Caparo to set up Rs300-crore vehicle parts facility in TN

Mumbai: UK-based Caparo group subsidiary, Caparo Vehicle Products India Private Limited, has signed a memorandum of understanding with the Tamil Nadu government for setting up new Rs300-crore manufacturing facility at Oragadam.

The state-of-the-art facility will manufacture composite materials and testing, fasteners, tubular products for automotive and aerospace and automotive braking systems.

Caparo group chief executive Angad Paul and Tamil Nadu industries secretary Shaktikanta Das signed the MoU at the state secretariat in the presence of chief minister M Karunanidhi.

This is Caparo''s second project in Tamil Nadu, the first being a Rs400 crore auto components plant at Sriperumbudur, which will commence production next month.

The company turnover is 50:50 on both sectors, he said. Though the aerospace segment contributed small numbers in production, its high value contributed towards the turnover to the extent of 50 per cent.

Caparo has invested Rs700 crore in the state so far and plans to invest further, Angad said.

Caparo is expanding its two-wheeler component segment and is further using its facilities at the automobile plant base to cater to the aeropace sector, Paul said.

"The same facility should be able to cater to various needs," he said.

Paul said India would become a hub for automobile and aerospace manufacturing in 10-15 years and would overtake Japan. The group, Angad said, wants to concentrate more on aerospace.

"We are here to serve the OEM''s coming here. The minimum base of full capacity of the plants will be about Rs1,000 crore worth of sales. The Sriperumbudur plant would reach that capacity by 2009," Paul said.

While the forgings plant at the Sriperumbudur facility would be used for serving the aerospace sector as well, Angad said, "At Oragadam, we will focus mainly on systems engineering and developmental engineering."

The Sriperumbudur facility, set up on 120 acres, has four projects- stamping, world-class R&D centre and tool room, aluminium foundry and forging.

"We are guided by our customer base. The process of increasing our capacities will be on the basis of our customers," he said.

The facility at Oragadam is the first vehicle product site for Caparo in India. The Oragadam plant would come up on 100 acre and the state has already allotted the land to the company, Paul said.

The project, coming up at the industrial estate in suburban Oragadam, will provide direct employment to 850 people and indirect employment to 1,150 people.