"THE new units will come close to the existing one as it will help save logistics costs. " L Ramkumar Managing director, TII

TUBE Investments of India (TII), flagship firm of $3.8 billion Murugappa group, is embarking on a Rs 600 crore expansion drive under which it seeks to establish at least four greenfield projects for its three business segments across the country in view of the favourable market outlook.

The 60 year old firm, which is engaged in manufacture of cycles and electric scooters, engineering and metal formed products, intends to set up green field units in south, north and eastern region for its tube, chain and cycles businesses. It has already 15 manufacturing operations across the country.

As part of the expansion plan, TII proposes to ramp up the capacity of tubes due to growing demand in auto and infrastructure sectors.

While it intends to establish a new unit in Punjab to cater to the automotive sector in the northern region, it will be setting up a new plant in south India, possibly near Chennai.

“We already have a plant in Mohali, this new unit will come close to the existing one as it will help save on logistics costs. We have been supplying from our unit in south to the increased demand in northern region,“ L Ramkumar, managing director, TII told FC. The company is the market leader in precision tubes with 50 per cent share.

The Rs 2,966 crore company will also expand the capacity of its chain production as it is running at full capacity across three locations — Chennai, Haridwar and Hyderabad. The new unit is to come up in the southern region.

TII is the second largest producer of bicycles in India with annual sales volumes of about four million units. In 2010-11, the bicycle and e-scooters business division achieved Rs 1,000 crore turnover mark. With growing demand in the eastern region, the company intends to build a new greenfield unit in the region.

“We have shortlisted sites for all the greenfield units and hope to finalise the plans over the next two months,” Ramkumar said.