The Hindu : Front Page : Caparo Group plans to invest Rs. 300 cr. in Oragadam plant

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Friday, Mar 09, 2007
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Caparo Group plans to invest Rs. 300 cr. in Oragadam plant

Staff Reporter

WARM GREETINGS: Angad Paul, chief executive, Caparo Group, presenting a shawl to Chief Minister M. Karunanidhi at the signing of an MoU between Caparo Vehicle Products. India and the Government in Chennai on Thursday. — Photo: V. Ganesan

CHENNAI: After the automotive sector, aerospace comes calling in Chennai.

The Caparo group's new plant at Oragadam on the outskirts could signal the city's expansion into the aerospace. "We are confident that with the knowledge base and talent pool available here, it will become a hub for aerospace components and manufacturing as it already is for automotives. We believe we can attract aerospace OEMs [original equipment manufacturers] and bring them here," said Angad Paul, chief executive of the U.K.-based Caparo Group after signing a Memorandum of Understanding with the Tamil Nadu government in the presence of Chief Minister M. Karunanidhi to invest Rs 300 crore in a 100-acre site at the Oragadam SIPCOT industrial complex.

The new plant will manufacture tubular parts for the automotive and aerospace industries, automotive braking systems, fasteners and composite materials. It is likely to start production in a year. The plant is owned by the newly-formed Caparo Vehicle Products India and is expected to generate 2,000 jobs, including direct employment for 850 people.

Admitting that "aerospace is still a small fraction of Caparo's business," Mr. Paul, however, said it is set to change.

"In a 10 to 15-year horizon, I would like to see our aerospace business equal auto, because it's higher in value. The rate of growth of aerospace will outstrip auto," he predicted.

Caparo's existing aerospace clients include jet engine manufacturers such as Rolls Royce and Pratt & Whitney, but the group has already started dealing with Boeing through its sub-suppliers and plans to supply Airbus soon.

The group's Tamil Nadu operations have a major role in these ambitious plans, with the Oragadam site signalling a move from mere components to sub-assemblies and systems engineering.

Caparo could set its sights even wider. "That's why it's called Caparo `Vehicle' Products, because the same facilities should be available for all forms of transport technologies: auto, aerospace and maritime. If rail starts growing in India, we could look at supplying that sector as well... from rail carriages to the actual engineering," said Mr. Paul.

Sriperumbudur plant

The Caparo group has already invested Rs. 300 crore in an auto component manufacturing facility in Sriperumbudur, which will start production in April. When running at full production levels, Mr. Paul expects sales worth Rs. 1,000 crore a year from each plant. He did not rule out a third plant in Tamil Nadu.

"We are loyal players. Once we are committed to a place, we keep on exploring opportunities in the same area," he said.

Charitable work

In his talks with the Chief Minister, Mr. Paul discussed Caparo's plans for charitable work around Oragadam and Sriperumbudur.

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