Perfect Alloy gets big global break

Perfect Alloy Components of Shimoga, which makes valve seat inserts, has bagged an order from BorgWarner Germany for supply of turbocharger bushes and supporting rings in different sizes. The initial volumes are around three million pieces annually and deliveries will begin by end-2006, said director VK Divekar. Perfect Alloy has already been supplying these components to BorgWarner’s joint venture company in India with the TVS Group, Turbo Energy, for the past few years.

The new order will mark its entry into the global market for these components and could pave the way for a larger footprint since BorgWarner has several facilities worldwide. Back home, Perfect Alloy has received orders from Bharat Earthmovers (BEML) to supply 3,000 ‘crawler roller seal rings’ made of high carbon alloyed castings. The product is being developed and samples will be delivered within six months. It is in great demand both here and abroad largely due to the technology involved in manufacturing as well as its metallurgical properties. Most off-road vehicle makers import nearly one lakh units every year.

Winsert of the US is also keen on sourcing valve seat inserts from Perfect Alloy. A team is slated to visit the plant later this month to discuss this possibility and also audit the manufacturing facility. The Shimoga-based company has also begun supplies of valve seat inserts to Greaves Cotton (light engine unit) and Kirloskar Oil Engines (small engine division). These are made through the casting route and meet the needs of Ashok Leyland, Hero Honda, Kirloskar Oil Engines, Mahindra & Mahindra and Tata Motors.

In the overseas market, it supplies valve seat inserts to engine-makers like Deutz of Germany and Wartsila of Finland. The company is also diversifying into high-alloy machined castings and turbo parts for which it has earmarked a Rs 10 crore greenfield facility on a five-acre plot, a kilometre from the existing facility. Divekar said that a 7,000 square-foot factory will be built here in 2007 and production will begin soon thereafter. Thus far, Perfect Alloy has been manufacturing castings (for valve seat inserts) using only low and medium carbon steel. However, in the new plant, components will be made with cast iron as the base metal alloyed with cobalt, molybdenum, tungsten and vanadium which can withstand high temperature as well as greater wear and tear.

The company bagged the Best Supplier Award 2005 from Deutz in the low-cost country category. It has been supplying valve seat inserts to the engine- maker for the past three years at zero ppm. According to Divekar, though Deutz has given the option to supply valve seat inserts both through castings and sintered material, Perfect Alloy has stuck to the casting route since sintered technology is becoming obsolete. It is a single-source supplier for 18 part numbers that meet the needs of 26 engine models of Deutz.

Every month, it ships around 2.5 lakh units to the German company and this will increase to three lakh units by the end of 2006. It decided to expand capacity for valve seat inserts from 8.4 million to 14 million units at a cost of Rs 7.5 crore. At one go, the company also increased the number of CNC machines from 27 to 57 to cater to overseas customers. The project has just been completed but clearly demand is still growing which has prompted the need for a greenfield facility. Perfect Alloy reported sales of Rs 27 crore in 2005-06 and has targeted Rs 38 crore this fiscal.