Lumax Industries mulls greenfield expansion in western India

The company has orders worth over Rs1,000 crore from both car and two-wheeler players, of which 90 percent is from new businesses.

By Shahkar Abidi calendar 02 Sep 2022 Views icon13780 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp

Lumax Industries, a key supplier of lighting products, is in the process of  evaluating its regional capabilities in line with its strong order book.

The company has orders worth over Rs1,000 crore from both car and two-wheeler players, of which 90 percent is from new businesses. Of the new business, about 30 percent is from the electric vehicle makers. The strong growth comes on the back of bumper orders from some of the leading OEMs such as Tata Motors, Mahindra & Mahindra, among others. 

Deepak Jain, Chairman & Managing Director, Lumax Industries told Autocar Professional that the company is in process of "post-capacity optimisation and shifting of idle capacities from one region to another, and we will ascertain the need for a greenfield expansion in the coming months”.

According to Jain, a significant chunk of the order book, approximately 60-70 percent is from the passenger vehicle segment, which is in line with the current portfolio of the segment-wise mix.  He added that the Rs 300 crore EV order book is across various models of both passenger cars and two-wheelers.

Jain's observations ae based on an internal assessment made by Lumax Industries on how the existing plants are being used. The company's 11 plants in India currently average close to 80 percent utilisation. However, plants in western India including those at Pune and Sanand may end up touching about 90 percent utilisation levels by the end of the current financial year as demand for products grows. The company had only recently upgraded its capacity at Sanand.

For now,  Lumax Industries has no plans to expand capacities in Northern India. Lumax says that with its existing infrastructure and manufacturing capacity, there's no immediate need for expanding as they can service the needs of Maruti Suzuki and other clients in this region, the company’s leadership said.

The company is therefore exploring the feasibility of future expansion in western India where it expects the EV market to grow significantly as several OEMs are betting on e-mobility solutions. Market watchers feel that the most likely destination for the new plant will be either Pune or Sanand or both from where it can service a variety of OEMs including EV makers. Lumax Industries' capex for the current fiscal stands at around Rs 80-90 crore which it is utilising for maintenance and small brownfield expansions amongst others.

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