|
|
|
|
|
|
The eBearing News
October 2, 2006
ABC Bearings Reports Quarterly Results
copyright © 2006 eBearing Inc.
ABC Bearings Ltd. (India; BSE Smallcap:
505665)
has reported financial results for the quarter ended June 30, 2006.
Sales were up sharply, to Rs 480.72 million (USD $10.5 million), from Rs 363.89
million ($8.0 million) in 2005.
Net profit was also up, reaching Rs 53.84 million ($1.2 million) from 2005's Rs 35.0 million ($767,000).
Two reasons credited for ABC's improved profitability are its newfound ability to pass along
raw materials cost increases to its OEM customers, and aggressive pursuit
of internal cost-cutting and productivity improvement initiatives.
All of those initiatives are assisted by its strategic partner NSK (Japan). As raw materials costs
ease, ABC pointed out profitability will only improve.
Today, ABC's primary markets are bearings for commercial vehicles (65% of sales )
and tractors (35% of sales), 80% OEM and 20% aftermarket.
Founded in 1960 as a joint venture with Steyr of Germany, ABC initially had only a single
ball bearing plant in Lonavla. Tapered roller and cylindrical roller bearings were added later.
Today, ABC is India's largest producer of tapered roller and cylindrical roller bearings.
Manufacturing facilities are in Gujarat and Maharahtra, with a combined capacity of more than
9 million bearings per year.
Even that capacity is not enough, as ABC will be spending more than Rs 300 million to
expand production capacity by more than 40%.
article: ABC Bearings plans to double production
Ball bearings had been in the product line for more than 40 years. But by 2001, continued losses
in the highly competitive and increasingly commoditized ball bearing line convinced ABC to shift
its focus to roller bearings. The Lonavla plant, dedicated to ball
bearing production, was closed in 2001.
Exports have never been a major focus of ABC's operations, as it remained capacity constrained
selling 98% of its production to Indian manufacturers and distributors. However, with the
additional capacity in place, ABC said it plans to tackle export markets with the help of
NSK. The first markets it will try to work into are Southeast Asia and North America.
eBearing was honored to interview B N Vidholia, ABC's CEO (by email, due to time differences).
In terms of developing target markets, Mr. Vidholia told us that in the OEM sector, while ABC
still focuses largely on commercial vehicles and tractors, it is making inroads into
passenger car markets. At this point, ABC does not do business in the very active 2-wheeler
and 3-wheeler motorcycle and scooter market because it is almost entirely for ball bearings.
Regarding the Lonavla plant closing, Mr. Vidholia confirmed the plant's workers were
offered VRS due to, "not so friendly work force experienced for quite a long period of time."
He dispelled rumors it had been divested to Tata Motors. Instead, Lonavla's capacity was
shifted to the Bharuch plant and the structures themselves were sold.
Mr. Vidholia told eBearing the estimates for ABC's export targets are too low. In fact, he said,
the company's exporting plans are far more aggressive -- growing it to the range of 20% to 25%
of total sales within 3 to 5 years.
About the quarter's strong performance, Mr. Vidholia confirmed
ABC, "is doing extremely well."
|
|
|
printer-friendly version
|
|
- by Bruce A. Carr
from individual research,
tips and commercial sources.
Unauthorized reproduction is prohibited.
|
|
eBearing.com ... for everything that moves™
Entire contents Copyright 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered
trademarks of eBearing Inc.
|
|
|
|
|
| |
eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2008, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
|
|
|
