India's Amara Raja Batteries Ltd plans two-wheeler battery plant of 11 mn capacity

Thursday, May 07, 2015

Amara Raja Batteries Ltd on Wednesday said it is planning to expand its two-wheeler battery capacity to over 22 million per annum in the next two years.

"The current capacity (of 11 million) will take care of the market requirement for this and next financial year. That means it will cater up to 2016-17. We need additional capacity after that. It would be more than 11 million per annum.

"For that we need to start working 18 months before. So we started the planning including the technology and designs we are going to use for the new plant," Amara Raja Group chairman Ramachandra N Galla told reporters here.

He, however, did not disclose the investment outlay.

Galla said that the company is looking to set up the proposed plant at northern or western part of the country.

"We are evaluating all options. I cannot say whether it will be a single location plant or multiple. But we will use the best technology," he added. Meanwhile,

Andhra Pradesh Chief Minister N Chandrababu Naidu will inaugurate Amara Raja's four-wheeler automotive battery plant at Nunegundlapalle village in Chittoor district with an installed capacity of 2.25 million units per annum tomorrow.

With this, the total capacity of the four-wheeler automotive battery plant will be 8.25 million units annually. Galla said currently the company is supplying products to Mahindra, Honda and Hero MotoCrop and negotiating with Bajaj for supplying the two-wheeler batteries under OEM agreement.

"We cannot put any timeframe for the agreement to close. They (Bajaj) expressed satisfaction over the precut quality. Negotiations are going on," he said.

On export market, he said the company's focus would on be southeast Asian market as the region is one of the largest markets for two-wheelers. "Today we dominate Singaporean market. With the modified tax structures under FTA with ASEAN, we will be focusing on other southeastern markets also," the chairman said. About revenues, Galla expressed hope that the group would achieve USD one billion by the end of the next year.

It clocked Rs 5,400 crore of revenue (tentatively) during the last financial year.

The group's flagship company Amara Raja is yet to announce the fourth quarter results. The group also has interests in fruit processing and infrastructure, among other sectors.

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