Auto and industrial components maker SKF India said on Wednesday that its parent, SKF AB, will cut up to 1,600 jobs globally in 2010, even as it adds 500 new jobs at its two new Indian plants.

Due to a slowdown in the global economy – primarily the traditional European and American markets – the Sweden-based company has already cut 4,900 jobs globally in 2009. With more job cuts this year, the total number would reach 6,500.

Speaking at the inauguration of its Haridwar plant, Mr Tom Johnstone, President and CEO, SKF AB, said, “Due to the slowdown, we cut production by 30 per cent last year. We have started shorter shifts rather than slashing more jobs, as per our arrangement with the workforce. This has helped us limit job cuts.”

Globally, the company would invest $210 million in 2010, which will be split between factory upgrading and capacity expansions. Last year it had invested close to $280 million.

Mr Johnstone said that coming out of slowdown in sales last year, the traditional markets of Europe and America have been slow to pick up, as compared to India and China.

“We see more investments being made in India. Of the three new factories we're building globally, two are in India and the third is in Russia,” he said.

With an annual capacity of 4.5 crore, SKF's new Haridwar plant would initially manufacture components such as bearings for two-wheelers. It will mainly cater to Hero Honda's plant in Haridwar and the aftermarket.

“Our first priority is Hero Honda and the aftermarket, after which we will look to supply other manufacturers also. We will ramp up to full production next year,” said Mr Rakesh Makhija, President, Asia, SKF AB.

He added that the company would like to export more from India, but high local demand is preventing them from doing so. “Currently exports are 10 per cent of our total sales,” he said.

Out of the Rs 420-crore investment on capacity expansion, the company has put in about Rs 150 crore at its Haridwar plant. It started commercial production from mid-March to avail the Centre's excise tax benefit, which ended on March 31.

SKF's other plant for industrial bearings at Ahmedabad is scheduled to be inaugurated on Thursday. It also has plants in Pune and Bangalore.

Market share

SKF is targeting a 15-20 per cent sales growth in the Indian market, where it holds 30 per cent market share in the bearings business. “Between 2003 and 2008, we grew by three to four times. In 2009 we saw a bit of lull, but we expect to grow by 15-20 per cent in 2010,” he said.

SKF shares at the BSE were up 3.02 per cent at Rs 385.30 on Wednesday.

Other News:
SKF to Cut 1,600 Jobs Globally, Add 500 in India
Motion Industries Recognized by Eaton with a Premier Supplier Award
SKF Opens Two New Factories in India
Results of the Operation Monitoring of the Split Bearing PLC 512-39 in OKD, at the Darkov Mine
NTN Resumes N American Capital Spending as Bearing MRT Recovers
Tata Steel Gains on Higher Sales in FY 2010
Amsoil Synthetic Grease Designed to Extend Wear Protection
NN, Inc Reported Its Financial Results for the Fourth Quarter and Full Year Results