SKF India jacks up capex to 160 crore

SKF India jacks up capex to 160 crore

Mumbai: Bearings maker SKF India plans to boost its capex for the year to 160 crore from 100 crore the year ago and ramp up operations at its three units, its chief said on Wednesday in an interview.

The firm, an unit of Sweden’s SKF, supplies bearings to the auto and industrial sectors from its plants in Pune, Bangalore and Haridwar.

The Haridwar plant supplies bearings to major auto makers in India including Tata Motors and Hero Honda.

Managing director Shishir Joshipura said the firm plans to jack up capacity by 25-30% in 2011 across its units.

SKF follows the calendar year as the fiscal.

“Right now we are in an envious position where we cannot produce enough. But we are doing everything we can to produce more and ramp up capacity," Joshipura told Reuters.

Auto sales in India hit a record high in January, defying expectations of a slowdown, powered by a growing middle class, easier access to loans and a wider choice of models.

In 2010, vehicle sales in India, one of the fastest growing auto markets in the world, grew 31 percent and auto parts makers have ambitious plans escalate production to keep up.

Delhi-based Motherson Sumi, for instance, has set a capex of 500 crore in 2011-12 for expansion.

However, rising costs of steel and aluminium have forced parts makers, including SKF, to pass on part of the cost push to customers to protect margins.

“Our customers have supported us. They have agreed to some price increases though not as much as we would have wanted," Joshipura said.

SKF also supplies bearings to several non-automotive clients in wind turbine, railways and mining sectors. Revenue is equally split between automotive and non-automotive segments, he said.

Earlier on Wednesday SKF reported a 41% jump in fourth quarter net profit as sales rose to 536 from 464 crore.

Full year profits jumped to 177 crore from 94.25 crore, while sales rose 32% to 207 crore on a low base.

“The first two quarters of 2009 were affected by the economic percentage changes looks a bit disproportionate in that sense," Joshipura said.

“But the economy is growing, people are buying more cars and motorbikes. And there are roads being built and more power plants being put up, so that will continue to help us."

SKF India shares ended up 0.13% at 533.95 in a weak Mumbai market.