A.T.E. Enterprises has concluded an agreement to acquire the textile machinery component business from SKF India Ltd. The textile machinery components manufactured by SKF include high-speed spindles, drafting systems and top rollers for ring frames and speed frames. The transaction is expected to be completed in the first quarter of 2012.
A.T.E., a diversified engineering group, is a leader in textile engineering with state-of-the-art manufacturing joint ventures, as well as representation of 50+ world class principals. A.T.E. has been looking for opportunities to further consolidate its business in this field, whereby it can leverage its experience and expertise built over more than 70 years.
Under the agreement, the manufacturing operation will be shifted to A.T.E.’s new state-of-the art set-up in Ahmedabad, for which building construction is in full swing. Key personnel from different functions will also be transferred to A.T.E. which has commenced recruitment of the remaining personnel.
Explaining the planned acquisition, Mr. Anuj Bhagwati, Managing Director of A.T.E., said: “Our decision to invest in this business comes after careful due diligence. SKF is a technology leader and A.T.E. has the domain expertise to leverage its textile technology platform. We are excited about this business coming under the A.T.E. umbrella, as it is consistent with A.T.E.’s vision to have only technologically superior products. We see great potential for this business both in India and the world”.
In an interview to Textile Magazine, Mr. AnujBhagwati spoke in detail of the acquisition and its implications.
Textile Magazine: Is this acquisition restricted only to the Indian market or will it have global implication in terms of manufacturing and supplies?
Anuj Bhagwati: SKF India will be transferring the complete knowhow and equipment to A.T.E. Once the transfer is completed, A.T.E. is free to sell the products in other markets as well. We are also free to set up manufacturing facilities in other countries if we want to do so. However, we do not have any such plan as of now. The main market for SKF India has so far been India. We expect that India will remain a major market for A.T.E. as well, though we will also be searching for export sales shortly.
TM: When will you start commercial production at your plant in Ahmedabad?
AB: We expect to start sales by around January 2012 using the stock transferred from SKF. We expect to start commercial production by around April 2012.
TM: Are you transferring the entire production line from SKF? Is there further addition of new machinery and production lines?
AB: Yes, we will be transferring the entire production base for textile components from SKF. We will examine fresh investments after the transfer is completed and all equipment is commissioned.
TM: What will be the total capacity manufacturing capacity?
AB: The annual plant capacity of the SKF Textile Business Unit on three-shift working basis for Top arms for ring frames is 480,000 units, Top arms for speed frames is 144,000 units, Top rollers is 12, 00,000 and Spindle inserts is 18, 00,000 units
TM: Does this move signify the group’s intention to move towards manufacturing? Are you looking for more such opportunities in the future?
AB: A.T.E. has been involved in manufacturing for several decades, especially in textile engineering. In the past few years, we have invested in product development and manufacturing primarily in the clean tech area. We are open to investment opportunities in the areas of textile engineering, clean tech, and print and packing.
TM: Will this involve transfer of technology?
AB: Yes, the technology for textile-related products will be completely transferred by SKF to A.T.E. SKF will handhold A.T.E. during the entire process and for several months after start of commercial production, so that A.T.E. becomes fully independent.
TM: How do you see this acquisition contributing or adding value to the overall business of A.T.E. Group?
AB: Worldwide, there is a huge installed base of ring frames and speed frames. Their productive life and also the product quality can be significantly enhanced through the use of quality components. From our presence in the market, we feel our customers would welcome a committed partner making quality components.
Therefore, we are confident we will add value for them and consequently for A.T.E. We will in the long term also be investing in building-up new and complementary components to our portfolio through research, product development and partnerships.