TI Cycles Open 4th Bicycle Factory in India
RAIPURA, India – TI Cycles of India inaugurated its fourth green field facility in district Rajpura in the North Indian state of Punjab. The state-of-the-art plant has the capacity to produce 3 million units annually and is the largest among the four bike production units of TI Cycles.
“The plant has been built with an investment of approximately US$16 million (and) can be further expanded when required,” said Arun Alaggapan, President, TI Cycles of India Limited in an exclusive interview with Bike Europe.
Construction of the plant finished in a record time of only eleven months. It has the modern bake-on-bake painting technology to give a glossy finish that lasts longer, besides three painting lines with German applicators. Spread over an area of 25 acres, the unit has 2 assembly lines. The eco-friendly unit has zero discharging and 100% recycling of water. It will soon have a 350kw solar panel to feed energy to the plant.
This the second plant of the Murugappa group in Punjab, the first being in Mohali, an industrial town near Chandigarh, manufacturing tubes for applications in the auto sector. TI Cycles has in total four bike-making plants now; in Nashik (Maharashtra) with capacity of 1.2 million, Noida & Chennai with 1.8 million each, and the new Rajpura plant with 3 million units respectively.
“We continue to maintain a production level of around 4.5 million units annually,” Arun Alagappan said. TI Cycles holds a 34% share in the India bicycle market and with the new plant coming in it now plans to improve market share slightly, by 1% in ongoing fiscal of 2016-17. The plant is to focus on catering to the India market, which has experienced an upswing in last few years owing to rising vehicular congestion and rising emission levels in major cities.
Shift of Noida plant
TI would likely to shift the Noida plant to the Rajpura unit once the new plant starts functioning at its installed capacity of 250,000 units each month by 2017. Initially, the plant will manufacture 100,000 units per month.
This would be logical as it is the company’s second and larger plant in Northern India and is built on its land with scope for future expansion, whereas, the Noida plant is in rented premises and much smaller in capacity. Once the Noida production shifts to the Rajpura unit, the installed capacity would eventually settle down to 6 million units annually. However, its current cumulative capacity with the 4th plant operational reaches a whopping 7.8 million units.
Closer to suppliers
“The idea is to cater to the North and East India market from the Rajpura plant and come closer to ancillary units as well as suppliers based in Ludhiana, hardly 100km from Rajpura,” Arun explained. Trial production in the plant commenced and full scale operation will likely follow soon. The plant is projected to generate direct and indirect employment for approximately 3,000 people. It has also moved into a bigger warehouse in Howrah, which would get supplies from the Rajpura plant to serve the East India market.
Meanwhile, the Chennai-headquartered company is also improving its exports. Its export is up by around 40% in the last fiscal year.
“UK is the major market for us as we are exporting kids bikes to here. Our export is also improving on other European countris,” said Arun.
It is estimated that TI Cycles exports mainly a kids range and shipped about 60,000 units to the UK market last year. TI Cycles registered turnover of about US$222.6 million in 2015 and is targeting about US$224.4 million for this year. With the market size of foreign brands swelling in India, TI Cycles is planning to commence licensed production of some of the brands it markets in the domestic market. Recently, it launched the Ridley brand in India and South East Asia under a sales and marketing license signed during the 2015 Eurobike show. TI Cycles represents GT, Mongoose, Schwinn, Cannondale, Bianchi, and Ridley in India. The company is considering offering India-specific models from a few of the named brands.