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undertakes full-service product design and development projects including concept design, simulation, tool design, and prototyping, including development of robust manufacturing solution.
Rico is headquartered in Gurgaon. All its
manufacturing facilities are ISO-14001 and OHSAS- 18001 certified. As part of its capacity expansion plans, the company is in the process of setting up manufacturing facilities in Bangalore (Karnataka) and Manesar (Haryana), for which land has already been acquired.While the Manesar facility would manufacture aluminium die-casting and machining, the Bangalore facility would be used for machining and assembly, aluminium casting and ferrous casting.
Given its strong products and services range, the company is in a position to supply to prestigious automotive OEM like Hero Honda, Honda Motorcycle and Scooters India, Maruti and Tata Cummins in the domestic market.To establish a global footprint the company has chosen the route of exports. Globally it is a supplier-of-choice to companies like Ford, General Motors, Jaguar, Land Rover,Volvo, Cummins, Caterpillar, Detroit Diesel and Honeywell.
The promoters hold the majority stake in the company at 44.67 per cent. Public holding in the Rico Auto is one of the largest full service suppliers
of auto components and assembly.
Background
Rico Auto Industries, is amongst the large auto components companies in India and leading supplier to Indian and global automotive OEM.
It commenced operations in 1983 at Dharuhera (Haryana) with activities in aluminium high-pressure die-casting and machined components and
assemblies. In 1992 it added ferrous casting and machining capabilities at its Gurgaon (Haryana) facilities by adding a high speed moulding line.
In 1996 the company entered into a 50:50 joint venture with FCC Co Ltd (Japan) to manufacture clutch and fly wheel assemblies for two wheelers and passenger cars at its plants in Manesar (Haryana).
In 2001 the company also entered in the field of IT- enabled services with the formation of its wholly owned subsidiary, Rico Softech, which was subsequently amalgamated with the parent
company in 2004. Consequent to the merger, Rico now offers engineering services to customers by focusing on CAD (computer aided designing), CAM (computer aided manufacturing), CAE (computer aided engineering) and tool and product design. It
RICO AUTO INDUSTRIES LIMITED
Company Products Established Founder Distribution Production plants
Rico Auto Aluminium & 1983 Arvind Kapur, US, Europe, India
Industries ferrous foundry, Arun Kapur Japan, India
Dies & moulds
121 CAGR of 28.8 per cent.The growth in net profit
was even higher at 33.9 per cent, with net profit having grown from USD 1.4 million in 1999 to USD 8.1 million in 2005.This growth has been driven largely by the substantial growth in the domestic two-wheeler and passenger car segment as well as the outsourcing potential realised by the global OEM from the most cost competitive countries, one of these being India. Rico’s exports have been focused towards leading global OEM in Europe and North America, who have selected the company as a single source supplier for critical high value added engine and transmission components and
assemblies.The company’s return on net worth and return on capital employed remain healthy at 36.3 per cent and 18.9 per cent respectively.
Rico’s contribution in making
‘Made in India’ global
Rico’s global presence has been established mostly through exports, which began in the year 1994. It is today, a tier-1 supplier to auto OEM in the
international market. Its global customers include reputed brands across developed markets. In the US, it supplies to Ford, General Motors, Cummins, Caterpillar and Detroit Diesel. In Europe, its clients include Ford, Land Rover, Jaguar, General Motors, Cummins, Caterpillar,Volvo, Perkins and Honeywell.
In Japan supplies are made to Cummins, Nissan, Honeywell and Matsusaka Engineering Company.
The company is in the advanced stages of launching new products for other automobile OEM both in Europe and North America.
Alliances and joint ventures have been leveraged to grow in the global markets. Rico entered into a technical collaboration with FCC, Japan in 1985 and later in 1996, it converted this technical
collaboration into a 50:50 joint venture for supplying clutch assemblies for two-wheelers and automobiles and flywheels for automobiles. FCC is the OEM supplier to Honda,Yamaha and Suzuki in company is 22.09 per cent whereas foreign
institutions hold 16.6 per cent.The rest of the stake is held by domestic institutions, non-resident Indians, non-promoter corporate bodies and others.
Products
Rico manufactures auto components predominantly in the engine, transmission and braking and
suspension categories.
