Solapur-based Precision Camshaft Limited, a leading manufacturer of camshafts for the automotive industry, has recently been in the news for its acquisition of two companies that will help it generate a bigger footprint across the globe. The company is headed by Yatin Shah, Chairman and Managing Director. Huned Contractor reports
Precision Camshaft Limited is one of the world’s leading manufacturer and supplier of camshafts, a critical engine component, in the passenger vehicle segment, based on estimated global market share by volume according to the ICRA research report. It supplies over 150 varieties of camshafts for passenger vehicles, tractors, light commercial vehicles and locomotive engine applications from its manufacturing facilities in Solapur, Maharashtra. The company was set up in 1992 by first generation entrepreneurs Yatin Shah and Dr. Suhasini Shah, who have over 20 years of experience in the critical engine component manufacturing sector. Over the years the company has established strong business relationships with marquee global OEMs.
A majority of its revenue comes from export of camshafts to various OEMs directly and indirectly. The company has a long-term relationship with several global OEMs such as General Motors, Ford Motors, Hyundai, Maruti Suzuki, Tata Motors and Mahindra and Mahindra. It has supplied more than 60 million units of camshafts over about ten fiscals and has serviced various customers across different geographies including the United States of America, Brazil, the United Kingdom, Germany, Austria, Hungary, Russia, South Korea, China and India.
Manufacturing Infrastructure
Precision Camshaft Limited has two state-of-the-art manufacturing facilities – an EOU unit and a domestic unit – both situated at Solapur. The EOU unit consists of four foundries and two machine shops and products manufactured at the EOU unit are primarily exported to its overseas customers. The domestic unit consists of one foundry and one machine shop and caters to its domestic customers from this manufacturing facility. The EOU unit of PCL has four foundries and one foundry at the domestic unit. The total manufacturing capacity is 13.38 million camshaft castings per annum. PCL has state-of-the-art machine shops which enables it to achieve standards agreed upon with its customers. It specialises in 3 and 4 cylinder chilled iron camshafts, with machining capacity to produce over 2.22 million camshafts annually. PCL also has the capability to manufacture fully machined camshafts as per customer requirement for locomotive application made out of rolled steel bar route.
Joint Ventures
In order to strengthen business operations in Asia, PCL has entered into two joint ventures with NSPCL, the first, Ningbo Shenglong PCL Camshafts Company Limited, for machining of camshafts and the second, PCL Shenglong (Huzhou) Specialised Casting Company Limited, for setting up a foundry in China. The machine shop at Ningbo, China commenced production in April 2013.
Technology and Innovation
PCL continues to invest in technologies, designing capabilities and research and development activities. The company uses different technologies for engineering and manufacturing operations, including shell sand molding process technology, special AI203 ceramic sand care technology and GBQII process technology which gives it a cost-competitive advantage among competitors. It also has a dedicated design and development team of engineers along with a well-equipped inspection laboratory and a calibration laboratory. The company has also entered into an exclusive agreement with EMAG, a German machining and tooling process company, for transfer of certain knowhow and technology in order to strengthen its foray into assembled camshafts and expand business operations in the European market.
Acquisition of MEMCO
PCL acquired Nashik-based precision component maker MEMCO Engineering last year so that the synergy would help it further strengthen its industry leadership and diversify into a new product range. MEMCO is a financially strong company with an annual growth rate of 18.5% over the past four years and has the capacity to produce 10.7 million precision components. MEMCO’s key products include fuel injection components for conventional and CRDi diesel engines, brake components, high-pressure diesel injector connectors for naval ships and high-precision instrumentation components.
Footprint in Germany
In March this year, PCL announced its second acquisition with the taking over of German precision machinist MFT Motoren und Fahrzeugtechnik GmbH (MFT) through its wholly owned Dutch subsidiary, PCL (International) Holding. This acquisition is value-accretive which will open up synergetic opportunities for the company through new product offerings and will establish a global brand presence. MFT will not only complement its relationships with current OEMs in that region but will also help in enhancing its customer base. With MEMCO and MFT on board, PCL is gradually progressing towards attaining its goal of transforming the business profile, while the key focus area continues to be its legacy business. MFT enjoys long-term relationships with marquee global customers like Volkswagen, Audi, Opel, Westfalia, Hatz, Suzuki, etc.
MFT’s key products include balancer shafts, camshafts, bearing caps, engine brackets and several non-engine prismatic components. Located close to the Polish and Czech border, MFT manufacturers critical components in its state-of-the-art and cost-competitive manufacturing environment. The dynamic and young team led by Guido Glinski has in-depth knowledge of machining and is committed to growing the company. This move will also help MFT expand its global footprint. It will allow them to get better access to the development departments of the German and European car manufactures. This will enable them to actively shape the disruptive changes in the automotive industry and prepare themselves for the challenges in the future development of the conventional powertrain and become part of the alternative drivetrain technologies.
Acquisition of EMOSS Mobile Systems Netherlands
PCL has recently acquired 51% equity shares of EMOSS Mobile Systems Netherlands for Rs 58 crore. The acquisition will pave the way to mature electrical mobility markets such as Europe, North America and Australia. The electric vehicle market has grown significantly over the past decade with a special emphasis on the commercial electric and niche services segment. PCL with its experience in delivering top-of-class products to customers across its global network will leverage this advantage to the EMOSS business as well. PCL is looking at capturing a significant share of the commercial electric vehicle market globally.
New Contracts
In the recent past, PCL has won a global contract from General Motors with aggregate value of Rs 580 crore over the lifetime and a global contract from Ford Motors with an aggregate value of Rs 550 crore. Both programs are on track and will start serial production in FY18-19. In addition to this, PCL has been recently awarded with new contracts for fully machined camshafts from Ford, General Motors, and Mahindra and Mahindra with aggregate value of Rs 275 crore over lifetime.
