Established in 1961, Banco Products Ltd is one of the major player of gaskets and radiator segment. Incorporated as an "EMS Logistics radiators, intercoolers, oilcompany" on December 17, Company offers a complete range of (India) Private Limited coolers and all types of engine gaskets. Its companies products are widely used Theautomobiles, oil companycompressors, locomotives, machinery, etc.

The company's OEM customers include TELCO, TVS Suzuki, Ashok Leyland, Mahindra & Mahindra, Maruti Udyog and the Railways. BPIL also enjoys a presence in the replacement market. Its parts out blocks and products areofsold under and brand names, Banco Royal (gaskets) and Banco (radiators). It has a capacity to financial collaboration with 1.4 lac radiators.

The Company signed an agreement with Japan Metal Gaskets Co., Japan to get the know how of Multi Layer Steel Gaskets (MLS) which is considered one of the advanced gasketing technology. For design support Elring Klinger, Germany is providing consultancy for non-retorque Cylinder Head Gasket manufacturing.

Company has four modern manufacturing plants based at Baroda (Vadodara). Last year, company commissioned assembly plant for radiators at Jamshedpur mainly to cater the requirements of TATA motors.

Banco Products is manufacturer of gaskets in UV and fibre steel and copper designs for automotive, agricultural vehicles, diesel commercial vehicles, as well as for automotive vehicles. The company is a radiator manufacturer and radiator exporter in India.

Company posted 92% (Y-o-Y) growth in PAT to Rs 21.10 crores for Q2FY10 as against Rs 11 crore in the corresponding period last year. As a result of Robust operating profits of Rs 29.28 crores, OPM grew by 1150 bps on Y-O-Y basis. Profits of the company increased due to decline in interest cost and rise in other income.

The company's net sales increased by 19 percent to RS 95 crores as against Rs 80 crores in the same period last year. The Management of the company expects 8-10% growth in Topline for FY'10. The company has also recommended a 75 per cent dividend on a face value of Rs 2 per share.

With very low fixed costs in terms of Interest and Depreciation, and decreasing COGS Company's PAT margins have almost doubled from 8% to 15%. In last 5 years.

According to Society of Indian Automobile Manufacturers (SIAM), the overall automobile market grew 14.5% to over 5.78 million units during the first half of this fiscal. The passenger vehicle segment grew over 13% to over 8.84 lakh units, while medium and heavy commercial vehicles continue their downhill drive with a 19% fall during this period. Light trucks and buses though grew 9.5%. The car segment recorded the highest ever sales in a month at 1,29,683 units in September which is 21 per cent higher than the 1,07,517 units sold in the same month last year. The two- wheeler segment grew over 15.5%, with bike sales growing about 15%.

VOLKSWAGEN BEGINS SOURCING COMPONENTS FROM INDIA

Following its cues from other global auto biggies like General Motors, BMW and other Volkswagen AG is also jumping on the global sourcing bandwagon as the German luxury carmaker has decided to source auto components in huge sums within the next couple of years. As reported earlier, that Wolfsburg-based company has already set up its International Purchase office (IPO) in the country and is currently evaluating several component manufacturers in order to identify potential suppliers. But now, media reports suggest that it has already started sourcing components for our global operations - particularly for plants located in Russia and some European countries in a small way Furthermore, VW aims to earmark India as an export market for components to Europe.

India would become one of the major sources of components for our global units, said Jorg Muller, president and managing director of Volkswagen Group India. The company has also set a target to capture 8-10 per cent of market share in the passenger car segment in India by 2014, with a series of launches and by doubling the number of its dealers. Speaking to reporters in Chennai, Muller said VW had started sourcing components from India to its Russian plant. He said they were looking at sourcing light systems, plastic-related items and metals for the European plants. According to auto industry observers, India is an important market for VW and that the German company recognizes the engineering talent available in India. Considering the increasing capabilities of Indian vendors to provide quality spares, it has impelled the company to source parts and services from the country.

The boom in automobile sales expected during the festive season has raised the hopes of component makers. From production cuts, worker lay-offs and plant closures, things are changing for auto-component makers. Companies are busier and a large number of units are even planning for full capacity utilization over the next three months- due to the 30 per cent increase in demand for auto components triggered by the burgeoning sales of cars and motorcycles since June. As the global auto industry crumbled over the last 12-odd months, a large number of auto-component makers saw demand for their products shrink. The Indian auto majors too saw falling volumes, causing problems for auto-ancillary units, which are largely small- and medium-sized enterprises (SMEs). Sales of passenger vehicles in 2008-09 rose by less than 0.13 per cent over 2007-08, while sales of commercial vehicles fell by 21.7 per cent. Only a 2.6 % increase in two-wheeler sales in 2008-09 led to an increase in total vehicle sales of 0.7 per cent that year. Although the commercial vehicles segment is yet to see a revival (it registered a negative growth of 2.19 per cent during April-August 2009, over the year-ago period), passenger vehicles are selling briskly (the segment grew by 11.97 per cent during April-August 2009, over the year-ago period), leading to an improved situation for auto-parts makers.

Auto component industry:

The Indian auto component industry is one of India's sunrise industries with tremendous growth prospects. From a low-key supplier providing components to the domestic market alone, the industry has emerged as one of the key auto components centers in Asia and is today seen as a significant player in the global automotive supply chain. India is now a supplier of a range of high-value and critical automobile components to global auto makers such as General Motors, Toyota, Ford and Volkswagen amongst others. As per an Automotive Component Manufacturers Association of India (ACMA) report, the turnover of the auto component industry was estimated at over US$ 18 billion in 2007-08, an increase of 27.2 per cent since 2002. It is likely to touch US$ 40 billion by 2015-16. Aided by a 7 per cent growth in the OEM segment and an 8.5 per cent rise in exports and after-market segment, it is expected that auto ancillary production would grow by 8.2 per cent in 2009-10, according to a report by the Centre for Monitoring Indian Economy (CMIE).

Investments in the auto component industry were estimated at US$ 7.2 billion in 2007-08 and are likely to touch US$ 20.9 billion by 2015-16. Exports of auto components grew at the rate of 35 per cent during 2002-07 and touched US$ 3.6 billion in 2007-08. It is estimated to reach around US$ 20 billion-US$ 22 billion by 2015-16. India enjoys a cost advantage with respect to casting and forging as manufacturing costs in India are 25 to 30 per cent lower than their western counterparts. Seeing the growing popularity of India in the automotive component sector, the Investment Commission has set a target of attracting foreign investment worth US$ 5 billion for the next seven years to increase India's share in the global auto components market from the existing 0.9 per cent to 2.5 per cent by
2015.