SUNDRAM

FASTENERS LIMITED

SFL is one of India's largest and most diversified

auto components company.

Background
Sundram Fasteners Limited (SFL) is a part of the
US$ 3 billion TVS group, based in South India. It
was set up in 1966 for manufacture of high-tensile
fasteners. It has diversified over the years into
other products like cold extruded parts, powdered
metal parts / iron powder, precision formed gears,
pump assemblies (water, oil and fuel), rocker arm
assemblies, belt tensioners, radiator caps, gear
shifters and spare wheel tyre carriers. It was one of
the first Indian auto component companies to tap
the global markets for its products and set up
operations outside India.

Product

Details

High Tensile
Fasteners

Standard Fasteners Special

Fasteners-Engine fasteners,
Wheel & under-carriage
fasteners, Chassis fasteners

Powder Metal Parts

& Iron Powders

Engine components,Transmission
parts, Suspension parts, others

Cold extruded
parts and Precision
formed gears

Engine components, Suspension

parts,Transmission parts,
Two wheeler Parts, Auto
Electrical Parts

Engine components

Oil Pump,Water Pump, Fuel

Pump, Rocker arm assemblies

Radiator Caps

Standard metal, radiator

Caps,Special Metal Caps and
Caps to customer drawing

Others

Type carriers, Gear shifters,

Hot forged parts

Its first manufacturing facility was set up at Padi

(Tamil Nadu) to manufacture high tensile fasteners

for OEM. In order to meet the increasing customer

requirements and to cater to international markets,
two additional manufacturing facilities were set up
at Krishnapuram near Madurai (Tamil Nadu) and
Pondicherry. Facilities for cold extruded parts and
powder metal parts exist at Hosur (Tamil Nadu)
and iron powder in Hyderabad (Andhra Pradesh).
SFL also has manufacturing facilities in UK, Malaysia
and China.

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Company

Products

Established

Founder

Distribution

Sundram
Fasteners

Auto
components

1966

TVS Group

India, USA,
Europe, Asia

Production plants
India, Germany, UK,
Malaysia, China

The company's promoters, hold the majority stake

in SFL (nearly 50 per cent).The next largest
shareholder is the Indian public with 27 per cent
stake. Banks, financial institutions, private corporate
bodies and foreign institutional investors hold the
residual shares.

Products and Brands

SFL manufactures and supplies a wide range of auto
/ industrial components such as fasteners, radiator
caps, extruded parts, gear shifters and engine parts.
Fasteners have the largest contribution at 47 per
cent of the revenues. Engine components are the
next largest contributor with 25 per cent of the
revenues, with powdered metal parts and cold
extruded parts contributing to around 10 per cent
of revenues each.
In addition to supplying components to all
manufacturers in the Indian auto industry, SFL also
supplies to global automotive and tractors
manufacturers in key markets like North America,
Europe, Australia and Japan. Some of its important
customers include GM, John Deere, New Holland,
Daimler Chrysler and Cummins.

Financial analysis
The gross revenues of the company have grown to
US$ 237 million in the year 2005, at a CAGR of
19.6 per cent over the last 6 years. Exports have
exhibited an impressive CAGR of 28 per cent and
presently contribute to 25 per cent of the
company's revenues, up from only 17 per cent in

1999.The net profit has grown at around 15 per

cent CAGR over the period to reach US$ 15.6
million in 2005.
The company has faced issues on controlling cost,
especially on key inputs like steel and aluminium.
The buoyant market scenario in both the domestic
and export markets and increase in volumes
enabled the company to post record profits despite
steep hike in steel and aluminium prices.The
operating and net margins have decreased
marginally to 13 per cent and 6.6 per cent
respectively in 2005.

SFL's contribution in making Made in

India global
SFL was one of the earliest Indian auto component
companies that adopted the strategy of accessing
the global markets. As a result, presently around 25
per cent of its turnover is from exports to its
customers across the world.
SFL has followed the route of acquisitions as well
as establishing new ventures with manufacturing
locations in markets outside India to support its
global customers. In 2003, the company had
acquired the precision forged components business
of Dana Spicer, UK, through its wholly owned
subsidiary, Cramlington Precision Forge Ltd.The
manufacturing facility located in Northumberland
produces precision forged components for
application on heavy vehicles for on-highway and
off-highway applications.This acquisition has given

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SFL the distinction of becoming the second largest

manufacturer of finished, cold forged, bevel gears in
Europe, after Thyssen of Germany. It now supplies
to major OEM clients of Dana - MAN, DAF Trucks,
Albion Automotive, Scania, Gratzino,Tractech and
Cook Defence.
In 2004, SFL's subsidiary, Sundram Fasteners
(Zhejiang) Limited, set up a factory for the
manufacture of high tensile fasteners in the
Zhejiang province in China.The company plans to
invest upto US$ 12.5 million to manufacture 6000
metric tonnes of standard and value added
fasteners. The subsidiary would export fasteners
to various customers in Europe as well as nearby
Asian market, in addition to meeting domestic
market needs.
SFL's subsidiary in Malaysia, RBI Autoparts Sdn Bhd,
is engaged in assembling oil pumps and water
pumps for supply to Proton, the Malaysian car
manufacturer. Currently the company is looking at
new product development and scaling up of
capacity to strengthen its presence in the ASEAN
region.

