Business Daily from THE HINDU group of publications
Thursday, Sep 10, 2009
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Business Daily from THE HINDU group of publications Thursday, Sep 10, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Corporate
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Performance Sundram Fasteners China arm working at 50% capacity Global recession and a strong Remnimbi have delayed Sundram Fasteners achieving breakeven in its China operations. T. Murrali Chennai, Sept. 9 Due to the recession, Sundram Fasteners (Zhejiang) Ltd is today working at half its capacity, sources in the company told Business Line. China is not only the first major overseas foray of Sundram Fasteners, but has also consumed the highest investments – Rs 56.87 crore ($13 million) including the Rs 8 crore put in last year. Global recession and a strong Remnimbi have delayed Sundram Fasteners achieving breakeven in its China operations. If the recession came in the way of the company passing on increases in steel prices to customers, the strong Chinese currency affected exports out of China. When the company commenced its operations in 2005, a dollar was worth 8.29 Renminbi. Today, a dollar is RMB 6.85. Sources in Sundram Fasteners said the going was good for the company in the first 10 months. However, the drop in sales in the remaining months eroded the profits and even lowered its cash profit 29 per cent to Rs 1.86 crore in 2008 from Rs 2.63 crore in the previous year. Currently, the company manufactures high tensile fasteners and bearing housings and supplies to overseas customers and few multinational companies operating out of China. More Stories on : Performance | Overseas Investments | Automobile Components
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