Engine: Products include oil pump assembly, fuel system parts, lube oil filter heads, exhaust system parts, turbo charger parts, crank cases and covers, cylinder head cover, cam cover, intake manifold cover, front & rear cover, valve cover, balance shaft assembly, thermostat housing, main bearing caps, water & air connections, flywheel assembly, EGR plate, rocker arm and engine brackets.There are two important parts under development which are cylinder block and cylinder head
Transmission: Products include clutch assembly, transmission supports, differential case and housings
Braking and suspension: Products include wheel hub assembly, brake panel assembly, brake disc, drums & rotors, knuckles and FEAD brackets.
The company has positioned itself as a full service supplier to its customers by providing integrated solutions involving design, development, tooling, casting, machining and assembly across its ferrous and aluminium products.
Financial analysis
Rico has witnessed an impressive growth in its revenues and profits in the last few years. Gross sales increased from only USD 34.6 million in 1999 to USD 157.4 million in 2005, thus exhibiting a
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Factors fuelling Rico’s global initiatives
Globally, sourcing of automotive components from low cost countries is accelerating, especially in areas of machined components and assemblies.The opportunities for global growth in Rico’s core area of business are immense. Cost competitiveness as well as its engineering and investment capabilities are increasingly meeting the global sourcing needs of automotive OEM and tier-1 suppliers. Rico’s competitive strengths as an integrated full service supplier and capabilities to understand customer requirement and meeting tight deliveries schedule have resulted in creating confidence among global players.
Leading European and North American OEM have selected Rico as a single source supplier for critical engine and transmission components and
assemblies. Moreover Rico is working with its customers right from the concept stage, with its involvement in co-design and development work increasing significantly.
Rico has also focused on setting up systems to comply with international quality standards, thus remaining at the forefront in attaining international quality certifications like ISO TS 16949, ISO 14001 and OHSAS 18001.To become a world class manufacturing company and upgrade the skills and abilities of its people, it is implementing Total Productive Maintenance (TPM), Six Sigma and SAP across the Company.
Future plans
Rico plans to be a USD 1 billion enterprise by 2011, mainly by expanding its global presence, which would be done by introducing new products.The licensing and technological assistance agreement with Teksid Aluminium for aluminium engine blocks and heads is a step in this direction.The company also plans capacity expansion at its plants.
Japan and is the world leader in this category of auto components.
In 2006, the company entered into an agreement with Pierburg for technology assistance to produce water pumps and oil pumps particularly for Maruti for their new diesel engine project with GM-FIAT.
Pierburg is a world leader in water, oil and vacuum pumps and emission control systems. Further, in the same year, the company has entered into a licensing and technological assistance agreement with Teksid Aluminium of Italy, in order to add higher `value-add' components to its product portfolio such as aluminium engine blocks and heads.With most producers relying on imports, this opens up a huge market for these components in India.
In 2003, Rico became a part of Ford’s Global Supplier Development Programme, wherein Ford began to develop Rico as a key supplier of
aluminium and ferrous components and assemblies.
Rico has acquired wide ranging experience and better understanding of Ford's processes and successfully launched a number of new products for Ford and their associate brands.Though the agreement was discontinued in 2005, Rico continues to work with Ford world-wide on its current and new programmes.
To oversee its overseas interests and promote exports in the international markets, Rico has two subsidiaries in the US and UK.The subsidiary in the US has assembly operations that focus on providing logistics, local customer and engineering support services to its customers.The company is planning to expand its product offering for the customers by entering into new processes like gravity and low pressure and horizontal sand moulding. It is also focused towards enhancing its engineering capabilities and acquiring technologies to target additional high-end components with customers across the board.
123 Rico is also looking at setting up base in low cost
countries through either greenfield operations or strategic alliances and acquisitions as part of its growth plan.
Globalisation at a glance
• Global presence established through direct exports to leading OEM and tier-1 suppliers globally
• Supplier-of-choice to leading names like Ford, General Motors, Cummins,Volvo, Caterpillar, Detroit Diesel etc
• Subsidiaries in the US and UK to oversee international operations
• Assembly operations in the US
• Growth mainly through alliances and joint ventures with global companies like FCC Co. Japan, Pierburg, Germany and Teksid Aluminium, Italy
www.ricoauto.com
