By Stanley Opara

Tuesday, 18 Jan 2011

THE Cummins Group is exploring opportunities to invest about $75m in Africa over the next five years to build engines used in sectors such as mining, power generation and oil and gas.

The countries where the company intended to invest include Egypt, Angola, Nigeria, Morocco and South Africa, Reuters quoted the firm‘s Chief Executive, Mr. Tim Solso, as saying.

According to him, last year, the group spent about $620m on capacity expansion globally and expected the investment to boost its sales in the current year.

”We had a turnover of $13bn last year globally, and it would rise by 15 per cent to 20 per cent,” he added.

In a related development, the United States engine maker aimed to more than triple its investment in India to $500m by 2015, as it introduced at least five new business segments, a top official of the company said.

The company, which manufactures truck engines, power generation equipment and other vehicle components, plans to increase its investment in India from a total of $150m allocated so far, Solso said.

The new projects could include manufacturing of high-pressure fuel systems, 2.8 to 3.8-litre diesel engines for commercial vehicles and emission solutions, the Cummins boss added.

The Columbus, Indiana-based group, which runs about 10 entities, including Cummins India, said it had so far spent 5 billion rupees ($110.2m) of the allocated amount for its manufacturing site in Phaltan, near Pune.

The site includes manufacturing units for diesel and gas engines, power generators and redevelopment of existing engines, it said.

”Historically, we have been spending $40m a year (in India) but we are well above $100m this year. That gives you some idea about the company‘s expansion,” Solso added.

Cummins, which currently gets about half of its domestic revenue from supplying the power generation industry, has also started a project in China to build 2.8-3.8 litre diesel engines meant for trucks and vans.

Solso said the company would take ”less than a year” to evaluate whether these engines can be made in India.

By 2015, the group sees India‘s contribution to its global business rising to 15 per cent from the current 10 per cent and exports from India rising to 40 per cent from 30 per cent, he explained.

”With the domestic market growing so fast, we haven‘t been able to export much. With the increased capacity, India will become a much larger exports market for us,” Solso said.

 

Source: Punch