(This was originally posted in Money Control by Swaraj Baggonkar)
Bharat Forge is looking to acquire 175 acres in an industrial park near Pune for Rs 240 crore which will house new factories for its defence and electric mobility business divisions. These new assets which will come up at Khed City, will manufacture specialty vehicles, certain systems, and aggregates that go into artillery guns and an assembly plant which will also house a testing facility, a top Bharat Forge official said.
Khed City is a joint venture between the Kalyani Group and the Maharashtra Industrial Development Corporation (MIDC) and the facility is expected to be operational in the next 2-3 years. Speaking to analysts, Amit Kalyani, Deputy Managing Director, Bharat Forge said, “We are seeing substantial growth opportunities in e-mobility and in defence (businesses) and we are now looking at building two new mega sites in close proximity to each other”.
“We are looking at acquiring a parcel of land of about 175 acres in the Khed industrial park which is a joint venture between the Kalyani Group and MIDC. The total land acquisition cost would be up to Rs 240 crore, Kalyani further added. The Pune-based forging giant decided to go in for a greenfield facility, especially for defence, due to a regulatory need that requires some added levels of security.
“As far as defence is concerned, we have to go into an area which is separate from the existing plant because there are very stringent rules regarding security. And for e-mobility we need a supplier park and allied services around it,” Kalyani added. In May 2021 Bharat Forge said it will assume full control of Kalyani Strategic System by buying the remaining 49 percent stake in the company and thus make it a fully-owned subsidiary. The buyout was made to help KSSL qualify for defence bids that demand certain requirements.
“We are setting up the facility of three products. One is going to be specialty vehicles, second will be certain systems and aggregates that go into a variety of products and third will be our assembly plant and testing facility for both vehicles and other systems and aggregates that go into vehicle drivelines including our artillery guns. Basically, we are developing a whole new family of vehicles and platforms and we see this for opportunities at the global level,” Kalyani added.
As far as defence orders for the Indian armed forces are concerned Kalyani added that the company has already received an order for one of its platforms. “We are working on two other platforms for India and we see tremendous opportunities going forward,” Kalyani said.
Bharat Forge’s Advanced Towed Artillery Gun System (ATAGS) is understood to be currently undergoing testing with the India Army. This is a new generation of artillery system in use by a few technologically advanced armies in the world but the Indian Army does not have any ATAGS in its arsenal at the moment.
“Our product (ATAGS) is ready and our facilities are aligned. We can manufacture four guns a month right now and in two months we can go to six guns a month and by the end of the year we can go to 12 guns a month,” Kalyani added.Bharat Forge has lined up a capital expenditure (capex) of around Rs 300 crore for FY22 while for FY23 the capex could be at around Rs 250 crore.