ALFA Laval to shift production unit to India
Company Website
alfalaval.co.in
Shubham Mukherjee (Economic Times)
NEW DELHI 25 AUGUST
ALFA Laval India Limited, a subsidiary of the Swedish engineering group has decided to relocate one of its manufacturing divisions from Sweden to India and has also given its Indian arm the responsibility to carry out the group's fabrication activities from India as a part of its global restructuring plans. The company has also bagged three back to back orders worth Rs 80 crore each from Smithkline Beecham for setting up spray dryers and evaporators at the latter's facility to manufacture 'Horlicks' in Haryana, Satish Tandon, managing director, Alfa Laval India Limited, told The Economic Times. The entire project would be completed in three phases.
"We are also negotiating with four other companies for supplying our machines and we hope to bag one of the orders soon," Mr Tandon added. He, however, declined to give out details of these orders.
The company plans to pump in Rs 20 crore this year in its various businesses. Separators would see a large part of the investments, followed by other divisions like the thermal, oils and proteins divisions. By the year 2001, we will double our turnover from Rs 50 crore to Rs 100 crore, Mr Tandon added.
Alfa Laval has recently signed 'an agreement to sell' for its dairy and liquid foods division to Tetra Pack, which would see a cash inflow of Rs 25 crore into the company. The company has projected a net profit of Rs 16 crore to Rs 17 crore as a result of this sale for the current financial year.
As far as the relocation is concerned, the company came to a conclusion that the centrifugal separator division at Sweden was no longer economical due to labour cost, Mr Tandon said. The Swedish division has also lost lot of orders in the world market (recent ones in Malaysia, Thailand and Indonesia) because of its high costs.
Since Alfa Laval India's centrifugal separator division is 'highly profitable, it has been decided to relocate the business in India. The Swedish division, which has a capacity of manufacturing 120 machines, will come down to 60 next year and close down the year after, he added.
'The Indian division's bids are 30 per cent cheaper because of low cost of labour and hence it is easier for the Indian division to bag orders internationally", he said. The division does a business of Rs 30 crore in India and Rs 8 crore in the export market at present. The company will invest Rs 8 crore this year on this division in importing machines for manufacturing separators.
"WE have also entered into an agreement with our Swedish parent for handling all global fabrication orders from India," Mr Tandon said and added that now it is being manufactured at Copenhagen in Denmark.
The Indian arm has also been given the responsibility of handling the oils and proteins (food related) businesses in the African markets like Egypt and markets like Turkey for setting up refineries.
The company is also planning to double its decanter business from an existing capacity of 150 machines to 300 by 2001. It will invest Rs 5 crore and hopes to add another Rs 15 crore sales to the existing turnover of Rs 14 crore for the division.
Alfa Laval is engaged in the business of manufacturing and setting up centrifugal separators, heat transfer and project engineering services in India and abroad. The dairy division was sold off since it did not form part of its core activity as a part of the restructuring. |
