Minda Ind to ramp up capacity, sees vol constraints in FY11

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Minda Ind to ramp up capacity, sees vol constraints in FY11

In an interview with CNBC-TV18, Vivek Jindal, Executive Director, Minda Industries, spoke about the company's plans, on capacity utilisation, and a gave general outlook on the auto ancillary segment.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Minda Industries has target of Rs 322: Tulsian ALSO READ See latest News about Minda Ind See previous management interviews See what other Experts & Brokerages are saying about Minda Ind Minda Ind BSE | NSE 29/05/12 Are Mutual Funds betting on Minda Ind?

Auto component manufacturer, Minda Industries has planned a foray into aerospace. The company which manufactures components for mobilities like two and three wheelers, passenger cars, commercial vehicles, says it was a natural progression for it to be foraying into aerospace, railways and defence. The company, it is learnt, has been talking to a few US and UK players to partner in a joint venture.

In an interview with CNBC-TV18, Vivek Jindal, Executive Director, Minda Industries, spoke about the company's plans, on capacity utilisation, and a gave general outlook on the auto ancillary segment.

Here is a verbatim transcript of his interview. Also watch the accompanying video.

Q: We hear that you are foraying into allied spaces like aerospace- what can you tell us, you have a shortlist of JV partners whom you have identified? Just how concrete is your diversification plan?

A: You are right, we are foraying into aerospace. For us as an auto component manufacturer, we are into all kind of mobilities like 2-3 wheelers, passenger cars, commercial vehicles of road. So for us it was a natural progression to be foraying into aerospace, railways and defence.

At this point of time, I would not be able to disclose who we are partnering with and what our components would be. But later during the year we would be able to reveal. But it will definitely be our existing products like electrical and electronic products.

Q: What sort of timeline are we looking at? When does this entire new story, this new phase of growth in terms of electrical products for aerospace, for defence and for the railways pan out? Is it still a 2-3 year story by the time you finalise JV partners start actually executing orders, understand the space an actually see some revenues come into your topline, or is this a slightly more short-term story and you are going to pretty much implement it by early or mid this year?

A: I would expect the topline from this new foray to be coming in another one to one and a half years from now.

Q: What kind of market size are you looking at? Any ballpark figure on how this would change your revenue profile?

A: We are in a very preliminary stage of talks, geographies and product line is yet to fructify. But all I can say is you can hear from us in another 12-18 months.

Q: What is the capacity utilization at this point in time? Most of the auto ancillary companies had suffered low capacity utilization same time last year? How have things improved - are you at least producing to capacity now?

A: At the same point of time last year, capacity was a liability. But at this time of the year we are about 90-95% capacity utilization is where we are working on. And looking at the volumes that have come our way for the next fiscal year, I think we are in the process of ramping up our capacity.

Capacity is going to be a constraint because in the last two days I feel seeing is believing. There are 10 cars that have been launched, unveiled and almost everyone is talking about 50,000-1,00,000 volume and so that translates into capacities. We are taking a very proactive look at that and capacity utilisation I feel is going to be a concern in 2010-11.