November 22, 2008

Indian auto parts makers see opportunities in nuke deal

BS reported that the Indo US civil nuclear deal has opened up an unexpected opportunity for India’s INR 75,600 crore auto component industry reeling from slower demand.

An anticipated surge in the construction of nuclear power plants in India, should the deal go through has prompted several large manufacturers like Amtek Auto, the Sona group, Bharat Forge and Micromatic Grinding to draw up blueprints to supply critical components for such reactors. Several products that auto component companies make have applications in nuclear power plants from precision forgings, gasket rims, ball bearings, pumps, instrumentation panels, piston seals, oil seals and switches.

Mr Vishnu Mathur ED of Automotive Component Manufacturers Association said that “It is a natural evolution. Since the core competence of auto component manufacturers is to produce auto components under exacting standards, it’s a natural fit to venture into the high-margin nuclear industry.”

A widely anticipated quick ramp up in nuclear capacity once the Indo-US deal is finalized is encouraging most Indian companies to consider tie ups rather than metaphorically reinventing the wheel.

Industry experts said that while a margin in the auto component industry is around 15% this could be nearly double for component supplies to the nuclear power industry.