Lumax to invest Rs 300 crore in tech, expansion & likely Gujarat plant

Lumax Industries, one of India’s leading suppliers of auto lighting equipment, plans to invest Rs 300 crore over a five-year period that includes investment in technology and for expansion at its existing plants and a likely future Gujarat facility, said Deepak Jain, managing director. He was speaking at the 25^th anniversary of the company’s listing on the Bombay Stock Exchange.

Jain said investments in technology will be about Rs 100 crore and the company has made a start with Rs 25 crore. Over the past two years, the company has invested Rs 160 crore in its Bawal and Bangalore plants and is geared up for increased business from Maruti Suzuki, Honda Cars India and two-wheeler business. In the South, the company has added Toyota Kirloskar Motor as one of its newest customers. The company has a strong order book for commercial vehicles, added Jain.

Going forward, the company plans to look proactively at streamlining its operations. “We will be selective, screening our customers and may even block capacities for our customers. Over the long term, we will look strategically at our portfolio based on a variety of factors including the competition, global alliances and profitability.”

Lumax, which has nine plants, recorded a sales turnover of Rs 1,116 crore in fiscal 2013-14 registering a growth of 4.34 percent. Jain said that four percent of its business comes from overseas business which includes OE customers such as Audi, Jaguar Land Rover, Case New Holland and Nissan.

Lumax Industries hopes to fund its expansion plans via internal accruals, as of now, and take less debt on the balance sheet, said Jain. “We want to an asset-light company in the medium term; we have been doing things internally and may consider outsourcing some of our production.”  

Looking back at 30 years, chairman D K Jain in his opening remarks said the company has grown from a trading house to a partnership and a joint venture with Stanley, one of the world’s well-known auto lighting majors. The company supports around 700 suppliers at present. Its staff strength has grown over the last 30 years from 50 employees to 5,000.