New Delhi: CK Birla group firm National Engineering Industries Ltd is scaling up investments to Rs 700 crore for the next four years to expand production capacity, a top company official said on Wednesday.
The company, which sells its bearings under the NBC brand, said it is setting up a new plant in Gujarat to partially meet export demand after getting good response from markets like US, Germany, Brazil and South Africa.
"The kind of response that we are getting in international market is very encouraging and that's why we are increasing our investments in the next four years," National Engineering Industries President and CEO Rohit Saboo said here.
He was speaking to reporters on the sidelines of annual convention of Automotive Component Manufacturers Association of India (ACMA).
Earlier, the company had announced an investment of Rs 500 crore till 2016.
"Now we are planning to spend Rs 700 crore in the next four years. This would go into product development and new manufacturing facilities," Saboo said.
Of the total investments planned, Rs 500 crore will be for the Gujarat plant and the rest Rs 200 crore would be spent on Jaipur plant and R&D activities, he added.
Construction of the Gujarat plant will start from the coming Diwali and production is expected to start by July next year.
The new plant in Gujarat, which will be the company's fourth facility, will mainly supply to Hero MotoCorp and Maruti Suzuki and 25 percent of the production would go for exports, he said.
The company's three plants are located at Jaipur, Newai and Manesar.
Last year only 5 percent of the company's production was exported and this year it has already increased to 11 percent, Saboo said.
At present the company is supplying parts to Daimler trucks in Germany and it is in advanced stages of talks with BMW for supplying parts to the latter's electric vehicle programme.
Asked if the company was looking to set up plants in overseas locations, he replied in the negative but said the firm was looking at acquiring companies, mainly in Eastern Europe, Germany and Spain.
"We are looking at four to five companies which are worth around USD 50 million," he added.
On R&D expenditure, Saboo said in 2010 the company had spent 0.4 percent of turnover on the same, which increased to one percent last year and plans to take it to 2.5 percent by 2016.
The company had a revenue of Rs 1,200 crore in FY12.
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