F L Smidth to invest Rs 50 cr in India

F L Smidth India, the wholly-owned Indian subsidiary of the $1.4 billion Denmark-based F L Smidth Group, is planning to invest Rs 50 crore on its expansion plan to move to a larger facility in Chennai as the company is expected to become a strong back-end office for its parent.

F L Smidth Group is a worldwide provider of technology, equipment and plants to the cement and mineral processing industry.

F L Smidth India group companies include F L Smidth, FFE Minerals and FLS Automation. F L Smidth provides cement plants, FFE Minerals addresses turnkey mineral based projects and FLS Automation does automation for both mineral and cement projects.

Rudy M Edge, managing director and CEO, FFE Minerals, told Business Standard that as the parent company was expanding globally, it preferred to outsource to its Indian subsidiary to remain price competitive.

"To support its global operations, our parent company has been outsourcing jobs such as project management, financial data processing site supervision, enquiry processing and project execution documentation for the last six months," she said.

The large number of skilled employees available at competitive wage in Chennai is one of reasons cited for the offsourcing. The number of work hours to be outsourced in value terms is expected grow to about Rs 200 crore (Rs 2 billion) in the next two years time, he added. Over the last two years the Indian subsidiary has been already doing engineering designs for its global operations.

S K Dan, vice president-marketing, FFE Minerals said that the Indian group plans to ramp up its employee strength to 2,000 from 600 for which we have decided to purchase an eight-acre property along the information technology corridor (old Mahabalipuram road). The board of directors will decided on the proposal of expansion in the meeting to be held in the second week of December.

The larger facility will have built-up space of 2 lakh sq ft and house F L Smidth India group companies.

FL Smidth India group expects a turnover of Rs 300 crore (Rs 3 billion) to close its financial year by December 31, 2004 and expects to double its turnover by the end of December 2006, the FFE Minerals India is expected to account for nearly 60 -70 per cent of the turnover.