The trench borer is being imported, but no company had so far decided to manufacture the product. The division, which was relatively slow in its launch of the backhoe loader (compared to other manufacturers in the same segment), is now displaying the trench borer in the mining exhibition coming up at Delhi in October. It plans to manufacture the trench borer at a later date.

The product is expected to cost around Rs 12 lakh. Hindustan Motors plans to manufacture about 30 to 40 vehicles in the first year, depending on the response. According to vice president BG Mundhra, the company is in the process of forging a technical collaboration pact with a foreign partner.The trench borer can bore holes up to 40 feet with a diameter of up to 10 inches, facilitating the laying of cables and small pipes without having to dig up roads.

Contributing to the division's growth is the regular order flow from Coal India. Coal India has a budget of $1.1 billion (with World Bank aid) for purchase of equipment for its open cast mining requirements. This has been split into two phases of $550 million each. In the tender floated last year, Hindustan Motors managed to supply 64 dumpers (out of the total requirement of 112) in 10 months, against the 20-month time frame permitted. As a result, the division is hopeful of doing Rs 210-crore worth of business with Coal India alone.

Subsequent to the first Coal India order, the division also increased the manufacturing capacity for its 50-tonne dumpers from four units a day to 10. The second phase of the Coal India tender is expected to open in a couple of months.

The division has also tightened material flow cycles and opted for globalsourcing for components. After studying currency fluctuations (pound appreciation of 20 per cent in the last two years and dollar appreciation of 21 per cent), it was found that the yen depreciated against the rupee by 11 per cent to 12 per cent. The division made a conscientious decision to trade using the yen, giving imports a distinct edge in terms of funds outflow.

Components are now mainly imported from Korea and Japan and the company saved over Rs 1 crore in this short period. Mundhra, however, added that currency fluctuations will be closely monitored and the division will make a switch to other currencies if and when the situation warranted.

The company's earthmoving equipment division saw a 27 per cent increase in its turnover last year (Rs 343 crore) and is hopeful of touching Rs 425 crore this year. For the first quarter sales stood at Rs 75 crore, against Rs 55 crore in the previous quarter.