Kapur: Go West

New Delhi, April 25: Sona Okegawa, a Sona Koyo group company, is planning a greenfield project in Virgina or Alabama in North America to make precision forge gearings.

This will be the company’s first overseas project. Sona Okegawa is a 75:25 joint venture between Sona Group and Japan’s Mitsubishi Materials Corporation. The company is also planning to set up an export-oriented unit (EoU) in Chakand, Pune.

“We have narrowed down on two locations for our overseas facility, Virginia and Alabama. The decision will be taken depending on the benefits offered by each region,” group chairman and managing director Surinder Kapur told The Telegraph.

The company is also open to mergers and acquisitions abroad. “We are in talks with a company. Let’s see which of the options materialises first.”

Kapur said, “Sona Okegawa is ready to fork out $10-20 million for the targeted M&A and $10 million if the company settles for a greenfield project.”

In India, Sona Okegawa will increase capacity to make 20 million forge gears annually by 2010. This will happen after its second facility at Pimpri, Pune, starts operating in October-November this year.

It manufactures 9 million forge gears annually at its facility in Gurgaon.

Of the 20 million forge gears, six to seven million will be exported, while the rest will be used locally, said Kapur. The company has posted a turnover of Rs 120 crore last fiscal and is targeting Rs 320 crore for fiscal 2010.

SKSS profit

Sona Koyo Steering Systems (SKSS), the group’s flagship company, has reported a 61 per cent jump in net profit to Rs 16.2 crore in the quarter ended March 31 from Rs 10.1 crore in the corresponding period of the previous year.

Its gross sales jumped 83 per cent to Rs 214 crore from Rs 116.9 crore a year ago.

The company board has recommended a 35 per cent dividend on over 9.69 crore shares of Rs 2 each (post bonus issue of 1:1).