Kinetic to start component supplying for Nano in two months

30 Jun, 2008

MUMBAI: Kinetic Engineering on Monday said it will start supplying component for Tata Motors' small car project within the next two months.

"Successful and speedy completion of the facilities expansion for manufacture of transmission gears for the Nano is our key focus at this time. We will begin supplying component to Tata Motors' small car project within two months from now," Kinetic Engineering's Chairman Arun Firodia told reporters.

Tata Motors' Managing Director Ravi Kant had said Nano would be rolled out from the Singur plant in West Bengal by Durga Puja this year and hoped to start trial production during July or August.

Kinetic Engineering is putting up an assembly plant within Tata Motors' Singur plant with an investment of Rs 55 crore and setting up 'a factory within the Ahmednagar factory' for ramping up power train components manufacturing and setting up gear manufacturing facilities entailing an investment of close to Rs 50 crore.

The company had raised Foreign Currency Convertible Bonds aggregating $18 million. AIG Investments also invested Rs 25.6 crore via Compulsory Convertible Preference shares in the company.

"We will use these resources to fund the proposed investment," Firodia said.

Firodia said that the small car project of Tata Motors would add substantially to Kinetic Engineering's topline and bottomline in the coming months.

Kinetic Engineering was on a comeback trail following the extensive restructuring taken by the company during the last two years where the company has hived off its two-wheeler business and focused on its business model towards auto components with a special focus on power train assemblies and components, he said.

Kinetic Engineering recorded a net profit of Rs 11.8 crore for the quarter ended March 2008 as against a net loss of Rs 6.32 crore for the same period in previous year.

Net loss for the year ended March 31, 2008 came down to Rs 25.84 crore for the year ended March 31, 2008 as against Rs 42.29 crore in the previous fiscal.

source:economic times