Bharat Forge Ltd (BFL) is planning to achieve 50 per cent
of the company''s sales from exports by 2005 and also seeks
to enter the car market through small forgings.
its mainstay is large forgings for trucks and industrial
applications. BFL aims to be among the top three companies
globally in its segments, Baba Kalyani, chairman and managing
director, BFL, said at a conference organised by ICICI
Securities in the US recently.
has until now focused on large forgings used primarily
in commercial vehicles, which accounts for 48 per cent
of its turnover. But the market for car forgings is four
times that of commercial vehicles forgings and BFL plans
to build capacities in this segment.
supplies to Toyota for the world car platform will commence
during the latter part of FY04 and this could potentially
propel rapid growth. BFL''s move into exports of car components
will help maintain this momentum.
continues to maintain its leadership position in the domestic
market with a market share of 80 per cent and is the preferred
supplier to all leading domestic companies. In order to
develop a well-balanced portfolio in exports, BFL is increasing
its exposure to the oil and gas industry by manufacturing
wellhead equipment, which accounted for 6 per cent of
by catering to the Chinese auto market, BFL has developed
a balanced export portfolio and moved away from its US-centric
tilt, Baba Kalyani said at the I-Sec conference.
is also focusing on the construction equipment market,
which requires large forgings and is an area of strength
for BFL. This diversification strategy has paid off, and
dependence on US for exports has declined from 70 per
cent in FY02 to 49 per cent in FY03, and exports to Asia
increased from 2 per cent to 25 per cent in the same period.
Exports have grown at a CAGR (compound annual growth rate)
of 38.2 per cent over the past four years.
company reiterated that China does not pose a significant
threat in product development and high-end engineering.
The ICICI Securities report said Indian companies manufacturing
forges possess better capability and quality and also
enjoy cost-advantage. BFL has invested extensively in
product development capability such as infrastructure.
BFL has also invested in extensive R&D facilities,
and has reduced the product development cycle time.
BFL has nurtured relationships with leading auto component
companies such as Dana, Cummins and Arvin Meritor. BFL
has invested in product development capabilities to enhance
speed-to-market and to improve the quality of forgings.
an employee profile comprising qualified engineers (as
opposed to unionised shop floor employees) the company
has been able to upgrade product development capability
by investing in CAD/CAM and tooling facilities, the ICICI
Securities report said. This positions BFL to move from
being an order-based supplier to a supply partner (five-fold
rise in sourcing opportunity) and further to become a
collaborative supplier (25-fold rise).