Leading auto component maker Sona Group is looking cater to the requirements of defence industry is India. The group will evaluate setting up a dedicated unit to cater to the growing defence sector which has seen rising interest from conglomerates like Tata, Reliance and Mahindra.
"A dedicated manufacturing set up for defence sector is a high possibility, not under the listed entity (Sona Koyo Steering) but within the group. We have products that can be used in tanks and other defence vehicles", said Sunjay Kapur, chairman of the Sona Group, well known for its steering systems where it is the largest domestic player. "Our group forging products will be a low hanging fruit. Steering can also be applied to a defence vehicle. Gears can also be used".
Kapur said the defence sector is looking for an organised supply chain. "As a natural step they look at the automotive industry. We are in conversation with a lot of agencies to explore this business". The National Democratic Alliance government has focused on indigenous production of defence equipments under the 'Make in India' campaign. It has granted manufacturing permits to a number of private players.
The current components of auto industry do not have a ready application in defence. "We are closest to them in manufacturing system and processes. We understand manufacturing of quality products at a competitive cost and therefore a typical component person would be in a good position to set shops for the defence industry", said Kapur.
Sona Group, Kapur said, is working towards doubling its revenue to Rs 10,000 crore in next five years. The group will look at new business areas of defence, aerospace and railways in addition to expanding the auto component business to grow revenues.
"A lot of growth will come from the forging business. We will diversify into sectors like defence, aerospace and railway. There will be growth from additional components that we can supply to our current buyers", said Kapur. The group has acquired 30 acres of land in Gujarat between the upcoming Maruti Suzuki plant and recently inaugurated Honda Motorcycle plant. "We already have a plant in Sanand. We see a further demand in that belt," he said.
Sona Group gets 60 per cent of its revenue from the German operations, which gets one-third of sales from Volkswagen Group. But Kapur is working to make the Indian business the bigger contributor to revenue. "Growth is going to come from India and other Asian markets, followed by US. Most of our new manufacturing will be based in India".