-Rasika R SalodkarSIMSREE (MMS)

(2014-16)

FORGING PROCESS

Forging is a manufacturing process involving the shaping of metal using localized compressive forces. A metal is shaped by compressive forces.

Types of Forging:

1. Open-Die Forging

2. Impression-Die & Closed-Die Forging

Forging Industry in India

The Indian Forging Industry has emerged as a major contributor to the manufacturing sector of the Indian Economy. Briefly, it is categorized into four sectors- large, medium, small and tiny.

The industry was previously more labour intensive but now with increasing globalization it is becoming more capital intensive.

Total investment in the large and medium sectors is US$600 million

Most of them are suppliers to Original Equipment Manufacturers (OEMs) in the automobile sectors

Industry’s major markets are USA, Europe and China

Bharat Forge : India’s No. 1 Forging Company

Bharat Forge Limited (BFL) is a technology driven global leader in metal forming having transcontinental presence

• Part of Kalyani Group• A USD 2.5 billion conglomerate• Global work force of 10,000• It has repository of metallurgical knowledge in the region• Offers full service supply capability to its geographically dispersed marquee customers from concept to product design, engineering, manufacturing, testing and validation.• World's largest forging company with manufacturing facilities spread across India, Germany and Sweden

Company Information

Founded in: 1961

Founded by: Nilkanthrao Kalyani

Businesses:

I) AUTOMOTIVE (main): Passenger Vehicles, Commercial Vehicles, SUV

II) INDUSTRIAL: Power , Oil & Gas, Locomotive & Marine, Aerospace, Metals & Mining, Construction, General Engineering

Top Management

• B N Kalyani - Chairman & Managing Director,

• G K Agarwal - Deputy Managing Director

• Amit B Kalyani - Executive Director

• B P Kalyani - Executive Director

• S E Tandale - Executive Director

• Sunil K Chaturvedi - Non Executive Director

Location of Headquarters

IndiaPune CantonmentMundhwaPune - 411 036INDIAEmail: info@bharatforge.com

Bharat Forge America2807 South Martin Luther King Jr. BlvdLansing, MI 48910

Bharat Forge Kilsta ABP.O. Box 428, SE-69127 Karskoga,Sweden

Plant Locations over the global

1. Ennepetal, Germany

2. Saxler, Germany

3. Brand-Erbisdorf, Germany

4. Bharat Forge Scottish Stampings Limited, Scotland

5. FAW Bharat Forge (Changchun) Company Ltd, China

Core Objectives of the Company

To be committed to listening and responding to the needs of our customers, associates and business partners and honouring their individual value

To be committed to an entrepreneurial spirit that fuels the growth of our companies and increases shareholder value

Shareholding Pattern

The equity shares of the Company has a face value of Rs. 2 each.

42%

9%10%

12%

12%

6% 9%

Shareholders

Promoters

Individuals

FIIs

Banks, Fis,Insurancs Cos.

Corporate Bodies

Financial Performance

Income statement: (In Rs Cr)

STANDALONE March 2014

Net Sales 903.72

Other Income 32.60

PBDIT 275.26

Net Profit 118.98

Performance compared to main peers

Company

Name

Market

Cap

Price

29.07.1

4

Total

assets

Net Sales Net

Profit

Bharat Forge 16541.66 944.00 3743.09 3399.27 399.93

Mahindra CIE 1467.84 159.00 159.00 932.62 440.36

Jayasawal

Neco

1047.61 18.30 4024.64 2549.24 28.66

Electrosteel 1045.88 29.40 4312.22 1934.55 97.23

Ahmednagar

Forge

1034.33 275.00 2894.03 1718.49 173.29

Noteworthy Points about BFL

98 percent growth in net profit

Revenues grew 23.7 percent year-on-year in the quarter ended December 2013

Continues to do well despite the domestic slowdown because of its diversified product mix and strategic entry into the non-automotive sectors

Earnings shot up 50.7 percent to Rs 214 crores

Company's shipping tonnage jumped 14 percent to 42,702 tonne in Q3FY14

SWOT Analysis

Strengths:

1. High Economies of scale

2. Strong and trusted Brands

3. Technology and manpower cost advantage

Weaknesses:

1. Over-dependence on Automobile segment

2. Lack of in-house R&D

Less focus on small forging equipments

SWOT Analysis

Opportunities:

1. High demand in automobile industry

2. Demand in Nuclear, Power and Refinery sectors

3. Access to better technology & work practices across globe

Threats:

1. Rising input costs, particularly steel & electrical power.

2. Demand for new products, especially from foreign OEM’s

which may not match by Economic Order Quantity.

Products of BFL

capabilities to manufacture complex forgings out of both steel and aluminium are a unique feature of BFL‘s competitiveness.

