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Pratim Ranjan Bose

Kolkata , Nov. 20

AMARA Raja Batteries Ltd (ARBL) is weighing the advantages of a multi-facility production model so as to be closer to the customer.

While stressing the benefits it has been able to generate so far by operating from a single facility in Tirupati, the ARBL Managing Director, Mr Jayadev Galla, says that the company is open to such multi-facility production possibilities in the face of increasing business opportunities, especially in northern India.

After having bagged an OE (original equipment) contract for one-lakh batteries (to be supplied in one year) from Maruti a month ago, ARBL is expecting the share of the automotive sector in its total business to increase this year.

Maruti previously sourced its entire battery requirement from Exide.

ARBL is currently the exclusive OE supplier to Ford, DaimlerChrysler and Swaraj Mazda. This apart, the company is also one of the suppliers to Ashok Leyland, Fiat, General Motors, Hindustan Motors, Honda, Mahindra & Mahindra and Telco.

The Maruti requirement, which will consume 10 per cent of the company's existing capacity of one million batteries, is definitely one of the major automotive contracts the company has won so far.

Asked whether servicing such a large OE contract from its facility in the South would necessarily enhance the logistics costs for ARBL, especially in regard to the fact that Maruti maintains zero inventory level and wants "just-in-time" delivery, Mr Galla said that the end benefit would depend on the logistics cost of importing lead to the manufacturing facility and the cost of delivery to the consumers' factory.

"There is always a trade off between outbound and inbound freight. While being closer to customers would have an advantage, this need not necessarily reduce logistics costs,'' he said.

More Stories on : Outlook | Automobile Components

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