Cutting-edge technology and innovation prove key differentiators
Bharat Forge Ltd. (BFL), the Pune-based Indian multinational and the flagship company of the Kalyani Group, is a leading global ‘Full Service Supplier’ of forged and machined, powertrain & chassis components. The company is India’s largest exporter of auto components. With manufacturing facilities spread across India, Germany, Sweden, France and the US, Bharat Forge manufactures a wide range of high performance, highly engineered critical and safety components for automotive and industrial applications.
BFL’s consolidated revenues for FY 2017 stood at Rs. 65,982 million and consolidated profit after tax stood at Rs. 7,107 million compared to Rs. 6,754 million in FY 2016, up 5.2%. Domestic sales grew by 5.6% mainly on account of growth in M&HCV revenues and robust 13.4% growth in industrial revenues benefitting from new orders across sectors. During 2016-17, the company has secured long-term export orders of $80 million, and domestic orders worth Rs. 270 crores from various segments for existing as well as new products.
“Our company has been recognized and bestowed with many prestigious honours over the past 12 months. It received the Daimler Supplier Award 2016 – Global Procurement Trucks and Buses for the International supply of best quality crankshafts and front axle beams. We were also the recipient of General Motors Supplier of the Year Award 2016. The “TIME Indian Global Manufacturer for the year 2017” Award for our leadership in Indian manufacturing segment was the proverbial icing on the cake”, said Mr. Baba N. Kalyani, Chairman & Managing Director, BFL.
Product transformation
With a customer base that includes top-5 global commercial vehicle and passenger vehicle manufacturers, and virtually every global OEM and Tier-I supplier in the automotive space and a wide range of marquee customers in the industrial sector, BFL today is among the few global component manufacturers with capability to offer front line design and engineering, dual shore manufacturing capability, and full-service supply capability. It takes pride in being at the vanguard of a globalizing India, and to contribute to ‘Make in India,’ which is fast becoming a global brand in the manufacturing industry.
Bharat Forge has always believed in its ability to transform and grow by developing differentiated products using technology and in-house R&D capabilities. A recent example is the conversion of cast iron chassis components to aluminium forged chassis component for an OEM in India. This innovation created a substantially light-weight chassis, which improved fuel efficiency. Over the next few years, the company will leverage its expertise built on 4M’s (Metallurgy, Metal forming, Manufacturing and Machining) and R&D capabilities, to provide agile and adaptive solutions to its Indian and global customers.
New growth avenues
BFL’s foray in new segments – Defence, Aerospace, Railways, etc., will drive growth and reduce exposure to cyclical ups and downs. In the near future, its aerospace business is likely to evolve as one of the fastest growing verticals. This growth will be driven by customer traction and product expansion including development with unconventional materials. The defence components business is also expected to witness robust growth driven by its focus on developing new value-added components and products. In the medium term the company’s aim is to increase revenues from the newer segments, which presently contribute to 5% of the total revenues.
The ‘Make in India’ campaign is a manifestation of the Government’s lofty ambition to transform India into a global manufacturing hub. The company is poised to play a meaningful role in this mission, with indigenously developed cutting-edge technologies and innovations. Its focus on developing new processes, expanding the product portfolio, and leveraging innovation capabilities, is opening up new growth avenues.
Technological advancement
During the year, Bharat Forge has secured $120 million worth of new business wins spread across geographies and business verticals. A majority of these wins are for new products developed over the past 2 years. It has acquired Walker Forge Tennessee for around $14 million. This acquisition creates a strategic manufacturing footprint in North America to leverage the existing customer relationships. At the same time, it will enable the company to cater to new end-market segments and broaden the product portfolio. This will happen through the product offerings in the passenger car and commercial vehicle segments, and also in industrial sectors such as construction and mining.
The company’s in-house R&D team has been committed to work on various projects including developing technologies to minimize carbon footprint and manufacture light weight products that result in lower energy consumption. Innovation is an on-going process which has helped explore new ideas and deliver transformative solutions. Smart manufacturing or Industry 4.0 is a key enabler that can help India realize the goals of ‘Make in India’ initiative. Bharat Forge is focused on preparing the organization for the times to come. On the one hand, it has proactively been investing in machines and manpower, and on the other hand, set target of realizing Industry 4.0 standards in the near future.
A total of 10 patent applications were filed by BFL in FY 2017, taking its overall tally of patents filed to 34. Already, the company has been granted four patents while the remaining await evaluation. BFL has a healthy pipeline of patents for the next year too, on which work is in progress.