Automotive components

Chassis components

Manufacturing facilities

Safety and critical components for passenger cars, commercial vehicles and diesel engines

Specialized components for railways

Construction equipments

Facilities

World-class design and engineering capabilities Forging facilitiesBest-in-class machining facilities Rigorous inspection and testingLargest single location forging facility in the worldModern forging facilities include over 29 state-of-the-art fully automated press lines ranging from 1600 MT to 16000 MTState-of-the-art machining facility is the largest of its kind and has a crankshaft machining capacity of 650,000 units per annumDesign and EngineeringTool and Die ManufacturingHeat TreatmentProcessing andInspection and Testing

Customers

Its customer base includes virtually every global automotive OEM and Tier I supplier. Daimler Chrysler, Toyota, BMW, General Motors, Volkswagen, Audi, Renault, Ford, Volvo, Caterpillar -Perkins, Iveco, Arvin Meritor, Detroit Diesel, Cummins, Dana Corporation, Honda, Scania and several others source their complex forging requirements including machined crankshafts, front axle beams and steering knuckles from Bharat Forge

Strategies

The US $2.4 billion giant ventured into the Indian energy market in 2011 to become a leading supplier of generation equipment for thermal and nuclear power plantsThe power sector provided the perfect opportunity to Bharat Forge as the nation embarked on an ambitious plan to add 78,000 Mw in the 11th planBharat Forge, along with its Joint Venture partner Alstom, is setting up a manufacturing base in Mundra with an investment of Rs 1,500 croreThe company has also Joint Ventured with David Brown Systems for opportunities in the heavy engineering sectorBharat Forge is also partnering French nuclear giant Areva for the heavy forgings required for erecting nuclear power plants. The proposed facility will have a state-of-the-art 14,000 tonne open-dye forging press and will be operational by end of 2012The company formed a JV in 2010 with Pune-based technology firm KPIT Cummins to offer low-cost hybrid solutions for the auto industry and automobile owners

BFL is presently focused on creating a position of Global Leadership in the Engine & Chassis components for Passenger Cars and Commercial Vehicles. The company has therefore embarked upon a three-pronged strategy to offer the customers :

Dual Shore Design capabilityDual Shore Forging manufacturing capabilityDual Shore machining capability

Awards and Recognitions

SWORD OF HONOUR for safety success by the British Safety Council for our Health & Safety Management Systems

FIVE STAR RATING by The British Safety Council, UK. The award aims to recognise the 'best of the best' in health and safety management

Mr. Baba Kalyani, Chairman and Managing Director, Bharat Forge Limited was today, conferred with the prestigious LAKSHYA BUSINESS VISIONARY AWARD by the National Institute of Industrial Engineering (NITIE)

B. N. Kalyani, CMD, BFL was honoured with the CROSS OF THE ORDER OF MERIT of the Federal Republic of Germany

The French government has bestowed the award of KNIGHT OF THE NATIONAL ORDER OF THE LEGION OF HONOUR (CHEVALIER DE L’ORDRE DE LA LÉGION D’HONNEUR) on Baba Kalyani, CMD, BFL

Certifications

ISO 9001: 2008 CERTIFICATIONISO 9001: 2008 certification for Mundhwa, Baramati and

Chakan Plants.ISO/TS 16949: 2009ISO/TS 16949: 2009 - MundhwaISO/TS 16949: 2009 - ChakanISO/TS 16949: 2009 - BaramatiAS 9100 C : 2009-01 EN9100:2009 JIS Q9100:2009AS 9100 C : 2009-01 EN9100:2009 JIS Q9100:2009 -

MundhwaAS 9100 C : 2009-01 EN9100:2009 JIS Q9100:2009 - BaramatiEC CERTIFICATE OF QUALITY SYSTEM APPROVALEC Certificate of Quality System Approval

Sustainabilty

BFL FOCUSES ON VARIOUS INITIATIVES LIKE:Use of bio fuels aimed at minimizing energy consumption at all of its plantsAdoption of modern regenerative combustion technology to reduce fuel consumptionUse of recycled water from effluent treatment plant for maintenance of greenery in the Plant.Implementation of rain water harvestingReduced cycle waste & adoption of eco-friendly waste disposalImplementation of scientific tree plantation to reduce atmospheric pollution

Corporate Social Responsibilty

Pratham Pune Education Foundation (PPEF)

LAKSHYA (Looking at Knowledge in Sports and Help Youth Achieve)

Tie ups with BITS, Pilani, Warwick University and IIT Bombay

Kalyani Centre for Technology and Innovation (KCTI), which addresses the group's requirements of augmenting employee knowledge and skills through three areas namely Advanced Technical training, Advanced Academic Courses and Research and Development

R&D: Present and Future

R&D Activities at KCTI comprises of: Modeling for prediction of micro structure, cost reduction, controlling residual stresses, development of new heat treatment processes like plasma nitriding, development of quench media, FATT improvement, fatigue life improvement, structure property correlation vis-a-vis creep behavior/stress rupture behavior, machining characteristics of rare-earth & other micro alloyed Ti6AI 4V materials, development of eco friendly lubricant solution for performance improvement of various machining processes, work on improvement of 34CrNiMo6 Alloy Steel, HSLA steel etc, CBN grinding process of steel forgings, development of aerospace components and their processing, work on titanium alloys etc

Referneces

1. Company website (www.bharatforge.com)

2. www.moneycontrol.com

3. www.bseindia.com

4. www.mbaskool.com

5. www.forgingmagazine.com