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Two years after the acquisition of Coimbatore-based Shanthi Gears, the Murugappa Group is drawing up major plans to rebuild the company.
Joint venture with foreign players and entry into newer segments, among others, are being closely evaluated as part of the strategy to improve the topline of Shanthi Gears, a subsidiary of group’s flagship Tube Investments of India Ltd.
It is expected to finalise the plans for collaboration with global firms by the end of this fiscal.
“Presently, a very large percentage of high-end gear-boxes are imported due to technical nature of these products. But, as the market is growing in automotive and other sectors, foreign makers do see the need to set up facilities here. Many of them tried to come on their own in the past, but found it difficult to sustain. As they are now looking for partners, we are talking to a few people in different categories of non-auto segment,” L Ramkumar, Managing Director of Tube Investments of India Ltd., said.
The Rs.152 crore Shanthi Gears, which designs and makes gear and gear-boxes, has been working with two or three foreign firms to jointly explore the potential in the Rs.2,500-crore domestic gear-box industry.
It hopes that the collaboration with foreign players could benefit both sides as Shanthi Gears has space for manufacturing at its units as well as expertise in sales and distribution. Also, after-sales service, an area where foreign players were reported to have struggled in the past, capabilities of Shanthi may provide some edge.
Shanthi Gears had launched a service wing to boost after-sales support, and it aided the company get new businesses. It also doubled its sales force.
“We can join together to offer one-stop solution and after-sales service as there is no such model now in the gear-box business here. We can make their products competitively as we have some spare capacity, while foreign partner can focus on other areas in India. It will be win-win deal,” said Mr.Ramkumar.