PUNE, May 26: Kalyani Brakes Ltd (KBX) is set to enter into a buy back arrangement with one of its promoters the Japanese NABCO Ltd. The prototype samples will be despatched before June 15. Should the components meet NABCO's norms during a 10-month testing cycle, KBX will begin production at a dedicated line at its Chakan plant by September 1998, company managing director Satish Sekhri said.

KBX, which is co-promoted by the Pune-based Kalyani group, Robert Bosch GmBH of Germany and NABCO of Japan is exploring a similar buy back arrangement with Bosch. All the companies hold 26.66 per cent stake each. With international majors as partners, there was no need for KBX to directly export its products, he said.

KBX recorded sales of Rs 120.39 crore during 1996-97 and a profit before tax of Rs 7.1 crore. However, due to a Rs 8.7 crore `extraordinary item', the company has recorded a loss of Rs 1.61 crore.

Sekhri was confident that the company's accumulated losses, now at Rs 5 crore, will be wiped out during the first half of the current year and KBX would be able to post a turnover of Rs 152 crore in 1997-98; PBT of Rs 9.2 crore and a PAT of Rs 8.3 crore. The company will then come within the ambit of MAT.

Explaining the `extraordinary item', Sekhri said that this had been done at the instance of the German partner, Bosch, and was part of the conservative accounting practices KBX has adopted from the German company. The figure represented the sales tax valuation for the past six years, which it is technically allowed to do for another four years, for its plant at Jalgaon (notified as a backward area) under a SICOM scheme.

Commercial production at KBX new plant at Chakan will begin by September, 1997, he added. The plant, which will cater to the passenger car and the LCV segment, has an installed capacity to manufacture 30,000 sets of brakes per month. It will be commissioned in June with trial production scheduled for July and August.

This plant will provide brakes to all the new car manufacturers: Ford, Peugeot, Daewoo and Telco's new car, which is expected to go into commercial production by mid-1998. KBX is in an advanced stage of negotiations to its products to Mitsubishi for the Lancer, and for the Ford Fiesta.

It is already a supplier to Maruti, Mahindra and Mahindra, Hindustan Motors, Bajaj Tempo and Greaves, from its Jalgaon facility.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.