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Recently, the company has acquired Peiner

Umformtechnik GmbH (Peiner), located at Peine in
Germany, from Textron Deutschland Beteiligungs
GmbH, Bonn. Peiner manufactures standard and
special fasteners catering to automobile, industrial
and construction sectors. It supplies its products
directly to OEM customers as well as through a
strong network of distributors.This acquisition has
given SFL access to relationships with blue-chip
customers including Daimler Chrysler, BPW, DAF
Trucks, Sofrasar (Renault), Reyher etc. besides
Textron. It will also help SFL to increase exports of
its own products manufactured in India, including
fasteners, not currently in the manufacturing
programme of Peiner. SFL will also be able gain
access to retail market through the strong
distributor network of Peiner.

During 2005, Sundram Bleistahl Ltd, a subsidiary of

the company and a collaboration with Bleistahl
Produktions GmbH and Co KG, Germany, set up a
factory at Hosur for manufacture of valve seat
inserts.These would be exported Bleistahl in
Germany.

Factors fuelling Sundram's global

initiatives
SFL has been quick to realise the global nature of
the auto component industry and the need to
service customers all around the world. It has
established the footprints of a global business with
operations in many continents. Some of the key
factors that would drive future performance are:
Global outlook: SFL was one of the first Indian
auto component companies to realise the need
to operate on a global scale and has adopted
appropriate strategies including acquisitions and
setting up new ventures abroad. As a result, the
company has been able to access large global
players like General Motors, Delphi Automotive,
Cummins Engine Co and Deere and Co, Daimler
Benz, Deutz Motors, Holset, Iveco, MTU, Proton,
Valeo and ZF as its clients. It is on the lookout

for attracting new customers either through

market expansion plans or through acquisitions
of existing companies.
Technical competence: SFL has over three
decades of technical expertise in developing
special (made to drawing) fasteners for a wide
range of applications.The special fasteners range
includes cylinder head bolts/studs, connecting
rod bolts/nuts, main bearing cap bolts, hub/wheel
bolts, wheel studs, hub nuts, two piece wheel
nuts, track shoe bolts/nuts, two wheeler spindles
etc. It has two dedicated plants to cater to the
socket products market and an exclusive hot nut
former module to manufacture large nuts.
Further it offers a range of surface finish options
along with the fluoro carbon and dacromet
coating with various topcoats and microencapsulation on threads.
China manufacturing base: SFL is the first
engineering company from India to set up
manufacturing facility in China and engineer
products for the market. China is the fastest
growing auto market in the world and is
expected to emerge as one of the top three
auto markets in the future.The manufacturing
facility in China provides Sundram Fasteners an
access to the growing Chinese domestic market
and other Asian markets.

Future plans
SFL continues an aggressive policy of inorganic and
organic growth. Its recent acquisition of Peiner
Umformtechnik, a German fasteners company,
would provide SFL with access to leading European
manufacturers.The company would continue to
focus on exports and plans to increase the share of
non-Indian revenues to around 50 per cent of total
revenues by 2010.The Chinese operations and the
other operations abroad would have an increasingly
larger role to play in increasing export
contribution.The company targets to set up new
ventures or acquire new companies, wherever it
provides it with a competitive advantage like an
access to market or to new customers.

Globalisation at a glance

Exports currently constitute nearly 25 per cent of

Focus on quality: The company's quality

systems have been accredited with ISO:9000 2001, QS-9000, ISO-TS-16949 and ISO-14001.
The company has focused on meeting stringent
quality requirements of its global customers and
has adopted a number of measures to meet the
same. It adopted the Total Productive
Maintenance Program in 1995 with an aim of
achieving high quality and low cost operations
and was the first Indian engineering company to
get the TPM Excellence Award in 1998 and
TPM consistency award in 2004-05.

total sales
First company in the Indian engineering industry to
set up a green field venture in China to
manufacture high tensile fasteners for the Chinese
and international market
Acquisitions made to support its globalisation plans
- Dana Spicer, UK, manufacturing precision forged
components for heavy vehicles, and Peiner
Umformtechnik GmbH, Germany, manufacturing
standard and special fasteners

www.sundram.com

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