Chennai: US-based Timken Company's wholly owned subsidiary Timken India Manufacturing Private Limited plant was inaugurated on Wednesday in Mahindra World City Special Economic Zone (SEZ) near Chennai.

The $25 million plant's initial capacity will be 310,000 units and will be increased to 420,000 units per year by April 2009, said Sanjay Sinha, general manager.

The plant will make 8-12 inch taper roller bearings. The bulk of the Chennai plant's output will be shipped out to meet the needs of Timken's global customers making highway vehicles/earth moving equipments and oilrigs.

According to Sinha, the new plant will initially employ 120 people and later scale it up to 200.As per target, the company will earn $50 million during the first year's operation.

"The whole year's production has already been sold out," added Sinha. For the American company, the new plant is its second production base in India.

The first one is in Jamshedpur owned by the Rs.3.48 billion revenue earning Timken India Limited, a listed company in which Timken owns 80.02 percent and the public 19.98 percent of the stakes.

To meet the increased demand for heavy-duty anti-friction bearings, The Timken Company is increasing its production base in the Asian region, said a top company official.

"Global demand for industrial products is at historic levels. We would like to take advantage of the booming Asian economies. Besides the new plant near Chennai, we will be opening another plant in China in two days," James W. Griffith, president and chief executive officer, told the media here Wednesday.

In China, Timken will be opening its fifth facility partnering with a local company. The plant has been set up with an outlay of $39 million to make bearings for windmills. According to Griffith, the manufacturing cost in the two large Asian countries is more or less similar.

Replying to the query as to the reason for forming a separate company owned by the American company at a time when there exists the listed entity Timken India, Managing Director Gordon W. Robinson said: "The plant is located inside a SEZ and hence we found the need to form a new company owned by Timken".

He said apart from exporting bearings from India, the company as a group looks at India as a component-sourcing base. "The target for this year is to source $40 million worth of components like turn rings, housings, seals and others from India for our global production," said Robinson.

The American company also has a 440 people strong technology centre in Bangalore.

"At a time when other US companies outsource work we actually in-sourced. Nearly 130 people at our technology centre are involved in payroll processing for Timken. Another 120 employees take care of our information technology (IT) systems. The balance work force is highly skilled engaged in engineering design for us or for our clients," Robinson added.

Source : IANS