NBC Bearings rolls out capacity expansion plan

Date: 2016-10-29

NBC Bearings rolls out capacity expansion plan

Precision ball bearings from 6mm bore to 75mm bore diameter are made at the Jaipur plant which has state-of-the-art manufacturing facilities.

CK Birla Group company NBC Bearings, which has been growing its presence in India and overseas, has completed the first phase of setting up its fourth plant at Savli in Vadodara (Gujarat) and added 17 manufacturing lines.

Phase II will take another six months for completion with production to kick-start in the second half of 2017.
Once fully operational, the Gujarat plant will add 40 percent capacity to the total production. At present, NBC manufactures 100 million bearings annually and will add 40 million units capacity, part of which will be for OEMs like Hero MotoCorp, Honda and Maruti Suzuki. Each Hero MotoCorp motorcycle uses 14-15 bearings supplied by NBC. While the company also caters to commercial vehicle and tractor manufacturers like Mahindra and TAFE, about 25 percent of total capacity is consumed by exports to the US and Germany.
At present, the Gujarat plant has two assembly lines solely for bearings for the export market. These bearings are exported in knocked down kits by OEMs. “We will take about two years to fully complete the Gujarat plant and are looking at the next expansion in Andhra Pradesh or in the state of Telangana as the governments there are offering several incentives for setting up base in an automotive special zone,” Rohit Saboo, president and CEO, told Autocar Professional.

Aware that the next phase of growth will emanate from new product development and acquisition of new customers, NBC is developing third-generation low friction and low torque bearings that have improved life duration and better performance. These bearings will eventually help reduce vehicular tailpipe emissions. A few test bearings have been developed and are currently undergoing testing. For meeting BS-VI emission norms, the exhaust bearings, however, form a minor part of the entire fuel exhaust system.

Understandably, for NBC Bearings, exports are slated to be a huge focus as the company is developing several new customers in Tier 1 players globally who supply parts to OEMs. The company has placed its own engineering and marketing team in Germany and very soon will do the same in the US. “We are getting a fairly good response from these regions and have projects that will start in 2017 and 2021. On the railway side, we are supplying wagon wheel bearings to South Africa, US, China and Brazil,” adds Saboo.

Going forward, the company’s priority will be commercial vehicles, passenger cars and farm equipment in terms of exports. While five years ago export revenues stood at US$ 5 million, they have risen to US$ 35 million now and in the current fiscal will account for 17 percent of the turnover, rising to 30 percent by 2020. The company is targeting a topline of Rs 1,800 crore in 2016-17 from the current Rs 1,700-odd crore of which 60 percent accrues from automotive, 30 percent from railways and 10 percent from the industrial sector. Growth is expected to continue on the same path albeit exports in automotive bearings may pick up further.

Future roadmap and R&D centre

In its quest to develop new products both for domestic and overseas clients, NBC banks on its R&D Centre in Jaipur. The facility began operations around seven years ago with 40 engineers and has now expanded to house 120 staffers.

The company’s network of consultants in the US works independently, be it for marketing of products or tapping new clients. They gather engineering inputs, understand customer requirements and offer the feedback to the Indian team that carries out the detailing work. NBC is currently in talks for new business with Daimler, BMW, Conmet, and Tier 1s like Meritor and American Axle on the commercial vehicle side.

To ensure seamless growth in capacity for the future, NBC Bearings plans to invest Rs 750 crore for organic growth and another Rs 500 crore toward inorganic expansion, based on the finalisation of an acquisition the company is actively scouting for. Funding would be routed mainly through internal accruals and part bank loans.

On the inorganic path, the company is studying future acquisitions based on whether they will bring into its fold new markets, new technologies and new products as well as new locations in the US and Europe where it is eyeing new plants. It is mapping the potential of bearings companies in these geographies and looking to offer needle bearings which have a specific application in addition to clutch release bearings and steering bearings. NBC currently does not produce car steering bearings but makes bearings for bike and commercial vehicle steering. With passenger cars now equipped with new-generation power steering, a different technology has to be harnessed for bearings within them as well.

Once fully operational in the second half of 2017, the Gujarat plant will add 40 percent capacity to total production.

With India fast catching up with global trends, NBC’s R&D centre is now developing bearings for new models as well as various third-generation bearings. It is understood that the second-generation bearings did not prove to be very successful and were eliminated. The third-gen bearings are integrated for wheel applications in cars, are easy to install and offer an improved life for the wheel. Something which both OEMs and the end consumer would approve.

This feature was first published in Autocar Professional's October 15, 2016, issue.

(autocarpro.in)

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NBC Bearings rolls out capacity expansion plan

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