The Jaipur-based National Engineering Industries (NEI), that makes bearings under the NBC brand for passenger vehicles, two-wheelers, commercial vehicles and industry applications, is all set to expand its exports to new markets through capacity expansion, acquisition and diversification.
The company is present in over 25 countries in the NAFTA region, Europe, SAARC and West Asia, and Japan. Sanjeev Taparia, SVP – Marketing, NEI told Auto Components India, that, “About 25% of our business comes from these countries. We plan to expand our global footprints to 10 more countries in the Eastern Europe and Latin America.”
NEI has been expanding its production capacity for this export expansion. It has invested Rs 250 crore in its Vadodra plant in Gujarat and is planning to invest another Rs 250 crore on the same plant to produce 35-40 million bearings annually. “This expansion would be completed next year and then we will set up 1 more plant in the Jaipur area. We have got the land for this. We are adding new capacity lines as we will be entering the new markets in the coming years,” he added.
For further expansion in the international markets, the company is also planning acquisition of companies outside India. “We are looking at companies making bearings and bearing-related products in Europe and America. But we still cannot say when the acquisition will happen,” Taparia said.
In order to expand its market reach, NEI is planning to diversify and develop new products for industrial applications, and new integrated products for automotive industry. At present NEI is working on 3 trends: safety and reliability, fuel efficiency and mechatronics. It is following these trends in its production planning and implementation.
Sanjeev Taparia, SVP – Marketing, NEI
“Currently the company comes up with 70-75 new products every year for the automotive industry. Some of them are standard products but a lot of them are new concepts. The company is working on low-torque bearings which will help increase fuel efficiency by 2-3%. We have lately developed a pre-set hub assembly, which finds application in the wheels of commercial vehicles. Wherever wheel is involved, taper roller bearings will find use along with the hub, which is the conventional way of doing it. We pre-assemble the bearings on the hub and supply that to OEMs.”
“Currently, the trucks in India are using conventional bearings, assembling them in the respective manufacturing setups and then deploying them on the truck. The life of such product is about 1 lakh kilometers. With the pre-set hub assembly, the OEMs do not need to customise the product and can deploy it off the shelf. Once operational, the assembly does not need any intervention for up to 3 lakh kms which results in higher life and less maintenance. Though this is for the first time that we have brought this product in India, in the foreign markets such a product is very popular and has been getting demand from NAFTA market. We have started supplies for Volvo Trucks and have been in talks with other leading OEMs,” Taparia adds.
Currently in the domestic market, NBC brand has a market share of 24%. Churning out over 100 million bearings in over 1000 different sizes on an annual basis, for now the company has the capacity to manufacture bearings within a range of 10mm bore to 2000mm outer diameter. This will get a push further when NBC’s new plant in Savli, Gujarat becomes fully functional. With the new plant, the company plans to push its overall production capacity by 40% to reach 140 million bearing units annually and has plans to invest close to Rs 700 crore in a phased manner. NBC bearings spends 1.5% of its overall revenue in R&D of new products at its Jaipur R&D facility. With CV market recovering faster, Taparia feels the R&D spend might go up to 2% in future as most of the global players are expanding base in India and over 70% of NEI’s sales are through OEMs.
On lightweighting, there are 2-3 types of hubs that can be done which are of cast iron and steel which are heavier. But to reduce weight, this can be shifted to aluminium. In the North American market, 90% of the hubs used are made of aluminium whereas in India cast iron hubs still dominate the centre stage because there the road conditions and duty cycles are completely different from the foreign markets.
Taparia added, “One of the major problems that we face here in India is of overloading which makes the OEMs still skeptical about adopting aluminium. There are no safety issues involved as it is very much in demand in the international markets. As the Indian government is putting in more stringent laws, with the new norms coming in for CV industry and overloading being restricted, I think then it will become more likely for the industry to shift over to aluminium based hubs. Close to 15-20% of the weight of the total assembly of the hub can be reduced if aluminium based hubs are used instead of cast iron hubs, which ultimately lead to fuel efficiency.”
With the expansion, NEI expects to grow by 12% in the coming year. Last year it grew at a rate of 9%. It was the highest growth rate in the bearing industry. The automotive manufacturers and railways account for 60% of the total revenue of NEI. The aftermarket and exports stand at 20% each. The company plans to go in a big way to the semi-urban and rural areas to supply NBC Bearings.
