Kolkata, Aug 7 (IANS): The diversified $1.7 billion Ruia Group is betting big on the auto ancillaries industry, especially in the sealing business, with a spate of overseas buyouts and domestic investment, with Africa now the focus area for the future.
The group, which has brands like Dunpop, Falcon and Jessop in its kitty, is setting up a Greenfield unit for automotive sealing at Pune on a six-acre plot with an investment of Rs.110 crore and has planned another at Gurgaon on the outskirts of the capital.
"Since our tyre business was matching well with the sealing systems sector, we had good understanding, and so we thought it would be best for us," Ruia Group chairman Pawan K. Ruia told IANS in an interview here.
"When we become the global leader in this field we will have 22-23 percent share in the international market. Once the Pune plant starts production -- some time around May-June next year -- we will have six sealing companies worldwide under our belt," he said.
"Africa certainly is in focus. Our group is certainly going to spend a major amount of money in Africa across industries. We have major plans there and very actively involved in negotiations. Africa as a continent is exploding, and will explode further."
During the past three years, the group has acquired five European sealing companies, starting with Schlegel Automotive of Britain in 2008. Germany's Draftex Automotive followed next year.
In the first week of May, Ruias took over Sealynx Automotive of France and entered into a binding agreement to acquire the Turkey-based Standard Profil and Germany's Meteror Gummiwerke, the chairman explained.
"Once the transaction for the Turkish and German companies are completed, our Group's turnover from this segment will be $850 million, making us the largest players in the European market with an 18-percent global share in auto sealing systems market."
Ruia said Standard Profil, with its plants in Turkey, Bulgaria and South Africa, was the pick of the lot in terms of both price and prestige. He, however, declined to give out the price tag for this acquisition till the transaction was completed.
Asked why this major foray into the sealing system, Ruia said apart from good understanding of the auto ancillary industry, the company saw major opportunities after it entered the European market.
"After acquiring our first plant in Britain we started looking at increasing the volume. So we kept our eyes open on each and every opportunity and, fortunately for us, one after another companies started coming in," he said.
The company is an expert at acquisitions. The group ventured into the tyre industry in 2005 by acquiring Dunlop India and Falcon Tyres. Then in 2007, it bought Mumbai-based Monotona Tyres and a controlling stake in Malaysian electronics major Industronics.
"Certainly we are looking at more opportunities in sealing systems. We will acquire more companies, consolidate and take our position to the top globally," said Ruia, adding the modest turnover target for the group as a whole was $2.5 billion next year.