‘Indian subsidiary to start production early next year’
-K. Gopalakrishnan
Global demand for bearings is projected to rise by five per cent annually to over $40 billion in 2010. Bearings demand will be stimulated by acceleration in world economic growth, expanding manufacturing operations and rising aerospace equipment and motor vehicle output.
Market advances in developing parts of the world, including the Asia/Pacific, Africa/Middle East, Eastern Europe and Latin America regions, will considerably outpace demand in the US, Western Europe and Japan. India and China will register the largest gains as both the countries continue to develop as economic centres with sustained growth in manufacturing and investment.
European Bearing Corporation (EBC), part of the EPK Group of Russia, is one of the largest manufacturers of all bearings for automotive, power, coal, cement, stone crusher and steel industries. In its endeavour to expand outside Russia, EBC has identified India as a potential market, and in 2007 it established its 100 per cent subsidiary, EPK Bearings India Private Ltd., headquartered in Hyderabad. Mr. S.S. Rao, with more than 30 years of experience in automotive and bearing industry, has been appointed its Managing Director. Right now bearings are being imported from EPK - Russia, and sold locally. EPK India will start production in Hyderabad by the middle of 2009.
European Bearing Corporation has plants in Moscow, Volzhsky, Stepnogorsk, Samara and Saratov. Managed by EPK Holding Company, it is the largest bearing manufacturer in Europe, with its share in the CIS market of more than 33 per cent which is twice that of its nearest competitors. The total annual plant capacity is 52 million bearings of more than 6,300 types.
EPK has six manufacturing plants, an R&D wing and a centralized sales department known as EPK Trade House based in Moscow. The plants manufacture all types of bearings with the outer ring diameter ranging from 20 to 2200 mm used in automotive, metallurgy, heavy engineering, mining, energy and machine tool industries.
EBC plants produce the widest range of ball and roller bearings in the CIS for Russian and foreign automobiles. EBC Holding is a major OEM bearings supplier to Russian auto manufacturers. In fact, seven of 10 cars of Avtovaz, the largest Russian automaker, are equipped with EBC bearings. They are also used in every UAZ car, in six out of 10 Kamaz trucks and in many other cars, vans, buses and trailers made in Russia.
Taper roller bearings constitute a major portion of EBC production volumes, and durability of roller bearings exceeds that of ball bearings. High reliability of EBC wheel roller bearings installed in Kamaz rally trucks has contributed to the success of the company team which won many international races, including Paris-Dakar.
EBC Holding, operating through its wide dealer network, has a significant share in the aftermarket sales. Demand for these bearings keeps growing due to the steady increase in the number of customers who have confidence in the high quality of EBC products. One of the reasons is that EBC has been supplying Russian automakers with bearings for many years. Another reason is that EBC is the only Russian bearings producer who has a special joint marketing program together with Autovaz selling EBC bearings in a package under the Lada brand. It means that the leading national auto manufacturer trusts EBC and recommends using its bearings.
Indian business
EPK is quite bullish about the growth prospects in India, thanks to the enormous grow in demand for bearings. Most of the major manufacturers have got their capacities booked till 2010. Understandably, companies are looking for alternate sources for bearing supplies. This offers a huge opportunity for a company like EPK with adequate capacity available at the existing plants.
Early this year, EPK launched its products in the Indian market. The company has already received excellent response from industries like steel, power and sugar. “We have already received significant orders from Bhushan Steel, Bhushan Power, BHEL-Ranipet, Bhilai Steel Plant, etc. We are targeting a turnover of Rs. 60 crores in 2008-09 which is on first full year of operations”, says Mr. Rao.
In the automotive segment, the company is mainly targeting the after-market business in heavy truck, tractor and utility vehicle segments. It has already appointed distributors in all major centres all over India. Initially the focus will be on the aftermarket. In due course it would look at the OEM segment as well. The company is also exploring the possibilities to market wheel hub bearings and gear box bearings in the aftermarket.
“We are expanding our sales and marketing team across India. By the second half of 2009 we will start our manufacturing operations in India. We have already placed orders for machinery and are in the process of creating a vendor base for supplies. We want to create a manufacturing hub for our products in India as this will be the first manufacturing base for the EPK group outside Russia. EPK India will have the right to export from India to any destination except Russia. This offers a very huge opportunity for the Indian company and if things work out as planned, we have set an ambitious turnover target of Rs. 250 crores by 2012”, adds Mr. Rao.
