Sona BLW Precision Forgings Ltd to invest 400 crore INR to develop new products

Auto component manufacturer Sona BLW Precision Forgings Ltd has said it would invest Rs. 300-400 crore in the next three to five years on capacity expansion and to develop new products for the global market.

It aims to achieve revenue of Rs. 2,000 crore by then. The company will also hire around 200 people for its Indian operations, which has around 990 people at present, Sunjay Kapur, Managing Director, Sona BLW Precision Forgings, told reporters.

The company manufactures precision forged bevel gears, differential case assemblies and synchroniser rings for automotive and other applications.

Kapur said, "To achieve a revenue of Rs. 2,000 crore in the next three-five years in India, we need to invest close to Rs. 300-400 crore. We felt that we need to invest more in the business that we have in a global scale."

He said the Group's forging business was around 20 per cent of the global market. For forged gears, we are investing heavily in terms of new products in the value chain.

Kapur said the automobile industry was getting disruptive and a lot of new things were emerging, comparable to the IT industry in terms of the rate of change.

Kapur further added, "The steering business was limited to India. We had set up that business in the early 1980s for Maruti, and JTEKT increased their stake in early 2000. Again, in 2007, JTEKT set up JTEKT Sona Automotive, a subsidiary of Sona Koyo. That business was into electronic power steering and JTEKT owned majority stake of 51 per cent."

Kapur said as per the Sona Group, the best way to consolidate business was to let it become one large company, in terms of speed to market, R&D and supply chain.

It would make more sense and an option came about where JTEKT wanted to increase its stake again. They also have product design technology that we don't have, so we felt it would make best business sense to exit that business and instead invest in our other automotive businesses, Kapur added. Therefore, Sona Autocomp Holding Ltd entered into an agreement to sell its entire stake in Sona Koyo Steering Systems at Rs. 419 crore.