Caparo's expansive growth: from steel to brakes, from components to composites, the Caparo Group is undergoing extensive growth--and change.
The company was founded in 1968 by Angad's father, Swraj Paul. The senior Paul was born in Jalandhar, India in 1931 (where his father ran a small foundry), was educated at the Punjab University, and later obtained a Master's degree in mechanical engineering from MIT. He moved to the UK in 1966 in the hope of finding a cure for his leukemia-stricken two-year-old daughter, Ambika, but shattered by her death, he buried himself in work there and began his spectacular business career in the UK. In 1968, he started buying and selling steel in a one-man business and acquired a small tube unit, Natural Gas Tubes (NGT), which developed into one of the leading UK producers of welded steel tube and spiral welded pipe. Gradually he bought more units, mainly in the steel products manufacturing industry, founding the Caparo Group in 1978, the same year he was knighted, becoming Lord Paul of Marylebone and a member of the House of Lords. He was to head this company until 1996, when he stepped down in favor of his three sons.
"When my father asked me to take over the business that was turning over just under $700 million in 2002, one area I could see the company growing in was India," says Angad Paul. "We had a very good reputation there as a good quality producer, and I wanted to capitalize on this." He had to wait a little while before putting his plans into action, but a healthy financial year in 2004 was the starting point. By the end of 2006 the Caparo Group had brought 22 companies in the UK, created Caparo Vehicle Technologies, and began investing heavily in India where Caparo Engineering India has already established itself as a major supplier to the automotive market. Caparo also has a joint venture with Maruti Udyog, India's largest car manufacturer, for the production of body panels.
"We are trying to get UK companies that are what we call 'under-exploited assets' and cannot support the cost base they are on and replicate the skill sets in India," says Paul. "Last year we turned over around $90 million in India. In 2009 our turnover on current projects will reach around $500m. If finance allows, we may well do more which will add to both the top and bottom line. We have expanded fasteners already with production of high-tensile fasteners for automotive applications commencing in 2006 for customers that include General Motors, Swaraj Mazda and Ashok Leyland. We are also building an aluminum plant, a forging plant and a brake plant under the Caparo AP name. We might also look into gears. On a 120-acre site between Chennai and Bangalore, where all the car companies are setting up production facilities, we will have forgings, castings, composites, sheet metal, tool and die manufacture and a comprehensive R&D centre." A stampings plant was opened in 2006 that manufactures automotive pressings for an adjacent Honda factory. Additional facilities at Chennai, Halol and Pune will add to the already substantial stamping division. Also, they are looking for additional land in Chennai, where they may add fastener capacity and possibly an iron foundry, although Paul says the latter will probably end up in Pune. Caparo is also entering into a joint venture with Marubeni Itochu Steel. Caparo MISI will manufacture tailor welded blanks, the first of its kind in India, at a new plant in Bawal.
"We are now very confident that we can be a solid body-in-white and chassis supplier. We also do the components for the transmission and drivetrain. I'm not saying that we are going to be all things to all people but there is a perfectly logical progression for us at some level to make an entry into drivetrain and transmission but only if the customer demands it. What we don't want to do is anything that is at loggerheads with our customers." He adds, "The biggest change I have tried to exercise in Caparo is that when I took over, it was a manufacturer of products, but now we try to provide a service that knows how to manufacture efficiently. The reason for that is engineering companies need to be service companies in order to survive."
One part of his company that Paul is very proud of is Caparo Vehicle Technology a designer and supplier of composites and systems (see AD&P, October 2006: http://www.autofieldguide.com/columns/1006euro.html). "If nothing is done to change present trends then the average family car will soon weigh two tons ... and that is simply unsustainable," says Paul. "The point is you can reduce carbon emissions without compromising vehicle performance. Irrespective of where cars are designed, manufactured and sold--whether it's North America, Europe, India or China--our view is that the global automotive industry really has no alternative but to embrace lightweight materials technology. We're working extremely hard to establish a high-volume facility in India that will offer carbon composite solutions at costs more appropriate to series production.
"It may take 15 to 20 years before we see in the car industry the widespread use of advanced plastics and composites as an alternative to aluminum and steel, nonetheless, we have embarked on this course having recognized that vehicle light-weighting technologies provide Caparo with an excellent commercial opportunity to help carmakers reduce vehicle carbon emissions. In the end we believe we will see an increasing number of carbon composite applications in series production vehicles as material costs are driven down, something we're already seeing in low and medium volume vehicles."
William Kimberley, European Correspondent
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|Title Annotation:||Euro Auto|
|Publication:||Automotive Design & Production|
|Article Type:||Company overview|
|Date:||May 1, 2007|
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