhar remarks, “We are sure we will do something with them.”
From the Chennai plant, 85 percent of Jamna Auto’s production goes to Ashok Leyland, while 10 percent is supplied to Tata Motors and the rest to Volvo and others. Jamna had also received approval from the some of the biggest names in the business. The company has been approved by General Motors as single source supplier for the Hummer model and had also supplied to Ford, Navistar and Daimler Chrysler.
On the issue of attrition at a time when several companies are struggling to tackle the issue and retain talent, the Jamna Auto CEO says some steps have been initiated in that direction. “We have given the employee stock option and also appointed a retired Army major-general in the human resources department in a bid to motivate our workforce and help stop people from leaving.”
In Chennai, there is a workforce of around 500 presently, says Jauhar and the only issue there is that with so many industries flourishing it is difficult to find people.
On the supply of products to Volvo, he says as of now it is not a huge volume because the company is not clocking big numbers at present.
Jamna Auto recorded sales of Rs 550 crore last year and is looking to touch Rs 900 crore in the next fiscal. Although the company is not exporting as of now it plans to do so in the future. However the year 2008-09 is one for consolidation.
Jauhar reveals plans by saying that, “We want go to Europe and there are some plans on that score. It will be an acquisition and not a joint venture operation. We want to be an Indian multinational and do not prefer tie-ups.”
Clearly, this company is targeting market leadership by a big margin and these expansion plans will help in a big way.