Premier Sealing to set up new facility

Premier Sealing, which makes rubber parts, is scouting for an equity partner to set up a facility that will help out with its soaring export business. The Hosur-based company has received orders from a large Tier-1 supplier in the US for seven different oil seals to be used in heavy duty commercial vehicle applications. It is developing samples and regular supplies will begin next fiscal.

The Rs 3.5 crore Premier has also received an order from one of the largest suspension systems makers in the world (present in India) by whom it has been qualified as a global supplier. It has now been given the mandate to develop 48 different rubber and rubber-metal bonded products like O-rings and oil seals. Supply of initial batches for 14 parts has kicked off and 34 more are being developed which will be sent in stages. All this will involve more capacity and Premier is, therefore, setting up its third facility in Hosur.

The mother plant can make about three million parts annually while the second, dedicated to one of its leading customers, makes about two million. The third unit which will be operational by March 2008 can make six million units a year, said CEO of Premier, R Rajendiran. “We are in talks with a couple of companies in Japan and Singapore and a decision will be taken within three months on the the joint venture partner. Land has already been procured and the total paid up capital will be around Rs 5 crore,” he said.

The new plant will be a fully integrated unit making high-end products. Nearly half the capacity will be earmarked for the buyback requirements in the joint venture while the balance will go to the domestic markets and exports to the US. Once the plant is in place, Premier hopes to treble turnover with one-third being exports. Rajendiran said the unit would employ about 200 people. “At least one person from a house in Sanachandaram village works in our plant and over 40 percent are women, including more than 20 widows,” he said.

Premier makes 7,000 varieties of rubber and rubber/metal parts, of which a lion’s share is taken up by over 3,000 different varieties of O-rings. It meets the needs of a host of vehicle makers and Tier-1 companies besides catering to engineering, off-road vehicles and defence.

T MURRALI