Targets Rs. 1,000-crore turnover by 2018
Setco at present has two plants in India, one at Kalol in Gujarat and the other in Uttarakhand, besides a small facility in the UK which also houses a research and development (R&D) wing and another facility in the US.
India has caught the attention of the global CV players, and all major players are either chalking out plans to enter the Indian CV market or have already commenced their Indian operations. With an increase in the number of players in the OEM segment, demand for new technology in ancillary products is likely to increase. To reduce operating costs companies generally tend to increase the local content. Being the market leader with almost 85 per cent market share in the OEM segment, Setco will automatically attract the attention of these global OEMs.
With high investment in infrastructure, as announced by present Government, demand for CVs is likely to be robust. For SETCO, increased demand from OE sector along with good demand from replacement market, business is expected to be strong. Working with International CV manufacturers such as BharatBenz and MAN amongst others have opened up export market in a big way.
“Looking at the business environment, the future looks positive for the company. We are expecting a good growth of 40 per cent this year. By the end of 2018, we hope to touch the Rs. 1,000-crore mark,” says Mr. Harish Sheth, CMD, Setco Automotive, in an exclusive interview to MOTORINDIA.
In a few decades, Setco has captured all the major OEMs in its long list of clients which includes Tata Motors, Ashok Leyland, AMW, Eicher, MAN, BharatBenz, etc.
During the late 1990s, the Indian auto market, especially the segment which the company caters to, has undergone a metamorphic change towards meeting global standards. In order to match the pace of the market needs, the company has entered into a technical collaboration with the Lipe Clutch Division of Dana Corporation. Since then there has been no looking back for Setco as it grew from a Rs. 15-crore turnover company to a Rs. 500-crore one in less than 15 years.
On its mission to achieve international excellence, Setco has recently initiated a JV with a Spanish company Lingotes Especiales S.A. to develop and manufacture fully machined ferrous casting products for the automotive and other industries at its Gujarat plant. Lingotes will come in as a technology partner for Lava Cast and the commercial production is expected in a year’s time. “With international experts joining our team, we plan to expand our product portfolio and will soon be seen as a solution provider rather than a component manufacturer,” observes Mr. Sheth.
Setco’s unique business model, market leadership in M&HCV OEM clutch segment, capacity expansion and robust distribution network in OES segment has urged the company to explore neighboring pockets. The company is working on clutches for LCVs and its recent decision to enter the direct aftermarket segment has paid it rich dividends.
As for domestic expansion, the company is aiming to invest around Rs. 75-80 crores in the next one year at its Uttaranchal and Kalol facilities to expand capacity and further Rs. 15 crores in the recently set up state-of-art R&D center to meet the demand for its products. This strategic move will cement Setco as the top domestic player with a wider product range and a smaller time-to-market cycle.