UNO Minda to Expand Gujarat’s Manufacturing Capacity

The UNO Minda Group is expanding its manufacturing capacity in the areas of lighting, airbags, alloy wheels, blow molding parts and four-wheeler switches in Gujarat.

In addition, it is also making investments overseas with a new facility in Mexico for horns, NK Minda, Chairman and Managing Director confirmed to ETAuto. The total investments are pegged at Rs 600 crore for the new plants in Gujarat, consolidation and overseas expansion.

As the supplier of automotive solutions to OEMs globally is in a process of consolidating its business and shoring up manufacturing capacity both locally and overseas, contributing to an uptick in both its topline and bottomline.

To fund its investments, the group has already raised Rs 300 crore in QIPs. In addition, internal cash accruals and surplus funds of Rs 300 crore will be harnessed for funding the new projects.

Although, it has a plant – Roki Minda Company -- that produces air and oil filters in Gujarat, four new plants are lined up in these specific products over the next 12 months.

These will service the requirements of its key customers such as Maruti Suzuki and Honda Motorcycle and Scooter India in the state.

The group will be investing around Rs 300 crore in the greenfield facilities in Gujarat, funded partly through debt and equity of which 50 per cent would be funded by the Minda Group and the balance its joint venture partners, said Sudhir Jain, ED & CFO, Minda Industries.

Its JV partners include Tokairika for automotive switches, Kosei Aluminium for alloy wheels, Kyoraku for blow molded parts and Toyoda Gosei for airbags, who will be investing in the Gujarat plants.

“We have already acquired land for alloy wheels and construction has started on it. Other projects have been approved and construction will start soon. These plants will generate a turnover of Rs 1,000 crore when they are fully functional in the third year,” elaborates Minda. The existing capacity of the filter plant will also be scaled up.

Meanwhile, UNO Minda is also growing its presence overseas in Mexico. It already has a presence in Indonesia, Vietnam and Spain through Clarton Horns that it acquired in 2013 and now it is expanding its penetration in Mexico by setting up a new manufacturing unit, where it already has a small set up for making horns.

In phase I, the Mexico plant will service Volkswagen, and in phase II, it will meet the needs of Ford and General Motors in Mexico and the US. The plant will be operational by April 2018 and is currently under construction.

The international operations will contribute 25 per cent of its turnover by 2020 from the current 17 per cent. “It is a moving target. We will be investing Rs 100 crore in the Mexico plant in two stages and another Rs 200 crore in Clarton Spain, Vietnam and Indonesia for expansion of switches and lamps for two-wheelers and four-wheelers under PT Minda Asean Automotive and Minda Industries Vietnam Company,” added Jain.

The group maintains that it has acquisition proposals on the radar but nothing is concrete as of now. In the meantime, it is studying the potential of making some critical electronics parts for electric vehicles.

“We are evaluating the commercial viability of entering into lithium-ion battery manufacturing for small vehicles. We hope to ink a joint venture with an internationally-reputed company for tapping technology for the batteries,” commented Minda.

Earlier, it had formed a joint venture with Panasonic, but after its exit last June from the association, UNO Minda is scouting for a new partner.