German group invests Rs 66 cr in Ebm-NADI second unit

CHENNAI: Global slowdown has not cast its shadow on the investment plans of the Euro 1.1 billion German industrial fan manufacturer ebm-Papst. It has invested Rs 66 crore at its second plant in Chennai, spread over four acres, which has been commissioned.

Operating in India through its joint venture ebm-Nadi since 1996, the senior officials of company are upbeat on the prospects in the domestic market.

"The investment decision was made much before the global recession as we felt it was right time to grow in India. We feel the sleeping giant (the country) is now awake," ebm Papst group of companies founder-chairman Gerhard Sturm said, noting the industrial fan market has a good future.

For ebm-Nadi, wind, solar energy, cold storage and pharma clean room are emerging interest areas. "We are optimistic on our investments as the growth in the last few years have been tremendous. Even if it can���t be continued, we are confident of maintaining it," he told ET here on Thursday.

Aiming to double group turnover by 2015, he said a challenge that he foresees for the Indian market is its ability to withstand competition from China and Far East. Dubai and neighbouring countries are emerging markets, he added.
Over the next two years, ebm-Nadi is targeting Euro 1 million through exports, ebm-Papst MD and global sales and marketing director Thomas Borst said.

In the past, ebm-Nadi has overshot its turnover projections but given the current market scenario, it has scaled down its revenue targets to Rs 107 crore for March 2009. "We expect to touch Rs 135 crore in March 2010 and double thereon in five years," ebm-Nadi MD J B Kamdar said, noting that energy-saving devices had enormous potential.

Currently, telecom drives 60% of its sales but the domestic market offers scope for the use of specialised fans. "It is our ability to deliver fans at short notice with various options. We can offer customised solutions and there is also value-addition," he said.

While the new unit, on 10,000 sq m, would import raw material to manufacture the end product, the old unit would focus on customisation. The new plant has a capacity to produce 1500 fans a day on a three-shift basis. Initially, it would operate on two shifts and then scale up based on market needs.

"We also have our second floor infrastructure ready to expand. It would take us only three months to start production," Mr Kamdar said, adding the new plant would employ 200 people.

The Chinese products of ebm-Nadi are cheaper by 35% compared to fans produced in India but customers are willing to bear a cost differential of 15% to 20% on account of the quality factor, he noted.