Nipman Fastener Industries (NFIL) is all set to diversify and move to its next phase of growth.
18 May 2015 | 7321 Views | By Shobha Mathur
Nipman Fastener Industries (NFIL) is all set to diversify and move to its next phase of growth. The company is inking a technical collaboration on May 20 with South Korean company, IL Ryung Co Ltd that manufactures power steering systems. The agreement will signal Nipman’s foray into steering components and ...
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Nipman Fastener Industries (NFIL) is all set to diversify and move to its next phase of growth. The company is inking a technical collaboration on May 20 with South Korean company, IL Ryung Co Ltd that manufactures power steering systems. The agreement will signal Nipman’s foray into steering components and systems from the fastener business.
While this association kicks off with a technical agreement, it leaves room for more, according to Pravin Malhotra, chairman and managing director of Nipman. The 10-year agreement between the two companies is likely to evolve into a joint venture over a period of time as the confidence between the two partners builds up.
IL Ryung makes steering systems for Mando, also a South Korean Tier 1 supplier that in turn supplies to Korean carmaker Hyundai, both in India and worldwide. Mando also has a joint venture with the Anand Group in India for making brakes and shock absorbers for Hyundai Motor India.
The design, engineering capabilities and efficient manufacturing systems of IL Ryung are what attracted Nipman to IL Ryung. Last May, Nipman and IL Ryung Co inked an MoU based with teams from both sides interacting closely during the interregnum and undertaking a SWOT analysis of each others’ companies. This exercise will now culminate into a technical agreement.
Interestingly, IL Ryung also started as a fastener company many years ago and has similar aspirations of growth as its Indian counterpart, Nipman. With this, the Delhi-based supplier is progressing into cold forged and machined components.
“For a long time, we have been looking at developing many verticals as a strategy to take Nipman ahead and one of them is steering systems,” confirms Malhotra. “The collaboration is not only about components but sub-assemblies as well. Steering systems have many sub-assemblies to them.”
Also read: Nipman Fastener's fortunes set to brighten up with Renault XBA
Fasteners are developed through cold forgings, so moving to cold forged and machined components and sub-assemblies is a natural corollary thereof.
The association with IL Ryung will also facilitate Nipman to look at Hyundai and beyond – at Maruti Suzuki as a prospective customer as it builds its four-wheeler base further on the Renault-Nissan Alliance. Autocar Professional had, on May 15, reported that Nipman had bagged the fastener supply business for the upcoming Renault XBA which is to be launched on May 20.
An in-depth study of the market of the past year has pegged the India automotive market to have spiralling opportunities for component makers over the next 4-5 years as India jostles for space with China which is estimated to reach a production of 30 million cars by then, up from the current 22 million. India is still at about 3 million cars annually and visualises huge growth potential going forward.
“We are looking at the sub-continent without committing to any one customer at the moment. At present IL Ryung supplies from Korea to Hyundai but once we set up our processes for Hyundai here and Hyundai approves us and our products, we can supply to them,” adds Malhotra. This procedure is expected to take a year. Supplies from the Korea supplier can then be discontinued.
An offshoot of the new collaboration will be separate manufacturing facilities for the new product line with one facility slated to come up in north India and another in south India, based on customer requirements. In addition, steering systems will also be supplied to Tier 1s who in turn will add electricals and additional components to enable the final assembly for the OEM.