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Leading auto ancillary player Lumax Group is investing 250 crore in capital expenditure this fiscal to set up an electronics plant at Bawal in Haryana and augment capacity at the Sanand plant in Gujarat. The Gurguram-based 2,900-crore Lumax-DK Jain Group manufactures and supplies auto components at its 33 plants.

The group has two publicly traded companies--Lumax Industries, which manufactures auto lighting solutions; and Lumax Auto Technologies that is into gear shifters, telematics, antennas, air-intake systems, plastic modules, two-wheeler chassis and lighting, and seat structures among others.

While in auto lighting it controls over 50 per cent of the market, it dominates the gear-shifters market with over 65 per cent of the market. "We have allocated 250 crore capex this fiscal, some of which is carry-forward from last fiscal because of the lockdowns," group chief executive Vineet Sahni told PTI.

The capex is primarily for a 100-crore greenfield electronics plant in Bawal in Haryana and 80-100 crore will be invested to expand capacity to 5 lakh units from 3 lakh units now at the Sanand plant in Gujarat, Sahni said, adding the work on this brownfield project had in fact started last November. The Sanand facility, commissioned in 2017, manufactures automatic electric lights including human sensor switches and bulbs for automobiles. The initial capacity was to cater to 3 lakh vehicle sets per annum with the augmented capacity it will 5 lakh vehicle sets, he said, adding the plant is close to the existing facility.

On the proposed electronics plant, Sahni said it will come up at Bawal at an investment of 100 crore and is for captive consumption only. On the overall business environment amidst the second wave of the pandemic, Sahni said the new year had started off well with order levels reaching over 90 per cent in the first half of April but since then most auto OEMs have advanced their annual maintenance shutdowns to late April-early May to align with the lockdowns.

So it needs to be seen how long the lockdowns will last to take a call on the Q1 performance. Yet he noted that absentism has increased to 30 per cent among migrant labourers at the plant though no reverse migration has been reported yet. This had the capacity utilisation going down 12 per cent for April, Sahni said. The group employs 7,000, workers, of who 4,000 are on contract and the rest 3,000 are permanent employees.

Lumax serves all major OEMs--from two-wheeler to four-wheeler to commercial vehicles to farm equipment. It also supplies to defence establishments and emergency services. Some of its international clients include Renault, Nissan, Audi, Truck-Lite, CNH, and John Deere among others. Both the companies are yet to declare their March quarter earnings.

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