In a significant reversal of fortune for Tata Bearings (Kharagpur, India), parent company Tata Steel has decided to expand, rather than sell, the division.

Tata Bearings has acquired a factory from Antifriction Bearings Company (ABC) of Bharuch in Gujarat. The company has also announced aggressive production growth, relationships with Japanese bearing manufacturers and plans for moving into the world market with a wide product line of ball bearings and tapered roller bearings.

The ABC acquisition boosts Tata Bearings' ball bearing production capacity from 15 million to 25 million units, simultaneously expanding the breadth of the product line. The machining and grinding equipment in the ABC factory is largely from Japan's Izumi Machine, run with technical assistance from NSK Corporation.

"There was a time when we were thinking of selling the division, but now we not only want to keep it, but we want to keep on growing," said Dr JJ Irani, Managing Director of Tata Steel. In 2000, Tata Bearings reported an 11% increase in sales volume, to 16.5 million units from 14.9 million in 1999.

Tata, however, will only be manufacturing ball bearings. The company will not be allowed to produce tapered roller bearings until 2002.

The Timken Company (Canton, Ohio) and Tata Steel had been in a joint venture, manufacturing tapered roller bearings for over ten years. That arrangement ended in 1999 when Timken took over the entire operation as Timken India. The terms of the divestiture prohibit Tata from manufacturing tapered roller bearings for three years.

Until that noncompete agreement expires in 2002, the company is permitted to manufacture tapered roller bearings only for Tata Engineering and Bosch fuel pumps.

Once the noncompete expires, Dr Irani said Tata Bearings would be moving aggressively to manufacture tapered roller bearings, especially because of their export market potential.

In 2000, Tata Bearings established a technical collaboration with Nachi Fujikoshi (Tokyo, Japan) for automotive bearings, helping Tata achieve higher quality and market acceptance. However, Tata's acquisition of ABC brings with it a similar relationship between ABC and NSK Corporation (Tokyo, Japan).

The future of these collaborations involving rival Japanese bearing companies is yet to be determined.

Although India remains in the midst of a prolonged recession, Tata Bearings expects sales from its current facilities to rise by 500,000 units in 2001, and the joint factories to increase their production by three million units over the next two years.