Pune: Engine and component maker Cummins India Ltd plans to set up an India Office Campus (IOC) at an investment of Rs 730 crore as part of its growth plans, which also involves setting up a 300-acre greenfield plant at Phaltan and upgrading its technology centre in Pune.
The 10-acre IOC will be ready in phases, starting mid-2014 to 2016 to accommodate an increase in headcount planned from 2015, said Anant Talaulicar, chairman and managing director, Cummins India. Talaulicar also heads the Cummins Area Business Office, which covers all Cummins group companies in India.
The Phaltan site, about 150 km from Pune, which comprises a domestic tariff area (DTA) and a separate special economic zone (SEZ), is estimated to require an investment of $500 million (around Rs 2,750 crore) over the next few years.
“This factory will begin production from mid-2013 and make high horsepower engines that we do not currently make in Cummins India Ltd,” Talaulicar said. “These engines, from the power generation business unit, will be made by Cummins Technologies India Ltd (CTIL). For the future, CTIL will bring new technologies to India, for instance, the after treatment of particulate filters, etc.”
The site will eventually have around 13 factories, of which three are already operational, thus bringing all Cummins group companies to one location.
Since Cummins is “paying lease charges on companies that are scattered across India and even in Pune”, the IOC is expected to help the company introduce operational efficiencies through co-location. “It will also help cooperation, collaboration and communication,” said Talaulicar.
Other expansion plans include investing around $150 million to upgrade the Cummins technology centre in Pune and merging it with the existing Cummins Research and Technology India Ltd (CRTI) to form the India Tech Centre, envisaged as being on par with the parent tech centre in the US.
“The new tech centre will provide end-to-end engineering, from the initial research to developing technology, product development cycle to supporting existing products across all business units,” Talaulicar said.
Commenting on growth prospects for power sector companies, Kalpana Jain, senior director, energy and resources, at consultant firm Deloitte Touche Tohmatsu India Pvt. Ltd said, “To achieve a GDP growth of 6%, we require a 4.8% increase in power supply. So, unless we have a near 5% growth in the entire power value chain, from generation, transmission and distribution, we won’t get a 6% growth in GDP.”
Meanwhile, Cummins has also formed a joint venture with Delhi-based dealer, SVAM Power Plants Pvt. Ltd, in an effort to get closer to end customers.
Cummins India rose 2.53% to close at Rs 437.65 on Wednesday on BSE.
The benchmark Sensex gained 0.12% to end at 17,257.38 points.
Cummins Technologies India was earlier Tata Holset, an equal joint venture between the Tata group and Cummins group company Holset. In 2007, Cummins bought out the Tata group, renaming the company CTIL and making it a 100% Cummins entity.